Last Friday, the World Trade Organization (WTO) ruled that the U.S. online gambling ban was illegal. Oddly enough, this event coincided with the news that the founder of BetOnSports was arrested in the Dominican Republic. A perfect illustration of how the U.S. and the WTO are on completely opposite sides of this issue.
So, what does this mean? Well, for the immediate future it is only a paper victory since the WTO haven't yet punished the U.S. for breaking international law. The Bush administration concedes that they have violated a previous WTO ruling, but they contend that it doesn't matter because they are simply trying to "protect public order". Whatever. They can B.S. all they want. They are just delaying the inevitable. Either the U.S. is going to have to ban all forms of gambling or drop its attempts to ban online gambling. The Bush administration will do whatever they can to delay facing this decision as long as possible, but eventually the WTO will have to penalize the U.S. for not adhering to their ruling. Once that happens, everything will change.
You see, the problem with online gambling is one of motivation. Gambling is a leisure activity. People do it for fun. While there is a small group of people that make their living off of gambling or have a gambling problem, most don't need to gamble. So, when the anti-gambling lobby managed to get an online gambling ban in the Port Security Bill last year, no one cared enough to raise a major stink. A gambling ban does not change the day-to-day lives of most Americans. Even if people disagree with the ban in principal, there is no motivation to actually do anything about it.
The reason why WTO sanctions may change everything is that it would change focus on online gambling from a moral issue to an economic one. Some heavy fines by the WTO on the U.S. could be the lightning rod that actually motivates members of congress to get behind the regulation of online gambling instead of a ban. I think this could get especially interesting as the presidential election starts heating up near the end of the year.