Gambling companies urge EU probe U.S. prosecutions

WASHINGTON (Reuters) - European online gambling companies on Thursday accused the U.S. Justice Department of violating World Trade Organization rules by singling out foreign online gambling companies for prosecution.

"We have been left with no choice but to pursue all legal avenues available to challenge the U.S. Department of Justice for its discriminatory enforcement activities against European online gaming operators," Clive Hawkswood, chief executive of the Remote Gambling Association (RGA), said in a statement.

The companies are unhappy with a deal the European Union struck this week with the United States on Internet gambling.

The EU agreed to let Washington withdraw a 13-year-old commitment to allow foreign firms to offer gambling services in exchange for U.S. trade concessions in other areas.

Washington said it never intended to allow foreign companies to offer online gambling and made a mistake by not explicitly saying so as part of the 1994 world trade deal.

The deal followed U.S. legislation last year that made it illegal for credit card companies to accept charges for online gambling, effectively closing the market to foreign companies.

Justice Department and EU officials were not immediately available for comment.

Many are based in Europe, such as 888 Holdings Plc, PartyGaming Plc and Sportingbet Plc.

"Stock market-listed EU companies collectively lost billions in market value overnight when the (law) took effect, whilst U.S. online companies and unlisted U.S.-facing companies continued to operate unperturbed," the RGA said.

As part of a U.S. crackdown on Internet gambling, two founders of payments processor NETeller Plc were arrested in January. In May, BETonSPORTS pleaded guilty to U.S. racketeering charges and agreed to cooperate in a case against the company's founder and other co-defendants.

"The DOJ (Department of Justice) has repeatedly stated that all forms of online gambling are illegal, yet it continues to enforce this view only in connection with non-US businesses," the Internet gambling group said.

"As a result, the RGA has asked the EU to investigate the discriminatory enforcement regime as an illegal barrier to trade for EU businesses," the group said.

On Wednesday, the Justice Department said Microsoft Corp, Google Inc and Yahoo Inc agreed to a settlement worth $31.5 million to resolve accusations they received money from online gambling businesses to advertise illegal betting from 1997 through 2007.

(Editing by Jeffrey Benkoe)