U.S. gets jolt in interim offshore gaming ruling

[Bootney Farnsworth]

U.S. gets jolt in interim offshore gambling ruling
By the A.M. Costa Rica staff
The United States got a wake-up call with an interim ruling by a World Trade Organization panel that said a U.S. ban on Internet gambling violates global trade rules.

The case was brought by tiny Antigua and Barbuda, and the World Trade panel said that Internet gambling is covered under the services section of trade agreements.

The United States and certain state prosecutors have been on a crusade to discourage Internet gambling but they have limited power offshore where many of the gambling sites are located. Costa Rica has an extensive Internet and sportsbook industry, as does Antigua.

The United States is likely to appeal the interim ruling that came after months of litigation. But the ruling also may result in a change in direction by U.S. law enforcement. Instead of trying to eliminate offshore gambling, the government may follow the lead of the U.S. state of Nevada which has legalized online gambling, although the final operational details have not yet been worked out.

Such a development would put offshore
gambling operations in direct competition with U.S.-based firms.
New York is one state that has taken the lead against the use of credit cards for offshore gambling. Because most of the major credit card companies are located in that state, threats by Attorney General Elliot Spitzer effectively eliminated the use of credit cards as a means of settling gambling debts online.

U.S. officials claim with some evidence that much offshore gambling is in the hands of organized crime. Several high-profile arrests of U.S. organized crime figures here supported that view.

The U.S. government also has brought charges against those in the United States who would use communication devices to foster Internet gambling here.

The $7 billion-a-year industry is in competition with U.S. cities where gambling is allowed, such as Las Vegas, Nevada, and Atlantic City, N.J. A number of states also allow small-stake gambling. Curiously, the U.S. denied in the World Trade sessions that Internet gambling competes with land-based facilities, a ploy to diminish the strength of the Antigua claims.