WTO panel rules against US online gambling restrictions

A three-member WTO panel ruled today that the United States has failed to comply with a previous ruling which forbids the restriction of offshore online gambling companies. This would open the door for possible sanctions unless the US changes the rules governing online betting in the country.

This is a very favorable ruling for the tiny nation of Antigua in its four-year battle with the USA over Uncle Sam's online gambling policies.

The panel ruled that US can maintain its current online gambling stance only if the 1978 Interstate Horseracing Act is modified to exclude Internet wagering on horse races. Currently, betting online on horse races is the only legalized form of online gambling in the United States, which has been seen by Antigua (and now the World Trade Organization) as "protectionism" of local businesses, and gave base for the Antigua's complaint before the WTO.

In 2005 WTO ruled that the United States have the legal right to prevent online betting and gambling as a way of protecting public morals and order, which was seen by the US Trade Department as a clear win of the case, but the WTO ruling on Friday made the US acknowledge that it was a setback. Washington is yet to announce if it will appeal the ruling, but it's safe to assume that they will.

Many people remain sceptic, however, if the smallest nation to win WTO ruling will have any power to as for sanctions against the biggest economy of the world. And on one side, it is unlikely that the US will legalize online gambling, but on the other side, it is highly unlikely that the horse racing industry in the country, which is working fast toward developing systems for online betting on all of the US horse racing tracks, would bow down and allow the US lawmakers to cut off the special treatment they have been giving this branch of the gambling industry. It seems that all is now in the hands of the small nation of Antigua and Barbuda to find the muscle it needs to press the USA - getting enough powerful allies, such as the UK, which has been applying its own muscle in the European Union, would greatly help in any future engagements.

Click to see the entire report (PDF)

03/30/2007