程阳 EU to US: WTO appeal justified, so fix your gambling laws

http://www.theyeshivaworld.com/wp-content/uploads/2008/05/internet%20ban.jpgEU to US: WTO appeal justified" TITLE="程阳 EU to US: WTO appeal justified" />Betting on horseflesh and betting on online poker might seem to be identical activities to most people, but US laws have mandated that they aren't since 2006. Now the EU has cleared the way for a WTO challenge to those laws—will the US's anti-online-gambling initiative go down for the count after just two years?

March 26, 2009 9:50 PM CT  source source2

The United States prides itself on being a staunch proponent of fair trade and is a prominent member of the WTO (World Trade Organization). When decisions by that body doesn't go its way, the US has a tendency to turn as cranky as any other nation that's been ordered to do something it doesn't want to do. In this case, the European Commission has confirmed that Uncle Sam's gambling laws are in violation of WTO rules, and as such must be overhauled.

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Expect some blowback on this issue, particularly from my own home state of Kentucky, where Governor Steve Beshear ran on a platform of boosting the prominence and popularity of horse racing in the state. Kentucky, you may recall, is the same state that tried to argue its judges had the right to seize domain names and block access to them if they were found to be hosting illegal online gambling activity, even if the server itself was located in Antigua or Vanatu. This rather dubious legal proposition has since been overruled, but don't expect the issue to be simply resolved in local, state, or even national politics. The culture and economics of horse racing are concentrated in Kentucky and a handful of other states, but Indian casinos and the gambling industry in general have powerful lobbyists in Washington.

The EU's statement is not the ringing attack on US gambling restrictions that some might have hoped for. The organization launched an investigation into US regulations on March 11, 2008 after a complaint was filed by the Remote Gambling Association (RGA). The RGA won its point, insomuch as the EC found "that US laws deny access and discriminate against foreign suppliers of gambling and betting services inconsistently with US WTO obligations." The report goes on to label the regulatory changes the United States made in 2006 (banning online gambling) "legally not justified and discriminatory."

The report indicates, however, that the chore of resolving these issues lies upon the shoulders of the United States and the Obama Administration. A formal complaint to the WTO is justified, but the US has previously indicated to that body that it intends "to withdraw its WTO commitments on gambling and betting services." Once that happens, the US would not need to guarantee future access to its gambling and betting market.

The US has previously attempted to buy its way out of the issue and signed a negotiated settlement with the EU back in 2007 aimed at providing Europe with various incentives to keep the ban intact. It's not clear if that agreement broke down, expired, or is now defunct for another reason, but if the RGA presses ahead, it'll be the US explaining to the WTO why the "freest nation in the world" won't let its citizens throw their money away online.

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