World Trade Organization Ruling

In late March 2004, Jay Cohen was released from federal prison after serving an 18-month sentence. In March 1998, Cohen was charged with violating the 1961 U.S. Wire Act; he was convicted in New York federal court in February 2000. Cohen's case was probably the first one in which a U.S. citizen was convicted of accepting sports bets outside the jurisdiction of the United States.

Cohen's lawyers argued that he did not break the law because his business was based in Antigua, where sports betting is legal. They also argued, to no avail, that New York , where many of the customers lived, allows many kinds of wagering.

Jay Cohen, founder of World Sports Exchange in Antigua, left the minimum-security Nellis Federal Prison Camp in Las Vegas maintaining that he ran a legal business in another country.

Cohen said he believes he will be vindicated when the World Trade Organization (WTO) issues a decision in a case brought by Antigua against the United States over the offshore betting issue. Cohen believes that if the organization rules in favor of Antigua, "it will open cross-border gambling and the United States will no longer be able to harass offshore operators."

Interestingly enough, days after Cohen's release, Antigua won the WTO ruling to which Cohen was referring. The WTO found that U.S. legislation criminalizing online betting violates WTO commercial services accords. An interim report from a WTO panel in Geneva found that Internet gambling is covered under the services agreement of global trade agreements, the officials said. The complete ruling is expected to be made public next month and the United States may appeal the decision.

Antigua, which has a population of 68,000, filed a complaint with the WTO about a year ago concerning the United States' position of effectively banning Internet gambling.

The U.S. position has slashed revenue in Antigua, which developed online gambling to boost an economy whose main income, tourism, suffered after a series of hurricanes.

The Wall Street Journal recently reported the decision, noting that it could have wide-ranging implications for offshore Web gambling. Since the opinion does not have the same force and effect of a judicial ruling to which U.S. citizens are bound, we will all await the significance of the ruling, which at the very least is positive for those interested in online gambling.

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