With the Unlawful Internet Gambling Enforcement Act (UIGEA) under attack in the U.S. Senate by Roberto Menendez and in the House of Representatives by Barney Frank, as well as by the World Trade Organization and lawsuits from online gaming lobbies, it seems that the UIGEA’s days are numbered. Don’t be so sure that there will be a nationwide online gambling market, though.

Jim Tabilio, a gambling lobbyist who has been meeting Washington leaders, predicts that many of the larger states could opt out of the market. Both Frank’s and Menendez’s bills have an option for individual states to opt out of the federally regulated online gambling if the UIGEA’s ban is overturned. They have only 90 days to opt out. Tablio believes that larger states, such as Texas and California, because they have such bloated bureaucracies, will not have enough time to reach a decision within the 90-day time limit. With no decision made, the governors would likely choose to opt out. Not being a part of the federal bill then, the states would have the option of pursuing intrastate gambling bills of their own, such as the one proposed by California, where the states would get more of the profits, not having to hand it over to the federal government.

Though Tabilio and other gambling lobbyists see that as a problem, making the legal situation of online gambling in America more confusing and complex, as far as I’m concerned, any time individual states give the finger to the federal government, it’s a good thing. That’s why I love Texas so much, considering they have a clause in their state constitution stating that they joined the Union by choice and can leave anytime they want. In light of the current out of control power-grabbing by the federal government, Texas Governor Rick Perry even had a speech in which he reminded the rest of the country of their right to secede. Here’s the translation. Perry: F.U. Federal Government.

Whether or not certain states opt out of the gambling bills, it seems an almost certainly that there will be some form of legal online gambling market in the United States soon, maybe even within the year. It is a cause for optimism in the gambling community, but I’m going to end this article with an even happier sentence. F.U. Federal Government.

Joke: The United States government is so bloated and regulation happy.  Audience Response: How bloated and regulation happy is it?  Punchline:It’s so regulation happy that Europeans are saying that the United States government is bloated and regulation happy. So much so that the European Union is threatening to file a case with the World Trade Organization over the US government’s ban on online gambling.

The European Commission released the “Trade Barrier Regulation Report”, detailing the negative effects the US online gambling ban has had on European gambling firms. The EU’s announcement of intentions to bring a case to the WTO (which could result in billions of dollars in compensation to the EU) immediately prompted a face to face. EU Trade Commissioner Catherine Ashton met with US Trade Representative Ron Kirk met to discuss various trade issues, among them, the US stance on online gambling. “Today was not a day to resolve any problems, but rather to set out the approach we are going to take, who would do what, and to agree to keep in touch,” said Ashton

Both the US and EU are planning further talks in September, each aiming for a “creative solution.” The US is eager to avoid further WTO disputes as a previous hearing resulted in a $21 million payment to Antigua. One issue that will likely have a profound on discussions is Congressman Barney Frank’s legislation aimed at undoing the UIGEA bill.

Since a potential multi-billion dollar judgement is composed of our hard-earned tax dollars, perhaps the federal government should worry less about protecting Americans from gambling problems they might develop and worry more about the over-regulation problem that it actually has?  Just a thought.

On Monday, officials from the United States and European Union met to discuss online gambling, among other issues. According to the European Union, the US passing the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006 was a violation of trade agreements between the US and the EU. The EU conducted an investigation into the matter that resulted in sending a letter to the US earlier this year. The United States has been avoiding the issue for a while, but as officials from both bodies met on Monday to discuss the matter, it seems that both sides want to resolve the conflict.

EU Trade Commissioner Catherine Ashton stated that Monday was a day to “set out the approach we are going to take, who would do that, and agree to keep in touch.” Both sides are looking for a solution that does not hurt them or hinder foreign relations. The US and EU met to discuss four areas of their trade agreement, with online gambling being one of the four. Ashton and US Trade Representative Ron Kirk will attempt to resolve the disagreements in the coming months. If they cannot come to a compromise, the issue will then be taken to the World Trade Organization (WTO), of which the US and EU are members.

The EU doesn’t want to miss out on the money, $14 billion in 2007, generated by online gambling. With many online gambling sites in foreign countries attracting customers in America, legislation passed by the US to ban “unlawful” online gambling affects foreign markets. Back in 1994, when the United States signed the General Agreement on Trade in Services (GATS), they failed to put gambling on the list of exemptions from the free trade provisions. Though the EU has no authority over US law, the WTO has authority over international trade agreements between the two bodies. The US may have to either amend the law or provide monetary compensation to the EU. There was a similar dispute in 2003, when Antigua challenged that UIGEA violated their trade agreement with the United States. The WTO ruled in favor of Antigua.

Regardless of how it turns out, it seems that the days are numbered for UIGEA, which is also under attack in a lawsuit filed by the Interactive Media Entertainment & Gaming Association (iMEGA) and in legislation introduced by Representative Barney Frank.