The United States government has shown a chink in their armor during their war against online gambling. On Friday they admitted that the WTO had ruled against them in the most recent stage of their long standing dispute with Antigua.
Gretchen Hamel, a spokeswoman for the US Trade Representative at the WTO, said the interim report "did not agree with the United States that we had taken the necessary steps to comply".
Antigua's representative Mark Mendel said "America's prohibition in the provision of gambling services from other countries violates the US commitments to the WTO".
The US government considers online gambling to be illegal, however they have created loop holes that exclude horse racing and various state lotteries. Antigua accused the United States of protectionism against international online gambling companies.
Legal & Trade Experts do not believe that Antiguan sanctions will help to drive change in US policies regarding online gambling, however the European Union could take up the cause. If the EU gets involved, Washington will begin to listen more intently out of fear of being sanctioned by larger trading partners.
One lucky benefactor of the ruling could be David Carruthers. Carruthers, the former CEO of BetonSports PLC, is currently on house arrest awaiting trial in a Missouri Federal Court on money laundering and tax evasion chargers stemming from his duties with BetonSports. BetonSports was licensed by Antigua as an online gambling operator. Carruthers, a British Citizen, was arrested in the Dallas/Fort Worth airport while on a layover between Costa Rica and the UK back in July 2006.
The Carruthers arrest was one incident that clearly showed the US had no intention of complying with the WTO ruling. Since then, the online gambling industry has been under constant siege by the US government. In the middle of the night, the Republican led congress tacked legislation banning online gambling financial transactions to a "MUST PASS" Port Security Bill. In November, the President signed UIGEA (Unlawful Internet Gambling Enforcement Act of 2006) into law. UIGEA bars financial institutions from knowingly allowing online gambling financial transactions.
The most recent blow in the US goverment's war on online gambling came this month when the Canadian founders of NETeller were arrested on tax evasion and money laundering charges. NETeller's e-wallet money transfer solution was widely used by operators to take in deposits and process withdraw requests. The arrests triggered a ripple effect with other companies such as Citadel Commerce leaving the US market out of fear of indictment.
Many within the online gambling industry are hoping that the WTO ruling will help pave the way for regulation in the $15 Billion dollar US market. The big question is: When will the United States realize that prohibition does not work?
Point-Spreads.com will continue to monitor the WTO's final ruling and its affect, if any, on US policies.
