David Canton – for the London Free Press – February 24th, 2007

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Things are heating up in the world of online gambling. Most of the action, however, is taking place far away from the poker tables of cyberspace.

In January, the World Trade Organization (WTO) released a report in a dispute between the Caribbean nation of Antigua and Barbuda and the United States. The Antiguans first brought its case to the WTO in 2003, stating U.S. laws restricting internet gambling were in violation WTO free-trade commitments. Online gambling has provided a substantial source of income for companies based in places such as Antigua.

In April 2005, the WTO ruled against U.S. regulations on internet horse-race betting, stating U.S. rules discriminated against foreign companies. The Antiguans saw this decision as a victory, although the Americans have done little to comply. In July 2006, the Antiguans asked the WTO to investigate the issue further and decide whether U.S. restrictions on online gambling comply with international trade rules.

Although the panel’s January preliminary ruling has remained confidential, the U.S. Trade representative’s office has acknowledged the decision goes against the Americans. A final report is to be made public in March.

The American restrictions may be challenged by the European Union. As EU Internal Market Commissioner Charlie McCreevy told the European Parliament in January, “In my view it is probably a restrictive practice and we might take it up in another (forum).” McCreevy sees U.S. actions as a potential attempt to protect its gambling industry from foreign competition.

What has countries such as Antigua and Barbuda up in arms are aggressive American attempts to crack down on their revenue from online gambling.

A few notable arrests have been made. In July 2006, the British chief executive of Costa Rican-based BetonSports, David Carruthers, was detained at an airport in Dallas while making a stop-over between the U.K. and Costa Rica. Also, in January, subpoenas were issued against four Wall Street investment banks that had done business with offshore gaming companies. The Justice Department also has threatened to go after advertising executives whose companies do business with such casinos. The thought is, if enforcement against the gaming companies should prove fruitless, the next best step is to go after their American business partners.

If these companies are situated in countries where online betting is allowed and whose laws they abide by, how can the U.S. government enforce its rules upon them? Evidently, the US authorities are not concerned about that.