WTO Rules for, Against U.S. on Web Gambling
April 8, 2005
The United States can keep some restrictions
on Internet gambling, a World Trade Organization appeals panel said Thursday,
but it also concluded that some U.S. legislation discriminated against foreign
Both sides — the Caribbean nation of Antigua and Barbuda
versus the U.S. — claimed victory in the dispute over whether Washington should
drop prohibitions on Americans placing bets in online casinos.
138-page report, the Geneva-based WTO appeals panel said the U.S. had
demonstrated that the 1961 Wire Communications Act — which was written to cover
sports betting by phone and has been used to prosecute some website operators —
"was necessary to protect public morals or maintain public order."
the panel found against Washington in another respect, saying it failed to show
that the Interstate Horse Racing Act of 1978 was applied equally to foreign and
domestic remote betting services, therefore contravening international trade
Mark Mendel, legal counsel for Antigua, said the WTO ruling meant
that U.S. authorities would have to treat Antiguan online casinos in the same
way as traditional gambling outlets.
"At the end of the day, Antigua
continues to win," Mendel said. "It is clear-cut. We won on all the major
But acting U.S. Trade Representative Peter Allgeier said the
U.S. had won the case and was entitled to maintain its restrictions on Internet
"This report essentially says that if we clarify U.S. Internet
gambling restrictions in certain ways, we'll be fine," Allgeier said.
However, because the panel ruled that American laws discriminate against
foreign commerce, Washington will have to provide Antiguan gaming firms with
fair access to the U.S. market, Mendel said in response to U.S. claims of
"Although a portion of the initial ruling was reversed by the
appellate group, the overall result remains substantially the same — in
Antigua's favor," he said.
There is no further appeal of the
Antigua filed the case before the WTO in 2003, contending that
U.S. restrictions on Internet gambling violated trade commitments that the U.S.
made as a member of the 148-nation WTO.
U.S. trade officials disagreed,
saying negotiators involved in the Uruguay Round of global trade talks, which
created the WTO in 1995, clearly intended to exclude gambling.
a former British colony, has been promoting electronic commerce as a way to end
the twin-island nation's reliance on tourism.
The legal status of
Internet gambling in the U.S. is in dispute. In many states, gambling is banned
or permitted only with restrictions.
The General Accountability Office
has estimated that there are 1,800 online gambling operations.