The United States has failed to comply with a ruling that it illegally restricts Internet gambling sites based overseas, the World Trade Organization ruled. The WTO ruling has fueled the speculations of possible commercial sanctions unless Washington changes its rules governing online betting. A three-member WTO compliance board took side of Antigua and Barbuda in ruling that Washington had unsuccessful to change legislation that unjustly targets offshore casinos. The Geneva-based trade arbitrator has said Washington can maintain restrictions on online gambling, on condition that its laws are equally applied to American operators offering remote betting on horse racing.
Antigua and Barbuda, a Caribbean nation with a population of 80,000 people, had challenged Bush administration efforts to shut down the estimated $12 billion global business to U.S. residents, who constitute for almost half of the market. In its effort to lash out on this business strongly the U.S. banned credit card companies from processing payments to betting sites such as SportingBet Plc and Empire Online Ltd., which then terminate U.S. operations or sold them for insignificant amounts.
In twice winning positive rulings from the WTO, Antigua became the smallest nation ever to clinch a legal victory from the organization. In spite of everything, the country’s size may leave open the question of how much leverage it has to force the U.S. to make changes. At the same time as WTO rules permit the country to take actions such as removing protections for intellectual property that originates in the U.S., it may be disinclined to further alienate a country that provides it with goods and with a steady stream of sun-seeking tourists.
In its ruling, the WTO dispute settlement board noted that the U.S. had not taken steps to bring into line its own national regulation of gambling with its prohibition against U.S. residents placing bets at overseas-based Internet casinos. The board further stated that the US has missed a chance of an opportunity to remove the ambiguity and contradictions between intrastate regulations and international rules.
In the case, Antigua and other nations have argued that since the U.S. permits remote betting on horse racing and other types of gambling within its borders, it was in violation of international trade law with its ban on Web gambling.
