|The long-awaited appellate body ruling from the World Trade Organization (“WTO”) was finally released, however some questions still remain unanswered. While both sides claimed victory, the United States was clearly the big winner here, and not for the reasons that are most apparent. The U.S. Justice Department dodged a bullet with its attempts to restrict worldwide commerce through its enforcement of the Wire Act and other federal laws, and now the feds are apparently safe to prohibit online gambling directed at U.S residents, without violating any international trade agreements. Nevertheless, this most unfavorable ruling is not the worst part of the decision. The real concern for the industry is the purported justification for approving U.S. regulation of international gambling transactions. |
In its 138-page report, the appeals panel said the United States had demonstrated that the 1961 Wire Communications Act – which was written to cover sports betting by telephone and has been used to prosecute some Web site operators – “was necessary to protect public morals or maintain public order.” However, no evidence was submitted to the WTO, indicating that online gambling interferes with public morals or impacts public order. A clarifying statement on the scope of the ruling is expected to be issued by the trade body next month.
Lawrence G. Walters, Esq., is a partner in the national law firm of Weston Garrou & DeWitt, with offices in Orlando, Los Angeles, and San Diego. Mr. Walters represents clients involved in all aspects of online gaming operations. Nothing in this article constitutes legal advice. Please contact your personal attorney with specific legal questions. Mr. Walters can be reached at Larry@LawrenceWalters.com, through his website: www.GameAttorneys.com, or via AOL Screen Name: “Webattorney.”