EU: Mandy stamps his feet over gambling
E.U. Trade Commissioner Peter Mandelson's fortunes are likely to be in freefall unless his best pal Tony Blair succeeds in his current endeavours to garner support to be appointed President of Europe - something he thought had been lost to him. Now, Mandelson is trying to curry favour with Gordon Brown who has never been a Mandelson fan and is unlikely to re-appoint Mandelson - but does think that gambling can be the saviour of the British economy.
The battleground that Mandelson has chosen is primarily in relation to internet gambling. The background is simple: the UK Treasury identified Casinos and internet gambling as a potential money spinner. Several internet gambling companies were set up in the UK or were offshoots of UK companies.
However, some countries have very strict rules on gambling. For example, it is illegal to provide gambling services, including mechanisms for paying for gambling, to anyone in Hong Kong except where gambling is managed by The Hong Kong Jockey Club.
In the USA, there are state that outlaw gambling, and others that prohibit the offering of gambling services to their residents from out of state. And there are federal laws that prohibit the use of several means of communication, including telephone and therefore, arguably, the internet, for transmitting gambling data and / or payments.
Strangely, in both the USA and Hong Kong, the rules were not, generally, brought in for moralistic purposes. They were applied to prevent criminals taking over the gambling industry and - in the case of the wire prohibitions in the USA - to prevent bets being placed on the West Coast in relation to sporting events that had already finished on the East Coast - but criminals had faster communications networks so they got the results ahead of the bookmakers.
Mandelson sees the USA's attack on internet gambling run out of the EU as an attack on EU companies. "The U.S. has the right to address legitimate public policy concerns relating to Internet gambling, but discrimination against E.U. companies cannot be part of the policy mix," said Mandelson announcing an EU initiative to undermine US attempts to block EU companies from taking bets from the US.
It is true that the USA has taken very hostile action against EU based companies, including arresting directors when they arrived in the US and even seeking extradition. That does appear excessive. But importantly, as a trade issue, the USA also almost entirely outlaws internet gambling originating within its own borders.
Therefore Mandelson's tantrum is actually seeking the right for EU companies to sell services into the USA which USA companies themselves are not permitted to offer.
If that's not right, we would be fascinated to hear why so.
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