An Internet gambling ban approved by Congress violates a ruling last year by the World Trade Organization and could interfere with U.S. trade policy, a lawyer who represents the online wagering country of Antigua said.
“What Congress is really doing is putting the U.S. on a clear collision course with free trade and the WTO,” said Mark Mendel, an attorney in El Paso, Texas.
Mendel represented Antigua in a dispute with the United States about whether the Caribbean island could legally accept Internet gambling wagers from customers in the United States.
In April 2005, a WTO court in Switzerland ruled the United States could ban Internet gambling within its borders. But the court also decided U.S. law was inconsistent because it allowed Internet operations for horse racing and state lotteries.
Both the U.S. Trade Representative’s office and Antigua declared victory after the WTO decision, but it’s still unclear how the ruling affects Internet gambling, which has become a $12 billion industry with more than 2,300 Web sites.
Mendel said the ban Congress approved would allow Nevada and other states to conduct Internet gambling within their own borders.
“That flies in the face of the WTO ruling,” Mendel said.
Gretchen Hamel, a spokeswoman for the U.S. Trade Representative, said her agency is still reviewing the ban that passed Congress on Saturday. She declined to comment further.
The ban, which was attached as a rider to a port security bill, was submitted to President Bush Wednesday. He is expected to sign it within the next two weeks.
Mendel said the WTO may decide by January or February that the Internet gambling ban means the United States is not in compliance with its international trade agreements.
“I have always believed the United States has too much at stake in the WTO to let it all blow up because of this one case. I think ultimately, they will have to work something out with us,” Mendel said.
Mendel said he and several high-level government officials from Antigua were in Washington last week to lobby against efforts by Senate Majority Leader Bill Frist, R-Tenn., to pass the Internet gambling ban.
“We talked to members who had a pretty good record on free trade, and most of them didn’t understand the implications of this Internet gambling ban,” Mendel said.
The group did not visit any lawmakers from Nevada, he said.
Although many Internet gambling companies are panicking in the wake of the ban, Mendel predicted the prohibition will have little effect.
“We have (Internet gambling) service providers in Antigua who have been consumer-complaint free for 10 years now,” Mendel said. “Gamblers think those businesses offer a better deal than Las Vegas or a corner bookie.”