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U.S. Gaming Prohibition Violates WTO Agreements

WTO Has Ruled Against the US in Past Cases Concerning Online Gambling


The United Kingdom is one of more than 60 nations in the world that passed laws to allow, tax, and regulate online gaming, including poker, on its soil. It's the first truly industrialized nation to do so, as well as the richest. And as a member of the World Trade Organization, with millions of dollars at stake, it will soon have to decide if it will try to take on the strongest nation in the world.

The WTO has already ruled against the US for attempting to ban online gambling, and now that anti-online gambling legislation has made it through Congress, more WTO complaints will probably be filed. The U.K might find itself in that line. Read about the way it was sneaked through here, and what it means to online players here.

The WTO was set up to protect fair and free trade among its members, and it has ruled that it considers online gambling to be a product that should be freely traded. It's hard to believe that the US won't face more lawsuits now that it has taken a stricter approach at curbing online gambling.

A precedent has even already been established.

Tiny Waves

In 1994, Antigua and Barbuda was one of the first nations of the world to embrace online gambling, and since then the little island nation has become a hub of online businesses who have embraced regulation. Antigua and Barbuda joined the World Trade Organization as a charter member in 1995.

So far, 30 companies are licensed by Antigua and Barbuda's Division of Gaming. The Division of Gaming constantly monitors its licensees and suspends licenses whenever it finds infractions. The rules that the Division of Gaming follows have roots in New Jersey. Frank Catania of Catania Consulting Group, Inc. wrote most of the regulations. He's a former director of gaming enforcement in New Jersey.

Antigua and Barbuda's book operators have historically faced prosecution from the US government. Three founding members of World Sports Exchange were indicted for violating the Wire Act a few years ago. The Wire Act is a law enacted four decades ago that was written to stop bookies from making and taking bets across state lines. The government still claims the Wire Act applies to online gambling sites. One of the members tried to fight the charges, but was found guilty and spent several months in prison. The other two members haven't been back to the US since.

The arrests and the United States' attempts at curbing online gambling prompted Antigua and Barbuda to file a complaint with the World Trade Organization in 2003. Antigua claimed that the US systematically violated the WTO's General Agreement of Trade in Services (GATS) by trying to stop its residents from using services offered by companies located in Antigua.

It took a year, but the WTO ruled in Antigua's favor and struck down the US's appeals in 2005, writing that US had adopted "measures" that interfered with its obligation to provide free trade in betting and gambling services with Antigua and Barbuda.

Part of the US's reasoning that claimed it was in the right to stop online gambling was that it believes that online gambling is morally wrong. The appellate body ruled that the US could not make that claim since it allows gambling on its shores.

To date, the United States has essentially ignored the ruling. The US Trade Office has said that it would not ask Congress to weaken the gambling provisions that has been in place since the Wire Act became law in the late '60s, and has given Antigua and Barbuda the silent treatment with this issue ever since.

There's no doubt that the size and economic power of Antigua made it easier for the US to ignore the WTO's ruling. The future is hard to predict, but with so many dollars at stake, surely one nation will step up to the US and try to again swing away at this issue. It just may be one of the strongest nations in the world and one of our closest allies.

Tags: poker law


over 15 years ago

How about helping us in Washington State, where online poker is spelled out in the law that went into effect 06,06,2006 which makes online poker a class C felony. We need help to reverse this law which is far more strict and makes playing poker more risky due to loss of cival rights if proscuted. Also the head of the Washington State Gaming commusion stated they will prosucte online poker players. To ignore us is inviting other states to write simular laws which would be much worse then the new federal law.