WTO Asked To Rule On US Internet Gaming Compliance

by Glen Shapiro, LawAndTax-News.com, New York

29 May 2006

The US and tiny Antigua and Barbuda have asked the World Trade Organization's Dispute Settlement Body to establish a compliance panel to determine whether the US remains out of compliance with the WTO's ruling on internet gambling laws issued more than a year ago.

Antigua's Minister of Finance and the Economy, Dr Errol Cort, said last week that if the WTO finds that the United States is failing to comply with last year's ruling (and it has pointedly refused to do anything to change its laws or practices in response) then his government reserves the right to request authorization to suspend concessions or other obligations under the relevant WTO provisions. This could, for instance, include the suspension of intellectual property conventions, allowing Antigua and Barbuda to manufacture and distribute pirate goods and services with impunity.

Antigua is also up in arms about a bill sponsored by Rep. Bob Goodlatte (R-Va.), chairman of the House Judiciary subcommittee on crime, which is currently moving forward in Congress, and which would add an “enforcement mechanism” to the existing Wire Act to address the situation where a gambling business is located offshore but the gambling business uses bank accounts in the United States.

The US has successfully used the Wire Act, which prohibits the use of telecommunications to make wagers across state lines or internationally, to attack the US operators of offshore casinos.

Last week, the US District Court for the District of Columbia unsealed an indictment under the Wire Act against the operators of two internet gambling firms based in Antigua and Barbuda for offenses related to an estimated $250 million worth of internet gambling wagers.

The indictment alleges that wagers were placed by toll-free telephone numbers and through the website, www.BetWWTS.com, and other sites controlled by the defendants in violation of the Wire and Travel Acts.

The indictment also alleges that by causing funds to be sent from places within the United States to places abroad with the intent to promote Wire and Travel Act violations, the operators engaged in a money laundering conspiracy.

US punters are estimated to be behind up to half of the $12 billion a year wagered in cyber casinos. Antigua-based operators are thought to account for 25% of this turnover.

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