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The European Commission has released a report that finds U.S. laws on Internet gambling are not legally justified and discriminate against foreign Internet gambling operators.

"The European Commission report provides yet another reason why the administration and Congress should support pending legislation to regulate Internet gambling, which would resolve the trade agreement violation and better protect consumers," said Jeffrey Sandman, spokesperson for the Safe and Secure Internet Gambling Initiative.

Jeffrey Sandman

"The Obama Administration should seek to forge a new direction on Internet gambling, rather than keeping in place a protectionist trade policy that hypocritically discriminates against foreign online gambling operators."

Legislation recently introduced by Rep. Barney Frank (D-MA), the Internet Gambling Regulation, Consumer Protection and Enforcement Act, would resolve the trade dispute with the EU by regulating Internet gambling.

The report found that the U.S. is in violation of international trade law by pursuing criminal prosecutions, forfeitures and other enforcement actions against foreign Internet gambling operators, while allowing U.S. online gambling operators, mainly horse betting, to prosper.

The report also suggests a resolution to the trade dispute could be reached through negotiations with the Obama Administration. If the dispute is not resolved, the EU could bring a case against the U.S. to the World Trade Organization.

A tax revenue analysis finds regulated Internet gambling would allow the U.S. to collect revenue in an amount ranging from $48.6 billion to $62.7 billion over the next decade.