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IGC Agrees That U.S. States Should Regulate Gambling

13 June 2005

VANCOUVER, BC -- (PRESS RELEASE) -- The Interactive Gaming Council agrees with the Utah Attorney General and his colleagues in 27 other states that the regulation of gambling should be left up to the states. The attorneys general sent a letter last week to the U.S. Trade Representative, saying that he "should have done more to stop the World Trade Organization from ruling that gambling should be treated like 'other recreational services,' " adding that the WTO could ultimately threaten all state regulations involving gambling.

"We'd like to remind the Attorneys General, however, that maintaining the U.S. tradition of letting the states, rather than the federal government, regulate gambling cuts both ways," said Rick Smith, executive director of the IGC. "While this tradition means that Utah, for example, has the right to attempt to ban all gambling, it also means that the federal government should keep its hands off when Nevada or a U.S. territory such as the U.S. Virgin Islands tries to license and regulate online casinos, or when North Dakota tries to license and regulate online poker."

Furthermore, the IGC believes that the letter from the attorneys general demonstrates a failure to understand and appreciate the workings of international trade agreements as well as basic concepts of "globalization" and fair play.

"The U.S. vigorously appealed the decision made in November by a WTO panel," Smith said. "The WTO court considered the points handed down on appeal in its final ruling in April. I don't know what more the Trade Representative could have done to make his case. This is how the system works: A country, in this case Antigua, files a complaint, a panel spends months in deliberation, issues a decision, then either side can appeal, which both the U.S. and Antigua did, and the appeals court makes a final ruling. This is simply the workings of WTO rules, which the U.S. agreed to support.

"The attorneys generals' request that the U.S. 'withdraw gambling from the trade agreement' violates any sense of fair play. It's outrageous to suggest that after a ruling that it doesn't like, the U.S. would just say 'Oh, never mind. We're no longer including this subject in the deal.' The U.S. – its states and its companies -- has received great benefits from other WTO rulings. Suppose the losing sides in those cases just decided to retroactively exclude products such as steel or services such as banking from their commitments under the trade treaties?

"And to retroactively attempt to re-negotiate a complex treaty (GATS, the General Agreement on Trade in Services) because the U.S. doesn't like a ruling under the treaty is as impractical as it is unfair. International treaties require accountability and give and take. No country can expect to win every case."

"The IGC was not completely satisfied with the WTO's ruling on the Antigua complaint," said Keith Furlong, deputy director of the IGC. "But at least the WTO established that the GATS includes a commitment to free trade in gambling and betting services, and it further concluded that the U.S. violates GATS by permitting 'remote betting services for horse racing' only for domestic suppliers and not for foreign suppliers of such services.

"We wish state and federal officials in the U.S. would stop fighting both the international community and reality and start working constructively on regulating online gambling, just as they regulate land-based gambling. Other countries, including the United Kingdom, recognize that the logical way forward is to regulate online gambling.

"Utah and Hawaii may not have legal gambling, but the rest of the U.S. does. It's absurd that a country that has a multi-billion-dollar gambling industry continues to put its head in the sand and hope that Internet gambling will disappear.

"Progress will come when the U.S. affirms the rights of its states to regulate gambling. That means the rights of states to license and regulate Internet gambling, as well as the rights of states like Utah to attempt to ban all forms of gambling."

About the IGC

Formed in 1996, the IGC is the leading trade association for the international interactive gambling industry with its membership operating or supplying services to most of the reputable interactive sites on the World Wide Web. Based in Vancouver, Canada, the IGC champions fair and honest interactive gambling environments. To help parents protect their children, IGC members are encouraged to participate in the self-labeling system of the Internet Content Rating Association. The IGC has developed a Code of Conduct for members, and a program called Helping Hand to assist problem gamblers.

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