Nov 10, 2004: In a ruling that could open the United States to offshore Internet gambling, a World Trade Organization panel that met Nov. 10 in Switzerland said Congress should drop prohibitions on Americans who place bets through online casinos. In its final 287-page report, the WTO panel confirmed the preliminary ruling it issued in March in a dispute that pits the U.S. against Antigua and Barbuda in the Caribbean. The report says the ban represents an unfair trade barrier. Richard Mills, a spokesman for U.S. Trade Representative Robert Zoellick, called the report deeply flawed and said the U.S. would vigorously contest the ruling before the WTO seven-member appeals body.
"This ruling is not unexpected," National Thoroughbred Racing Association deputy commissioner Greg Avioli, the organization's point man in Washington, D.C., said in a prepared statement. "We have had discussions with the Office of the U.S. Trade Representative, and understand they intend to file an appeal very quickly. We agree with the U.S. trade representatives that the decision is incorrect with respect to the facts and to the law.
"The WTO's ruling, if upheld, could establish the precedent for any offshore operator to accept wagers from U.S. residents without regard to state or federal gaming law, with no regulatory oversight and with no tax revenues being returned to the U.S. We will work with all relevant U.S. and international agencies including, the International Federation of Horseracing Authorities, to address the significant issues for Internet wagering that are posed by the ruling." The U.S. has 60 days to file an appeal to WTO trade judges, who then must issue a final ruling within three months.
287 page Ruling Click here.

Nov 6, 2004: DOJ Defends Crackdown on Internet Gambling
A Greenberg Traurig lawyer in Fort Lauderdale has sued the U.S. Department of Justice on First Amendment grounds to force the feds to back off their crackdown on Internet-based gambling. Patrick O'Brien, a Greenberg partner, filed suit in U.S. District Court in Louisiana, alleging that the Justice Department's crackdown on Internet gambling advertising violates the free speech rights of his client, Massachusetts-based Casino City Inc.
In its motion to dismiss filed last week, the Justice Department claimed that Casino City was not under threat of prosecution.On the freedom of speech issue, government lawyers argued that "advertisements that concern unlawful activity" are not protected by the First Amendment. O'Brien and co-counsel Richard have not yet responded to the Justice Department's motion.

Oct 10, 2004: The United States Congress has passed the international tax bill, the FSC/ETI Bill, and sent it to the President for his signature. The President has indicated that he will sign the legislation. As reported earlier, the bill includes the provision supported by the racing industry to clarify that the 30 percent alien withholding provision does not apply to nonresident aliens in foreign countries wagering on U.S. races through international pools. This is a significant victory for U.S racing and eliminates an obstacle to the initiation of world-wide betting pools on U.S. races.

The last congressional action on Internet gambling occurred more than a year ago, when the Senate Banking Committee voted 19-0 on July 31, 2003, to approve restrictions proposed by Sen. Jon Kyl, R-Ariz.
Kyl has spearheaded efforts to crack down on Internet gambling since 1996, and an aide said he may try again next year.
Congress appeared to have plenty of time to get a bill curtailing Internet gambling to President Bush. The House voted 319-104 on June 10, 2003, to outlaw the use of credit cards, checks and other bank instruments to pay for Internet bets.
The original version of Kyl's legislation was similar to the House bill. But the Senate Banking Committee wanted to prevent states from authorizing online wagers within their borders. That drew opposition from the American Gaming Association, which complained the Kyl bill would favor Indian casinos and the pari-mutuel industry over mainstream casinos.
Rep. John Conyers, D-Mich., proposed a bill on March 12, 2003, to create a federal commission to study licensing and regulating companies taking bets online.
But the measure attracted only three co-sponsors, including Rep. Shelley Berkley, D-Nev. It has to be reintroduced in the new Congress next year to stay alive.

Oct 1, 2004: This week's passage of H.R. 5011 by the House Financial Services Committee.
Oxley succeeds with internet gambling clause from the Unlawful Internet Gambling Funding Prohibition Act (HR 2143 )in 9/11 Bill
Many of the bill's goals are laudable -- particularly provisions to protect military personnel from bad financial sales practices, and to address a number of issues relating to terrorism and the 9/11 Commission's recommendations. The bill, however, also contains a provision inserted by Alabama Representative Spencer Bachus to bar US citizens from using credit cards to place bets on online gambling sites. When the millions of American consumers who place bets online are unable to use their credit cards to do so, they are forced to use other financial tools, most of which are significantly less transparent than credit card transactions.
If passed into law, the legislation "would bar Internet gambling sites access to the U.S. financial services system by preventing the use of credit cards, wire transfers, or any other bank instruments to fund illegal Internet gaming transactions", according to a committee press release.
Apparently the committee that passed the legislation heard testimony from the FBI that said, "Internet gambling is vulnerable for use in terrorist financing schemes". This latest move to prevent Americans from gambling on the Web comes after anti-Internet gambling bills were passed in both the House of Representatives and in a Senate committee last year.
Thanks to the lobbying efforts by the horseracing industry, the government's gambling legislation would ban sports betting on the Internet, with the exception of horseracing.

Sept 24, 2004: The U.S. Department of Justice is making it very clear to publishers that it will prosecute those who publish advertising for offshore gambling. Its attention has been drawn by recently published ads for betonsports.com. This is the section of the federal criminal code that applies to gambling information:
(a) Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both.
(b) Nothing in this section shall be construed to prevent the transmission in interstate or foreign commerce of information for use in news reporting of sporting events or contests, or for the transmission of information assisting in the placing of bets or wagers on a sporting event or contest from a State or foreign country where betting on that sporting event or contest is legal into a State or foreign country in which such betting is legal.
Reference: Click here
The Justice Department has said that anyone who aids and abets offshore betting will be prosecuted as a principal. A principal is defined as:
(a) Whoever commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable