The World Trade Organization – How the United States Should Comply

In response to a dispute filed by the Caribbean island nations of Antigua and Barbuda, the World Trade Organization (WTO) ruled in March 2007 that the U.S. unfairly prohibits foreign Internet gambling operators from accessing the U.S. market, while allowing domestic companies to legally accept online bets. In response, the European Union, Japan, India, Canada, Australia, Costa Rica, Macao have all joined Antigua and Barbuda in seeking compensation from the U.S. as a result of this trade agreement violation.

Rather than close the U.S. Internet gambling market to foreign companies and pay trade concessions to do so, the U.S. should comply with WTO requirements and open its market to foreign competition. Legislation introduced by Rep. Barney Frank to regulate Internet gambling could bring the U.S. into compliance with WTO requirements by creating a level playing field among domestic and foreign Internet gambling operators.

European Commission Investigation

In March 2009, the European Commission issued a preliminary report that found U.S. laws on Internet gambling are discriminatory and legally not justified. The investigation comes as the result of complaints by European companies that the U.S. violates international trade law by threatening and pursuing criminal prosecutions, forfeitures and other enforcement actions against foreign Internet gambling operators, while allowing domestic U.S. online gambling operators, primarily horse betting, to flourish. The E.U. Trade Commissioner released a statement that encourages the U.S. to regulate Internet gambling as a way to address this issue.

Resources

• European Commission Investigation Finds US Laws on Internet Gambling Violate Trade Agreement
• Letter to the U.S. Trade Representative from eight members of Congress, including House Financial Services Committee Chairman Barney Frank and House Committee on the Judiciary Chairman John Conyers, arguing that the U.S. should consider altering its ban on internet gambling rather than pay compensation to countries barred from offering internet gambling services in the U.S.