SOURCE: Gaming Intelligence Group

A leading trade policy expert has called on the U.S. government to speedily resolve its dispute surrounding internet gambling with the World Trade Organisation, in order to avoid damaging the WTO's credibility and exposing the United States to billions in compensation claims.

The WTO's ruling in March, involving a dispute filed by the Caribbean island nations of Antigua and Barbuda, found 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.

The United States Trade Representative announced in May that the U.S. would withdraw its commitments to the WTO to open its markets to offshore-based internet gambling operators rather than comply with the ruling.

“The U.S. response, and I use that word loosely, is unprecedented in dispute settlement history," said Sallie James, policy analyst at the Cato Institute's Centre for Trade Policy Studies.

“Withdrawing commitments from the WTO would be unique in the organisation's history and would also be extremely damaging to its credibility. These actions by the U.S. are an affront to other WTO members and could damage the WTO.”

Currently, the European Union, India, Japan, Australia, Canada, Costa Rica, Macao, and CARICOM which represents 15 Caribbean nations, are seeking compensation from the U.S. for economic injury resulting from this trade agreement violation.

If the United States continues to violate WTO obligations, it could be subject to pay Antigua and Barbuda the $3.4 billion dollars that they have demanded and tens of billions of dollars to other countries.

Another solution to the U.S. non-compliance with the WTO obligations may be found in the Internet Gambling Regulation and Enforcement Act that was introduced earlier this year by U.S. Representative Barney Frank.

This bill, once enacted, would bring the U.S. into compliance with WTO requirements by regulating Internet gambling and creating a level playing field among domestic and foreign Internet gambling operators.

"The U.S. should act now to address this international trade violation and end its prohibition of Internet gambling," advised Jeffrey Sandman, representative of the Safe and Secure Internet Gambling Initiative.

"If the U.S. continues to prohibit Internet gambling, our country could wind up being forced to pay billions in trade compensation. However, if we move to regulate Internet gambling, we can develop a responsible policy solution that allows the U.S. to come into compliance with WTO requirements and give every American the right to make up their own mind whether to gamble online," Sandman said.