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WTO rules U.S. gambling ban violates international trade laws,

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  • WTO rules U.S. gambling ban violates international trade laws,

    By MATT RICHTEL
    THE NEW YORK TIMES

    The World Trade Organization, in its first decision on an Internet-related dispute, has ignited a political, cultural and legal tinderbox by ruling that the U.S. policy prohibiting online gambling violates its obligations under international trade law.

    The ruling by a WTO panel Wednesday is being hailed by online casinos operators overseas as a major victory that could force the United States to liberalize its laws.

    But the Bush administration vowed to appeal the decision, and several members of Congress said they would rather have an international trade war or withdraw from future rounds of the World Trade Organization than have American social policy dictated from abroad.

    "It's appalling," said Rep. Bob Goodlatte, R-Va. "It cannot be allowed to stand that another nation can impose its values on the U.S. and make it a trade issue."

    The decision stems from a case taken to the WTO in June by the island nation of Antigua and Barbuda, which licenses 19 companies that offer sports betting and casino games such as blackjack over the Internet.

    Antigua and Barbuda argued that U.S. trade policy does not prohibit cross-border gambling operations and that the United States would be hypocritical to do otherwise because it wants to allow American casino operations to operate land-based and Internet-based subsidiaries overseas.

    It is not clear precisely why the WTO ruled in favor of Antigua and Barbuda, because the specifics remain confidential. The ruling covers only online casinos based on the islands, but other nations could seek similar rulings.

    Ronald Sanders, the islands' chief foreign affairs representative, said he believes the United States must liberalize its online gambling regulations or risk being hypocritical about its stance on free trade. "The U.S. says it wants open competition," he said. "But it only wants free trade when it suits the U.S."

    Millions of Americans gamble over the Internet, using credit cards or online payment services to wager on sports or at games such as poker and blackjack.

    Federal law makes it illegal to offer sports bets over the Internet or to operate other gambling operations not otherwise allowed by individual states. State laws vary widely, with some allowing specific forms of gambling within their borders. Some states criminalize the placing of a bet, but others do not make it a crime to place a bet on the Internet. Online casinos are typically based in Costa Rica or the Caribbean, but also in Britain.

    The Justice Department has begun to crack down on American broadcasters and publishers that advertise on behalf of Internet casinos. The crackdown, based on an untested legal theory that American companies are aiding and abetting an illegal enterprise, has limited the ability of online casinos to reach Americans.

    Sebastian Sinclair, a research analyst who studies the Internet-gambling industry, said he doubted the WTO decision would affect the United States' internal policies. At the same time, he said the decision shows the gulf in policy on the issue between the United States and much of the world.

    "We're going down one path, and the rest of the world is going down a completely different path," said Sinclair, of Christiansen Capital Advisors.

    David Carruthers, chief executive of Betonsports.com, an Internet sports-book operation with headquarters in Costa Rica, said he hoped the WTO decision would lead to legalized online gambling in the United States.

    In 2003, he said, his company took 33 million bets from people in North America, most of them in the United States. He said he had 1.2 million registered customers who are U.S. residents.

    "This could be the straw that breaks the camel's back," he said. "It's a victory for the people of Antigua, but also for consumers in the United States."

    http://seattlepi.nwsource.com/busine...gambing26.html
    As Always - Good Luck,

    Sonny
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