US seeks to clarify ban on online gambling

The US will use a World Trade Organization procedure to clarify its ban on online gambling, a government official, quoted by an Associated Press report said.

The Associated Press report also said this is in response to the threat of trading members seeking payment for lost revenue.

The report further said many companies say they were caught off-guard when President Bush signed a measure into law in October, prohibiting US banks and credit card companies from processing payments to online gambling businesses outside the country.

The ban prompted companies, such as Sportingbet and Leisure & Gaming, to sell their US operations, the report said.

The $12 billion Internet gambling industry is based outside the US, mostly in Britain, although half of its customers live in the USA, the Associated Press report said.

A WTO panel opened the door in March to commercial sanctions against the US, ruling that the new law unfairly targets offshore casinos, the report said.

The twin island nation of Antigua and Barbuda in the Caribbean, for example, argues that online gambling had been providing income for hundreds of its citizens, the report said.

The Geneva-based global trade referee said Washington could restrict online gambling as long as the restrictions apply equally to US companies offering offshore betting on horse racing, the report further said.