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All Things Considered
March 25, 2004
Analysis: New ruling from the World Trade Organization could open the door to Internet gambling in the US
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ROBERT SIEGEL, host:
A decision from the World Trade Organization could open the door to offshore Internet gambling in the United States. The WTO has ruled that US laws prohibiting online betting violate global trade pacts. NPR's Allison Aubrey reports that if the ruling stands, the US would be forced to either change its gambling laws or face trade sanctions.
ALLISON AUBREY reporting:
Last year, the Caribbean island nation of Antigua filed a complaint with the World Trade Organization. Antigua alleged that US laws, which prohibit Americans from gambling in offshore Internet casinos, amounted to an unfair trade barrier. Antigua's interest lies in protecting Internet gambling outfits that have set up shop there, and yesterday, the WTO ruled in Antigua's favor. The US will fight to overturn the decision, says US trade representative spokesman Richard Mills.
Mr. RICHARD MILLS (Spokesman for US Trade Representative): We intend to appeal, and we will argue vigorously that this deeply flawed panel report must be corrected by the WTO appellate body.
AUBREY: Mills argues the WTO has misinterpreted the agreements that gave it the authority to regulate trade and services. He says the Clinton administration negotiated exemptions for gambling.
Mr. MILLS: We believe that the commitments and services that were made by the Clinton administration clearly intended to exclude gambling.
AUBREY: When these agreements were signed in 1995, Internet gambling hardly existed. Fast-forward nine years and Americans are waging an estimated $2 1/2 billion a year online. This is despite restrictions that make many forms of Internet gaming illegal. Dave Schwartz is assistant professor of gaming studies at the University of Nevada-Las Vegas. He says this WTO ruling illustrates that limiting the online gambling phenomenon is becoming more difficult.
Professor DAVE SCHWARTZ (Univers! ity of Nevada-Las Vegas): The WTO court felt that gaming was a form of trade, a form of commerce, that could be sent across borders like anything else. And I think that's the most significant part of the case.
AUBREY: Laws forbidding electronic gambling go back to the 1960's wire acts, which restricted electronic sports wagering, and Congress is currently attempting to update laws for the Internet age. Critics of the World Trade Organization say the ruling handed down on Internet gambling interferes with internal US decisions on how to proceed. Laurie Wallach directs Public Citizen's Global Trade Watch. She says this case will certainly became fodder for free trade opponents, and she predicts the decision will backfire.
Ms. LAURIE WALLACH (Director, Global Trade Watch, Public Citizen): Whatever damage it does in the US, it boomerangs back on the WTO, because it's a wake-up call one more time about the WTO's ability to undermine American voters' and our Congress' control over our own policies.
AUBREY: This need not happen if US negotiators are aggressive in their appeal, argues Bob Fisher. He is a former US trade negotiator. He explains if he were appealing this case, he'd argue for what's known among trade negotiators as `a morals exemption.'
Mr. BOB FISHER (Former US Trade Negotiator): Well, what it says is governments are free to impose restrictions necessary to protect public morals.
AUBREY: It may not be a rock-solid argument given that, in the US, gambling is used to finance everything from schools to football stadiums. But Fisher says Internet gambling is still illegal.
Mr. FISHER: We don't allow our people to do it. The WTO, in essence, is asking us to do something for other countries that we don't even allow our own people to do.
AUBREY: The US will begin the appeals process once the WTO releases a final report on the ruling in the coming weeks. Allison Aubrey, NPR News, Washington.
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Record Number: 200403252005