The World Trade Organization (WTO) is an international body that sets and enforces rules governing trading in goods. In the 1990s, online gambling began to grow as a popular way for people to place wagers and win cash. It seemed that online gambling offered an end-run around government regulations because online casinos could be located in any country in the world, and anyone with a web browser could find them and place wagers on their sites. Although lawmakers and the Department of Justice tried to regulate online gambling, their efforts were ultimately unsuccessful.
The online gambling industry is growing at a tremendous pace. According to a Harris poll, nearly 2% of Americans play poker online every month, and nearly 1% gamble online at least once a year. However, the U.S. Department of Justice estimates that online casinos have grown by more than four-fold since the beginning of the decade. Even though it is still a small sector of the gambling industry, the growth rate is phenomenal. In 1997, there were only fifty to sixty Internet casinos operating in the Caribbean, earning $300 million to $350 million in annual revenue. By 2000, there were an estimated 700 online casino sites.
While the U.S. government treats online gambling as a vice, many people who do not gamble online suffer the consequences of gambling. The high costs of lawsuits against online gambling sites are passed onto credit card companies, which in turn increase their interest rates. Additionally, taxpayer money is used to fund lawsuits against online gambling sites. And while no state receives licensing fees from online casinos, these governments must spend millions of dollars on treatment and research for pathological gamblers.
There is also a high risk of money laundering from online casinos. Online gambling is a prime target for criminals, and the coding system for credit cards does not distinguish between legitimate and illegal transactions. The coding system, which was originally intended to prevent fraudulent transactions, has also been abused by unscrupulous merchants. In order to avoid such consequences, it is vital that consumers know about the risks involved with online gambling. If you’re unsure of how to play the game, don’t use your credit card.
While the new law prohibits sending money to payment processors that deal exclusively with casinos, the new law is less clear. This law doesn’t apply to privately owned payment processors, which are often located abroad. The WTO ruling may be used as a defense in Carruthers’ case, which is currently pending. The European Union is considering filing a complaint with the WTO. They believe the United States treats foreign businesses like criminals.
While online sports betting and casino gambling are clearly legal in many states, others prohibit this activity altogether. While some states regulate online gambling activities in general, some state laws specifically prohibit the use of gambling devices, including personal computers that connect to the Internet. It is important to check with your state’s laws before placing a wager, as well as with the federal government to ensure that you do not break the law. If you’re not sure, visit the website of the State Department of Gaming and Consumer Protection (State) to learn more.