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WTO Final Decision - WOW!!

March 30th, 2007

The World Trade Organization issued it’s Final Decision today in the case brought by Antigua and Barbuda against the United States. While we’ll certainly have more to say shortly, the WTO emphatically rejected the United States feeble argument that it had complied with the WTO’s previous decision to halt discriminatory treatment of remote gambling operators located in foreign countries. The WTO identified not only the sanctioned operations of horsebetting sites like YouBet.com which are permitted to operate in the U.S., but also pointed out that the U.S. Congress, in passing the UIGEA signed in October 2006, also permitted remote gambling to be conducted by wholly intra-state operators, which also was found to be discriminatory.

While many have argued that the U.S. can fix this problem by simply outlawing interstate wagering on horseracing, which we believe is highly unlikely, the problem is not so simple. For instance, the U.S. would also have to preclude all intra-state wagering, which was a critical exception in UIGEA included in deference to states rights advocates who insisted that individual states be able to determine what activities are permitted within their boundaries. The expansive impact of this decision, and the chaos which it throws upon current law enforcement efforts to combat the “evils” of internet gambling, will be neither easily nor quickly solved.

Maybe, just maybe, the U.S. will see the perils of it’s current course of conduct, and begin to study whether they can establish a workable mechanism for regulating the online gambling industry. Our belief is the national gaming industry in the U.S. will eventually demand nothing less.

The official text as issued by the WTO can be found here from the WTO.org site. All previous filings in the case can be found in the Official Annex to the decision at the WTO.org website.

More comments and observations to come.

Entry Filed under: WTO

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