WTO Ruling on US Wire Act
US legislators passed the Wire Act which prohibits bank institutions from engaging
in wire transfers related to onsite betting or gambling. The response from banks? Most
financial institutions and other search engines, which were previously engaged in such
activities, effectively shut down the system for US-based gamers and enthusiasts. This
has resulted to a series of debates and discussions.
Difficulties in Passing the Act
Admittedly, online gaming and gambling suffered significantly from this legislation,
but it did not stop the operations of the industry in other countries where the system
is still considered legal. Also, most Internet-based casinos accept other modes of
payment aside from credit cards for players to be able to join and play in the games.
The US Department of Justice decided to ask the World Trade Organization on this
law by asking their assistance to get other foreign governments to follow suit, especially
Antigua and Barbuda where online gambling is thought of as a legally-accepted industry.
US also mentioned that regulating the industry will be difficult because the main focus
why this should be regulated by the law was on five risks: compulsive gambling, money
laundering, gambling for minors, fraud, and possibility of crime involvement - five
aspects that are innate in humans.
In response to this, both foreign countries of Antigua and Barbuda countered that
the US policy on foreign trade does not say anything about cross-border online casinos
and betting. In addition, the US government appeared to be a hypocrite by allowing
the operation of land-based and online-based casinos overseas.
Here is how the World Trade Organization responded to this conflict. They found no
legal ground to prohibit online gambling and betting in relation to the global trade
agreements. What this ruling indicates is that the US will have to regulate instead
of prohibit online gambling and betting. The companies engaged in this industry will
have to come up with guards against the five risks enumerated by the US legislation
to be able to do business with US citizens. Key actions to address this payment options
are made available.
World Trade Organization has made its stand clear: Gambling and betting at licensed
Internet-based casinos and sports websites are legal.
Instead of fighting the industry, what the US government should do is work towards
providing regulations. Working on taxation laws and processes for the Internet-based
gambling companies should be addressed while taking into consideration a work around
on the risks identified in association to it. Solutions should be the key to responding
to this industry to create a balance.