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.

The Resolution

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.