Deadline Extended in World Trade Organization Online Gambling Case

Yesterday's deadline to negotiate settlements the U.S. must pay the European Union and seven other trading partners as part of a World Trade Organization (WTO) violation related to Internet gambling was extended to December 14. This provides Congress another opportunity to avoid paying trade concessions worth an estimated $100 billion by regulating Internet gambling through legislation. Whether they choose to do this is or not is another question entirely.

The WTO Internet gambling trade conflict is the most significant WTO case in history and its implications are enormous. In response to a dispute filed by Antigua, the WTO previously ruled 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 Office of the U.S. Trade Representative announced the U.S. intention to withdraw its commitments to the WTO, thus allowing the United States to keep its markets closed to offshore based internet gambling operators. The European Union, Japan, India, Canada, Australia, Costa Rica, and Macao originally joined Antigua in requesting talks to discuss compensation with the U.S. Australia later dropped its claim, while Japan reached a deal with the U.S., though the terms were not made public. If the U.S. does not settle with each country by December 14, trade concessions will be determined by WTO arbitration.

Barney Frank’s (D-MA), Internet Gambling Regulation and Enforcement Act, introduced in Congress a few months ago, would bring the U.S. into compliance with WTO trade agreements by regulating online gaming.

Momentum has been building for the Internet Gambling Regulation and Enforcement Act, with more members of Congress co-sponsoring the legislation. "Additional support for the Frank bill provides encouragement that the U.S. can avoid a major trade clash along with the payment of billions in trade compensation and penalties," said Jeffrey Sandman, spokesperson of the Safe and Secure Internet Gambling Initiative. "Congressional action now to regulate Internet gambling can provide a responsible policy solution that would allow the U.S. to comply with WTO requirements. It would also give all Americans the right to make up their own mind whether to gamble online."

The Safe and Secure Internet Gambling Initiative promotes the freedom of individuals to gamble online with the proper safeguards to protect consumers and ensure the integrity of financial transactions. More information on the initiative is available at http://www.safeandsecureig.org/. The Web site also provides a means by which individuals can register support for regulated Internet gambling with their elected representatives.