“Who Was Really the Winner from the WTOs Gambling Decision?”
The recent WTO ruling on whether
or not the U.S. ban on Internet gambling violates free
trade agreements has many within the online gambling
industry wondering which side the ruling favors. Originally,
the tiny island nations of Antigua and Barbuda claimed
that the U.S. ban on Internet gambling is inconsistent
and discriminates against foreign operators. In support
of this claim, lawyers for the two nations pointed
out that in some states online horse race betting is
allowed as long as operators of the site are authorized
by American states and that land-based gambling is
legal in some American states as well. This double
standard effectively prevents foreign online casino
operators from access to U.S. gamblers. The U.S., on
the other hand, has argued that is has the right and
the obligation to ban Internet gambling in order to protect
the “public order” and “public morals”.
The reason for the confusion
over the WTO’s ruling
is that the WTO agreed with the both the U.S.’s “public
morals” defense and with Antigua and Barbuda’s
claim that American policies on online gambling are in
violation of free trade practices. As a result, both
sides are claiming victory.
It is unlikely, however, that the ruling will have
much impact on the online gambling industry, as the U.S.
will continue to ban Internet gambling by finding ways
to circumvent the WTO ruling and foreign operators will
continue to profit from American players who account
for roughly one half of the $10 billion in annual revenues.
Even though American law makes it illegal for American
citizens to both play and operate Internet gambling sites,
for a variety of reasons, the law is virtually impossible
to enforce. Furthermore, many states that allow land-based
gambling are in favor of allowing online gambling as
well. Additionally, some experts point out that it would
make more sense if the U.S. permitted American firms
to compete against foreign Internet gambling firms and
at the same time regulated the industry and taxed the
revenues. Australian already does this and England is
planning to so too. The U.S. will soon have to adopt
similar policies.
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