U.S. ban on online gambling payments is illegal

The U.S. ban on offshore Internet gambling payments is illegal, the World Trade Organization said today, upholding a previous decision that allowed for possible sanctions. Shares of online gambling sites including PartyGaming Plc rose after the WTO said the U.S. ignored its previous ruling that challenged the U.S. ban on payments to gaming Web sites while allowing bets on its own soil. Antigua and Barbuda, a Caribbean nation of 80,000 people, has challenged Bush administration efforts to close the estimated $12 billion global business to U.S. residents, who account for half of the market. The U.S. banned credit card companies from processing payments to betting sites such as SportingBet, Leisure & Gaming Plc, PartyGaming and Empire Online Ltd., which then ceased U.S. operations or sold them for nominal amounts. PartyGaming shares, which jumped as much as 16 percent after the decision, rose 1.75 pence, or 3.5 percent, to 51.75 pence in trading on the London Stock Exchange. Shares of SportingBet Plc, which said this week it plans to transfer its London offices to the Channel Islands because of U.K. regulation, rose 1.5 pence to 66.75 pence. Antigua Victory Antigua, the smallest government ever to lodge a WTO complaint, scored an initial victory against U.S. online gambling restrictions when the WTO found in April 2005 that the U.S. had pledged to open the industry to competition 10 years earlier. Today’s ruling rejects a U.S. appeal against that. The U.S. agreed that today’s ruling finds it failed to comply with the two-year-old decision. Still, the U.S. says the report allows it to maintain a ban on Internet gambling to protect public order and public morals” as long as it doesn’t discriminate against foreign companies….(U.S. Trade Representative’s office in Washington, said we are currently reviewing our options). At the time, U.K. Culture Secretary Tessa Jowell compared the U.S. law to the American alcohol ban of the 1920s, saying the measure may force online gambling underground into an unregulated black market. The reporter on this story: Warren Giles ([email protected])

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