Antigua winning internet gambling fight against US

Out-Law News | 26 Mar 2004 | 12:00 am | 1 min. read

The World Trade Organisation has ruled that the US approach to internet gambling is in breach of world trade rules. The tiny Caribbean state of Antigua complained that the moralistic stance of the US was seriously damaging its economy.
The World Trade Organisation has ruled that the hard line taken by the US on internet gambling is in breach of world trade rules. The tiny Caribbean state of Antigua had complained that the moralistic stance of the US was seriously damaging its economy.

The decision, which is only a preliminary ruling, came after Antigua and Barbuda complained to the WTO last year that US prohibitions against internet gambling are discriminatory and in breach of international trade agreements that require the US to allow foreign internet companies to offer their services to US citizens.

Antigua and Barbuda, with a population of less than 70,000, has an economy largely dependent on tourism, but with a growing market in internet gambling. According to a report on Caribbean Net News.com, the country has lost around US$30 million since the US began its attempts to restrict Americans' access to on-line gambling services.

Running an internet gambling operation is generally illegal in the US, whether it is based within the country or off-shore. In practice, however, it is difficult for enforcement officials to prevent US citizens accessing off-shore internet sites, and the industry is therefore growing.

US criminal law applies to companies operating out of the Caribbean, but it is often difficult to physically get the accused into court to adjudicate the matter. The most commonly used legislation to control internet gambling is the Wire Communications Act of 1961, albeit intended to prevent gambling over the telephone.

The most recent attempts to prevent US citizens gambling on-line focus on methods of paying for the gambling services. Bills to ban the use of credit cards or any other form of electronic payment for off-shore internet gambling sites are going through the Senate and House of Representatives at the moment.

One such bill was passed by the House of Representatives in October 2002, only to fall in the Senate less than three weeks later. In practice, many credit card companies refuse to process gambling transactions, but this is on a voluntary basis.

The Bush administration looks set to appeal the Antigua decision, according to Associated Press, and will argue that when the WTO was set up in 1995, gambling services were excluded from its remit.

A final ruling is not expected until May.