It seems the European Union is on the side on liberal gambling laws after it warned Germany to overturn its imminent Internet gambling ban or else face severe legal action.
Germany hosts a state run betting monopoly which the European Commission says is illegal according to its laws.

The new law passed in Germany banning Internet gambling sites is being challenged by United Kingdom and Austria two countries in the EU that are legalizing online betting sites.

According to Reuters, EU Industry Commissioner Guenter Verheugen wrote to German regional state governments on Friday giving them a month to change a draft treaty on the issue.

"We asked Germany to reconsider the total ban on lottery and sports betting on the Internet. We think a proposed total ban is disproportionate and there are less restrictive measures, such as mandatory prior registration and strict guarantees on identification," a European Union Commission official said on Friday about the situation.

The German law that was passed earlier in the year banning Internet gambling is almost identical in meaning to the US law that was passed in October of last year in that they ban Internet gambling yet carve out exceptions for forms of gambling in their own country.
Beyond the EU rulings, the WTO has sent a letter to the US reminding them that they have until April to respond to their ruling in the Antigua and Barbuda vs. the United States case.

The hard line stance adopted by the EU comes just weeks after the Commissioner for internal markets and services Charlie McCreevy said that action might be taken against the USA in the future as their online ban denies British and other European companies the opportunity to participate in the American gambling market.