EU probes U.S. online gambling crackdown

BRUSSELS (Reuters) - The European Union launched an investigation on Monday into whether U.S. prosecutions of foreign online gambling companies were discriminatory, possibly paving the way for action at the World Trade Organization.

European online gambling companies, such as PartyGaming (PRTY.L) and BWIN Interactive Entertainment (BWIN.VI), complained in December that the U.S. Justice Department singled out foreign online gambling companies.

"The U.S. has the right to address legitimate public policy concerns relating to Internet gambling, but discrimination against EU companies cannot be part of the policy mix," EU Trade Commissioner Peter Mandelson said in a statement.

The commission said it would look into the complaints over the next five to seven months and could decide to launch WTO proceedings against the United States.

The United States came into dispute with the EU and other countries after it withdrew its WTO commitments to opening up its gambling markets to foreign companies and then introduced measures in 2006 to cut off that access.

The measures wiped billions of euros off the stock market value of the European sector.

The European Commission agreed in December to a U.S. offer of openings in other sectors as compensation for the measures.

But the U.S. Department of Justice is still investigating activities of EU companies before the measures were introduced.

A U.S. Justice Department spokesman said they had no immediate comment on the EU's decision to investigate whether to file a complaint at the WTO.