The ban on Internet gambling that passed last year could create a heap of trouble between the U.S. and the World Trade Organization. Antigua and Barbados are pressing their WTO complaint that the ban violated the treaty because it effectively favors U.S. gambling interests over non-U.S. companies that house gaming servers in their countries. And the U.S. Trade Representative is not finding it as easy as he thought to simply state that Internet gambling is not covered by the treaty. Turns out it just might be part of entertainment services covered by the treaty. And twice, in 2004 and 2005, the WTO ruled against previous U.S. attempts to curtail online gambling by preventing U.S.-based banks from processing transactions with gambling sites. Although it does not seem likely the ban will be overturned anytime soon, another WTO ruling unfavorable to the U.S. could mean a fine between of up to $10 billion, according to Mark Mendel, attorney for Antigua in the WTO proceeding. And although a trade dispute over Internet gambling may seem trivial, international trade officials are watching the dispute closely and treating it seriously. Got a whole lot of money that’s ready to burn So get those stakes up higher!
Steven Titch served as a policy analyst at Reason Foundation from 2004 to 2013.