Busted by the World Trade Organization for discriminating
against offshore betting shops, the U.S. government
is attempting a procedural maneuver to make the WTO
go away. It's a legalistic move that underscores the
hypocrisy of the government's approach to gambling.
The
dispute stemmed from a complaint brought by Antigua
and Barbuda, a haven for online betting operations.
The Caribbean island nation contended that restrictions
on remote gambling violated the United States' commitment
to an open market for services. U.S. representatives
countered that the restrictions, which date to 1961,
were needed to protect public morals. The WTO agreed,
but only up to a point: U.S. law allows remote betting
on horse races within the 50 states (at licensed off-track
betting parlors), so the government can't block foreign
bookmakers from also taking those bets.
On
Friday, a deputy U.S. trade representative announced
plans to modify the commitment made in 1993 to open
U.S. markets to "recreational services." The
modification will clarify that gambling services are
not included, eliminating the WTO's jurisdiction over
the issue.
The little-used technique might solve the problem with
Antigua, but it won't fix the flaws in U.S. policy.
As the off-track-betting issue illustrates, Congress
loses interest in protecting people from the lure of
online gambling when thoroughbreds and trotters are
involved. Similarly, interstate restrictions on games
of chance evaporate for state lotteries - a form of
gambling that the government enthusiastically promotes.
Meanwhile, restrictions on other forms of wagering have
led to perverse results. The most closely scrutinized
and stable gambling businesses - casinos in Las Vegas
and Atlantic City - stayed out of online wagering, conceding
the field to unregulated and, occasionally, fly-by-night
operators.
A federal law passed last year to prohibit credit card
companies from processing bets has spawned a host of
workarounds, including online wallets and repurposed
prepaid phone cards.
A saner approach would be to allow online betting through
licensed and regulated operators, as proposed by Rep.
Barney Frank (D-Mass.), chairman of the House Financial
Services Committee. Such operators could be required
to meet age-verification standards, analyze betting
patterns to detect and block compulsive gamblers and
pay additional taxes, with a portion going to treat
gambling addiction.
This approach would do far more to protect the public
than ineffective prohibitions that criminalize only
the high-tech version of an otherwise legal act.
This
knee jerk decision could also prove to be a costly mistake
Under WTO Rules, U.S. Is Required to Negotiate Terms
of Compensation With Other WTO Signatory Countries Before
It Is Allowed to Withdraw Sector. More
