SBD/Issue 133/Law & Politics

Bad Bets: WTO Rules Against U.S. Offshore Gambling Policy

The U.S. “could be forced once again to rewrite laws on online gambling” after the World Trade Organization (WTO) ruled it “failed to comply with an earlier decision,” according to Alan Beattie of the FINANCIAL TIMES. In a case brought up by Antigua and Barbuda, the WTO ruled the U.S. “had preserved an ambiguity that appeared to permit U.S. companies to run horse-race gambling across state borders” while prosecuting both U.S.- and Antigua-based gambling operators that “employed the services of foreign gambling businesses.” The U.S. could appeal the ruling, but Antigua’s lead attorney, Mark Mendel, said that it “would be highly unlikely to succeed.” Beattie noted the WTO “can authorise reciprocal trade sanctions against the U.S.” (FINANCIAL TIMES, 3/31). To avoid penalties, the U.S. government would have to allow residents “to gamble on foreign-based sites or eliminate exceptions for off-track betting on horses, including over the Internet, as permitted under the 1978 Interstate Horseracing Act.” Meanwhile, U.S. authorities said that Founder Stephen Kaplan, who is named in a 22-count criminal case related to Internet gambling, was arrested last week in the Dominican Republic (AP, 3/31).

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