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The European Commission said today that U.S. laws restricting online gambling violate World Trade Organization (WTO) rules.

The commission said WTO proceedings against the U.S. would be justified but that the EU would first seek a way to find a negotiated solution on the issue.

Catherine Ashton

"It is for the US to decide how best to regulate Internet gambling in its market, but this must be done in a way that fully respects WTO obligations," said Catherine Ashton, EU Trade Commissioner.

"I am hopeful that we can find a swift, negotiated solution to this issue."

The European Commission launched an investigation into U.S. online gambling laws after receiving a complaint from the Remote Gambling Association. The investigation found that U.S. laws deny access and discriminate against foreign suppliers of gambling and betting services that go against U.S. WTO obligations.

European companies are still subject to legal proceedings by U.S. authorities based on their past activities in the U.S. online gambling market. The proceedings are continuing despite the withdrawal of European companies from the U.S. market in 2006 following changes in the U.S. regulatory framework.

The investigation pointed out U.S. companies are allowed to freely operate online gambling on horse racing in the U.S., while European companies cannot and face legal action.