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US, Antigua Both Claim Victory in Internet Gambling Case

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While stopping short of handing the U. S. a complete victory, the WTO opened the door for the U. S. to impose regulations and restrictions on Internet gaming. In fact, the 138-page ruling was broad enough that both the U. S. and Antigua were claiming victory.

In a closely watched case with potentially far-ranging implications about Internet governance, the World Trade Organization (WTO) ruled that the U. S. can set certain limits on Web gambling sites located in offshore locations. The decision was seen as a partial reversal of last November's ruling against the U. S.

In that instance, a three-person committee ruled that the U. S. had violated international trade treaties by attempting to interfere with web gambling operations in the Caribbean nation of Antigua. While stopping short of handing the U. S. a complete victory, the WTO opened the door for the U. S. to impose regulations and restrictions on Internet gaming.

The WTO said the U.S. could restrict online gambling on sporting events, but could not prohibit offshore companies from offering online betting on horse racing, since some states already allow that form of gaming over the Internet.

The U.S. maintains that the ruling essentially upheld long-standing prohibitions against online casinos that exposes those who operate them to prosecution under U.S. law.

Specifically, the WTO cited language in existing international trade law that gives a country an exception from open trade policies when prohibitions are necessary to protect "public morals." The earlier ruling had found that the U.S. had no right to claim that exemption.

"U.S. restrictions on Internet gambling can be maintained," acting U.S. Trade Representative Peter Allgeier said. The office of the trade representative will explore how to address a specific finding relating to horse racing, he added, but won't ask Congress to weaken existing restrictions on Internet gambling. "This report essentially says that if we clarify U.S. Internet gambling restrictions in certain ways, we'll be fine."

June 19, 2006
Posted By Hector Rodriquez
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