GET RID OF U.S. ONLINE GAMBLING DISCRIMINATION

13 April 2007

L.A. Times editorial examines the WTO vs. USA issue

Solid Sunday reading this week was a succinct but well-informed editorial opinion in the Los Angeles Times that examined the discriminatory nature of US legislation dealing with online gambling.

Under the title of "Get Rid of Gambling Restrictions," the op-ed piece claims that the U.S. doesn't mind the lottery, but when it comes to sports betting across interstate or international boundaries, all bets are off. And it concludes, "They shouldn't be."

The author points to the David and Goliath nature of the World Trade Organisation confrontation between the United States and the government of Antigua and Barbuda, which the islanders won recently despite a US appeal. Postulating that the tiny Caribbean island government could be the one to force its overwhelmingly powerful neighbour into compliance, the writer points to the discriminatory nature of US legislative "carve-outs" for horse racing, state lotteries and fantasy sports.

"Not since 1960 has it been legal under federal law to place or take bets on sports using interstate or international phone lines," the piece continues. "The Federal Wire Act of 1961 and subsequent measures have been interpreted to ban online gambling as well, or at least gambling on sports. At issue is whether those laws constitute "arbitrary and unjustifiable discrimination" against foreign firms.

"Do they? Antigua and Barbuda argue that they do - and the World Trade Organisation agrees. So do we."

Perhaps arguably, the writer claims that the US ban, which is targeted on preventing financial transactions with online gambling companies, has had little effect. "It hasn't stopped Americans from betting (and losing) millions of dollars at online casinos and bookmaking operations based in other countries. Nevertheless, U.S. policy has irritated many of its trading partners, including Antigua and Barbuda, which asked the WTO in 2003 to rule that U.S. gambling restrictions violated an international treaty governing trade in services.

"Eventually, in 2005, a WTO appeals panel accepted the U.S. argument that its gambling restrictions were needed to protect public order and morals.

"But by permitting off-track betting parlours in the U.S., the WTO ruled, Congress created an exception to the ban on remote gambling that discriminated against foreign bookmakers. After two more years of wrangling over what the panel's order meant, a WTO tribunal ruled late last month that the U.S. remained out of compliance."

The editorial concludes with the view that the U.S. faces trade sanctions from the WTO unless Congress does one of two things: Either acknowledge that betting on horses from overseas is no greater threat to the nation's moral fiber than it is at an OTB parlour, or make OTB parlours illegal.

"Maybe it doesn't have the stomach for either. If so, then Antigua and Barbuda may want to ask the WTO to ponder why allowing the interstate sale of lottery tickets - a form of state-sponsored gambling - is any less hypocritical than the U.S. stance on thoroughbreds and trotters."

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