LexisNexis(TM) Academic - Document

LexisNexis(TM) Academic - Document
Copyright 2005 The Financial Times Limited
Financial Times (London, England)

April 12, 2005 Tuesday
USA Edition 2

SECTION: COMPANIES THE AMERICAS; Pg. 22

LENGTH: 354 words

HEADLINE: Online gambling welcomes ruling

BYLINE: By AMY YEE

DATELINE: NEW YORK

BODY:


Online gaming companies cheered last week's ruling by the World Trade Organisation on a case involving the US and Antigua. A WTO appeals panel concluded that while the US can keep some restrictions on online gambling, some US legislation discriminates against foreign operators.

"We're pleased about the ruling," said Nigel Payne, chief executive of UK-listed Sportingbet, the largest quoted online gaming company. "On balance, it's good for the industry. The overall conclusion obliges the US to sit down and comply."

Sportingbet's servers are based in the Caribbean island-state of Antigua and Barbuda, an important location for online gambling companies.

But the same companies acknowledged that the US, the largest market for internet gambling, was unlikely to open up to the sector in the near future.

Mr Payne said it could take a couple of years for the ruling to have any effects. "Without a question, there will be several months of huffing and puffing and blustering in America."

The US Department of Justice considers the industry illegal, and many online gaming companies are based offshore, where they are immune from US law.

The US prevents media companies from accepting advertising on online gambling and clamps down on banks that allow credit card transactions.

Both the US and Antigua claimed victory in last Thursday's ruling by the WTO, although the body concluded that US laws were "inconsistent with the General Agreement on Trade in Services" (GATS) and recommended "conformity with its obligations". GATS is an international trade agreement that aims to remove all barriers to trade in services.

The US interpreted the WTO ruling as allowing US bans on foreign online gambling, based on an exception citing the protection of "public morals and/or public order".

"US restrictions on internet gambling can be maintained," said Peter Allgeier, acting US trade representative. "This report essentially says that if we clarify US internet gambling restrictions in certain ways, we'll be fine."

Antigua filed a complaint in 2003 with the WTO claiming that the US violated global laws by criminalising online betting.

LOAD-DATE: April 11, 2005