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<HR align=left SIZE=1>November 11, 2004
<NYT_HEADLINE version="1.0" type=" ">W.T.O. Explains Ruling Against U.S. Internet Gambling Ban
</NYT_HEADLINE><NYT_BYLINE version="1.0" type=" ">[size=-1]By MATT RICHTEL[/size]
</NYT_BYLINE><TABLE cellSpacing=0 cellPadding=0 align=right border=0><TBODY><TR><TD></TD></TR></TBODY></TABLE><NYT_TEXT>
he World Trade Organization explained yesterday why it had ruled that the United States violated its international trade obligations by prohibiting Americans from gambling over the Internet.
A W.T.O. panel that resolves disputes among members gave specific reasons behind the decision, which was issued last March. At the time, the Department of Justice vowed to appeal the ruling and several members of Congress angrily asserted the decision was equivalent to having the rest of the world dictate United States policy.
In its explanation, the W.T.O. said it was not seeking to undermine the ability of the United States, or any of its members, to regulate industry within its borders. Rather, the panel said that the United States policy prohibiting Internet gambling was inconsistent with longstanding trade agreements.
The ruling stems from a case brought in June 2003 by the Caribbean island nation of Antigua and Barbuda. It argued that United States trade policy did not prohibit Internet gambling and that to do so would be hypocritical given the huge overseas presence of American gambling enterprises.
The ruling allowed Antigua and Barbuda to issue trade sanctions against the United States, said Sebastian Sinclair, an Internet gambling industry analyst with Christiansen Capital Advisors. But Mr. Sinclair said it would be unlikely that such sanctions would have any effect.
He said the larger issue was whether another, larger nation might use the ruling to challenge the United States' policy. And he said that the decision underscored a larger problem: that the United States is markedly out of step with many other nations, which not only allow Internet gambling but license and authorize Internet casinos within their shores.
Despite prohibitions against Internet gambling in the United States, millions of Americans participate in the activity, using credit cards or online payment services to wager on sports or games like poker, blackjack and roulette. Americans will be responsible for about half of the $7.6 billion lost this year on Internet wagers, Mr. Sinclair said.
The effort to regulate and prohibit Internet gambling has been particularly tricky for the United States because the operations are based overseas and players are logging on from home.
Mr. Sinclair said the challenges were similar to those facing the music industry, which has struggled to fight piracy over the Internet.
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<HR align=left SIZE=1>November 11, 2004
<NYT_HEADLINE version="1.0" type=" ">W.T.O. Explains Ruling Against U.S. Internet Gambling Ban
</NYT_HEADLINE><NYT_BYLINE version="1.0" type=" ">[size=-1]By MATT RICHTEL[/size]
</NYT_BYLINE><TABLE cellSpacing=0 cellPadding=0 align=right border=0><TBODY><TR><TD></TD></TR></TBODY></TABLE><NYT_TEXT>
A W.T.O. panel that resolves disputes among members gave specific reasons behind the decision, which was issued last March. At the time, the Department of Justice vowed to appeal the ruling and several members of Congress angrily asserted the decision was equivalent to having the rest of the world dictate United States policy.
In its explanation, the W.T.O. said it was not seeking to undermine the ability of the United States, or any of its members, to regulate industry within its borders. Rather, the panel said that the United States policy prohibiting Internet gambling was inconsistent with longstanding trade agreements.
The ruling stems from a case brought in June 2003 by the Caribbean island nation of Antigua and Barbuda. It argued that United States trade policy did not prohibit Internet gambling and that to do so would be hypocritical given the huge overseas presence of American gambling enterprises.
The ruling allowed Antigua and Barbuda to issue trade sanctions against the United States, said Sebastian Sinclair, an Internet gambling industry analyst with Christiansen Capital Advisors. But Mr. Sinclair said it would be unlikely that such sanctions would have any effect.
He said the larger issue was whether another, larger nation might use the ruling to challenge the United States' policy. And he said that the decision underscored a larger problem: that the United States is markedly out of step with many other nations, which not only allow Internet gambling but license and authorize Internet casinos within their shores.
Despite prohibitions against Internet gambling in the United States, millions of Americans participate in the activity, using credit cards or online payment services to wager on sports or games like poker, blackjack and roulette. Americans will be responsible for about half of the $7.6 billion lost this year on Internet wagers, Mr. Sinclair said.
The effort to regulate and prohibit Internet gambling has been particularly tricky for the United States because the operations are based overseas and players are logging on from home.
Mr. Sinclair said the challenges were similar to those facing the music industry, which has struggled to fight piracy over the Internet.
</NYT_TEXT>
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