U.S. Reaffirms Ban on Online Gambling

The United States will use a World Trade Organization procedure to clarify its ban on online gambling, a U.S. trade representative said Friday.

A measure signed into law by President Bush in October prohibits U.S. banks and credit card companies from processing payments to online gambling businesses outside the U.S., taking many of these companies by surprise.

In March, a WTO panel opened the door to possible commercial sanctions against the U.S. when it ruled that the law as written unfairly targets offshore casinos. The twin Caribbean island nation of Antigua and Barbuda has argued that online gambling provides income for hundreds of its citizens.

The Geneva-based global trade referee said Washington can maintain restrictions on online gambling, so long as its laws are equally applied to U.S. operators offering remote betting on horse racing.

On Friday, Deputy U.S. Trade Representative John K. Veroneau said that because federal and state laws have prevented domestic companies from profiting off of interstate gambling for decades "it would be nonsensical for the U.S. to make a commitment to open up interstate gambling for foreign providers."

Veroneau said the WTO process would allow the U.S. to clarify its stance on the issue so that there would be no basis for any WTO member to seek or expect compensation.

The ban on Internet gambling enacted last fall, which prompted companies such as Sportingbet and Leisure & Gaming to sell their U.S. operations, would be overturned under legislation proposed last month by Rep. Barney Frank, D-Mass. The bill faces long odds in Congress and likely opposition from the Bush administration.

The $12 billion Internet gambling industry is based outside the U.S., mostly in Britain, although half of its customers live in America.