Internet gambling is generally illegal in the US, whether it is
based within the country or off-shore. In practice, however, it is
difficult for enforcement officials to prevent US citizens
accessing off-shore internet sites, and the industry is therefore
growing.
US criminal law applies to companies operating out of the
Caribbean, but it is often difficult to physically get the accused
into court to adjudicate the matter. The most commonly used
legislation to control internet gambling is the Wire Communications
Act of 1961, albeit intended to prevent gambling over the
telephone.
The most recent attempts to prevent US citizens gambling on-line
focus on methods of paying for the gambling services. Bills to ban
the use of credit cards or any other form of electronic payment for
off-shore internet gambling sites are going through the Senate and
House of Representatives at the moment.
One such bill was passed by the House of Representatives in
October 2002, only to fall in the Senate less than three weeks
later. In practice, many credit card companies refuse to process
gambling transactions on a voluntary basis.
Despite the enforcement difficulties, Antigua, with a population
of less than 70,000, has complained to the World Trade
Organisation, claiming that the US approach has had a negative
effect on the country.
The bulk of the Antiguan economy relies on tourism, but internet
gambling has been a growth sector in recent years. According to a
report on Caribbean Net News.com, the country has lost around US$30
million since the US began its attempts to restrict Americans'
access to on-line gambling services.
Antigua took the matter before the WTO, claiming that these
prohibitions are discriminatory and in breach of international
trade agreements that require the US to allow foreign internet
companies to offer their services to US citizens. The EU, Canada
and Japan are supporting Antigua in the action.
The US argues that gambling on the internet is different from
casino-based gambling, not least because of the difficulty in
preventing children from accessing the services. It also says that
the restrictions it has put in place do not in fact breach the
trade agreements.
According to The Wall Street Journal this is the first time that
a country has applied international trade agreements to an internet
dispute and will result in the WTO deciding whether internet
services must be treated in the same way as their traditional
counterparts.
The WTO ruling is expected in about a month.
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