WTO may add fuel
to Internet bonfire

Mar 21, 2006 4:04 AM

As the U.S. Congress debates another anti-Internet gambling initiative, the World Trade Organization (WTO) is set to rule whether the U.S. should be reprimanded for banning foreign online gambling operators.

Twelve months ago, the WTO ruled that U.S. policy prohibiting Internet gambling violates international trade law.

The WTO decision was a victory for Antigua and Barbuda, two Caribbean countries that foster Internet gambling businesses. Americans account for more than 70 percent of their market.

Antigua and Barbuda contended that U.S. prohibitions on Internet gambling violate trade commitments the U.S. has made as a member of the WTO.

The U.S. government appealed the WTO ruling to a seven-member appellate body, which is expected to announce its ruling before May.

Even if the WTO ruling is upheld, many observers believe the U.S. government would not change its position on Internet gambling.

"We’re going down one path, and the rest of the world is going down a completely different path," said Sebastian Sinclair, an analyst with Christiansen Captial Advisors.

Many observers agree that it would be difficult for the WTO to enforce its ruling, even though it has the authority to impose sanctions against the U.S.

"The WTO is a trade organization ”¦ not a world court," said Tony Cabot, a Las Vegas attorney who specializes in Internet gambling issues. "Their power is limited by the terms of the agreement that members of the WTO agreed to."

The American Gaming Association, which opposed last year’s anti-Internet gambling legislation, believes a favorable WTO ruling could make Congressmen more likely to support online gambling restrictions.

"I don’t see much of an appetite in the Senate for letting the WTO tell us what our internal policy ought to be," said AGA President Frank Fahrenkopf.