Wednesday, April 26, 2006
US claims to comply with WTO gambling ruling

Earlier this month, the WTO deadline passed by which the U.S. had to comply with the WTO gambling ruling.

As a reminder, the ruling acknowledged that the US (erroneously) included gambling services under their WTO commitments. However, it added that a ban on cross-border gambling services may be justified under WTO rules to protect "public morals", but that such ban should not be applied in a discriminatory manner. The WTO concluded that the 1978 Interstate Horseracing Act is discriminatory against foreign suppliers and incompatible with US’ WTO commitments.

In response to the WTO ruling, the U.S. made the following statement (see also WTO website

On 5 April 2006, the US Department of Justice confirmed the position of the US Government regarding remote gambling on horse racing in testimony before a subcommittee of the US House of Representatives. The Department of Justice stated that:

The Department of Justice views the existing criminal statutes as prohibiting the interstate transmission of bets or wagers, including wagers on horse races. The Department is currently undertaking a civil investigation relating to a potential violation of law regarding this activity. We have previously stated that we do not believe that the Interstate Horse Racing Act, 15 U.S.C. §§ 3001-3007, amended the existing criminal statutes.

In view of these circumstances, the United States is in compliance with the recommendations and rulings of the DSB in this dispute.

In other words, the Department of Justice (DoJ) believes that interstate betting on horseracing is illegal, which this view is not shared by politicians and certainly not the racing industry. The DoJ is therefore not expected to act against interstate betting in the foreseeable future.

If nothing is done against interstate betting, Antigua and Barbuda (US’ opponents in this matter) said they would retaliate with trade measures against the US. The practicality of this retaliation is doubtful, as it will likely hurt Antigua more than the US.