WTO ruling on Net-gambling ban

[Scott]

 The U.S. government's attempts to outlaw Internet gambling on Web sites based
offshore violate international trade rules, the World Trade Organization said
Thursday.

A WTO appeals board sided with the small island nations of Antigua and Barbuda,
home to gambling Web sites that provide local jobs, and upheld an earlier
decision by the WTO.

"This is a country-specific ruling," Mark Mendel, an attorney for Antigua, said
in a statement. "But it may have far-reaching implications."

Depending on what happens next, search engines may begin to accept ads for
offshore casinos, and Visa and Mastercard could be permitted to process
international gaming-related transactions.

The ruling could lead to trade sanctions being imposed on the United States, if
Congress does not change decades-old laws designed to regulate gambling through
interstate telephone wires.

http://news.com.com/WTO+slams+U.S.+Net-gambling+ban/2100-1030_3-5658636.html?tag
=nefd.top

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[THIS]@gambling-law-us.com Chuck Humphrey]

On Thu, 07 Apr 05 17:03:49 GMT, Scott <sc...@scottadams.com> wrote:

> The U.S. government's attempts to outlaw Internet gambling on Web sites based
>offshore violate international trade rules, the World Trade Organization said
>Thursday.

My initial take on the situation, based on reading the appellate
panel's conclusions, is that the U.S. scored an effective win.

The bad thing the U.S. has done according to what appears to be the
only really substantive finding is to allow Internet horserace betting
where the bets are legal in the States at both ends of transaction.
The U.S. could repeal that law. A description of that law and the
controversy surrounding its original enactment over the opposition of
the Justice Department is at
http://www.gambling-law-us.com/Federal-Laws/Horse-Racing-Act.htm.
Alternatively, Congress could amend that law to expand the present
limitation that only allows U.S. States (and Puerto Rico) can accept
bets and add foreign operators.

The final report contained two reversals of the original panel's
decision as to state laws: First, the final report "finds that the
Panel erred in examining whether eight state laws, namely, those of
Colorado, Louisiana, Massachusetts, Minnesota, New Jersey, New York,
South Dakota and Utah, are consistent with the United States'
obligations..." Second, it: "reverses the Panel's finding, in
paragraph 7.2(b)(ii) of the Panel Report, that four state laws,
namely, those of Louisiana, Massachusetts, South Dakota and Utah, are
inconsistent with the United States' obligations..." Thus, the final
report appears to uphold the continuation of laws in states that
specifically authorize various forms of gambling and a state that
allows no gambling.

The attorney who represented Antigua has been a bullying advocate for
the original WTO ruling, and remains that way after today's decision.
See the article in eGaming Review today. It is at
http://www.egrmagazine.com/cgi-bin/articles.pl?action=display&id=679&section=3&keyword=

I reach my conclusion as to a U.S. win based on this directive in the
final report: "modifies the Panel's conclusion in paragraph 7.2(d) of
the Panel Report and finds, instead, that the United States has
demonstrated that the Wire Act, the Travel Act, and the Illegal
Gambling Business Act are measures "necessary to protect public morals
or maintain public order", in accordance with paragraph (a) of Article
XIV, but that the United States has not shown, in the light of the
Interstate Horseracing Act, that the prohibitions embodied in those
measures are applied to both foreign and domestic service suppliers of
remote betting services for horse racing and, therefore, has not
established that these measures satisfy the requirements of the
chapeau;"

I have not yet read the full report but will study it later today.
The effect of the WTO Ruling may be devastating to the online poker
cardrooms' attempts to persuade a state to pass a law authorizing the
operation of an Internet cardroom, even if that legislation were
limited to allowing online rooms to only take players from states that
had similar enabling laws.
Chuck Humphrey