Place your bets

The federal government's pleasure-hating crusade against online gambling lost big in a major decision (PDF file) by the World Trade Organization released Friday. It was a follow-up decision to one issued in 2005 that found U.S. law to be impermissibly discriminatory towards non-U.S. online gambling companies since the American ban on Internet gambling allows exceptions for placing wagers on horse races through U.S. companies. The government of the tiny nation of Antigua brought suit, arguing that the U.S. was dragging its heels on complying with the earlier decision.

Specifically, the WTO slapped U.S. representatives for pointing to the same three laws rejected by the earlier panel as evidence that that the U.S. was treating gambling companies consistently and complying with the 2005 ruling. The U.S. argument basically boiled down to a claim that the 2005 panel was wrong in its decision. That argument didn't fly with the WTO. Said the panel:

There has been no change to any of these three measures since the original proceeding. There has been no change in the application of these three measures, or even their interpretation, since the original proceeding. There is no evidence of any changes in the factual or legal background bearing on these measures or their effects since the original proceeding that might have brought them into compliance. This indicates that they remain inconsistent with the United States' obligations under the GATS.

In its findings, the WTO also slammed the U.S. not just for continuing to discriminate against foreign gambling companies, but also for leaking confidential information about the proceedings to the press -- and then insinuating that the WTO was the source of the leaks.

Basically, the case went as badly for the U.S. as possible.

Unfortunately, it's unlikely that the federal government will step back from its restrictive regulations in order to comply with the ruling. More likely, the feds will further restrict domestic wagering operations -- or ignore the ruling completely.

Still, a decision like this has some currency on the international scene. According to MSNBC, "Stock prices of online gambling companies, including PartyGaming, headquartered in Gibraltar, jumped sharply after the decision."

Domestic gamblers should rest assured that their favorite overseas gambling sites aren't going away anytime soon.