Tuesday, April 03, 2007

In a judgment published late on Friday the World Trade Organisation (WTO)
ruled that the unilateral prohibition imposed by the US on offshore Internet
gambling is illegal. However the decision is unlikely to have much effect in
the short term at least - as the Bush administration has simply ignored a
2005 WTO finding that concluded the US was in breach of WTO rules by banning
payments by individual US citizens to gambling Web sites whilst
simultaneously allowing gambling within the country itself. It was back in
1995 when the US government first promised the international organisation
that it would open-up its gambling industry to competition. However, under
extreme lobbying pressure from powerful interests in places such as Las
Vegas and Atlantic City, for the next ten years nothing was done to fulfill
the pledge. The original complaint against the US was made by the tiny
Caribbean nation of Antigua and Barbuda and years later, in a second David v
Goliath re-run, representatives of the 70,000 citizens of the islands
appealed against the US government's decision reached in October 2006, that
made it illegal for US residents to make credit card payments to overseas
betting organisations. This time around the WTO has found that the US action
is discriminatory and in breach of the organisation's rules and has said
that if the ban is not lifted sanctions may be applied. Before the ban the
offshore Internet gambling sector was estimated to be worth US$12 billion a
year, with US punters accounting for $6 billion of that turnover. In its
response to the WTO, the Bush administration did not contest the finding
that the government had failed to comply with the earlier 2005 ruling
requiring American gambling to be opened to competition but instead took
refuge behind a claim that it had been forced to prohibit Internet gambling
to "protect public order and public morals". However, despite the cynical
whipping-up of a spitball of synthetic moral froth by certain parties and
religious interest groups in Washington DC and elsewhere, the reality is
that the US ban has always been more about protectionism than any
spiritually higher purpose. Thus the US government has been forced to cast
about in an effort to find some justification for its actions and finally
settled on the bizarre argument that the prohibitions that were in place
before the enactment of the October 2006 law apply to both foreign and US
betting services alike while the WTO's decision applies only to gambling on
horse racing.

Upon reading a little further into matters, one finds, altogether
unsurprisingly, that it is legal for the US to discriminate against overseas
companies in relation to gambling on horse racing.

Further in its response, the Bush administration says the October 2006 law
is not covered by the WTO ruling and that the government's 1995 commitment
to open gambling to foreign companies was "an oversight on the part of the
Clinton administration." This is as classic an example of retrospective
buck-passing as has been seen in many a year.

The WTO judgment say the US government "had an opportunity to remove the
ambiguity between legal betting on horse racing across state borders and
strictures and prohibitions on other types of gambling but instead, rather
than take that opportunity, the US enacted legislation that confirmed that
the ambiguity at the heart of this dispute remains."