by Matt Ricthel
The New York Times
<!--StartFragment -->
Reversing a four-year-old policy, the Isle of Man is now allowing Internet casinos based there to accept bets from American residents. The change, while affecting only a handful of Internet casinos, adds a wrinkle to an emerging trade battle between the United States and much of the world over Internet gambling.
Washington says that U.S. laws prohibit Internet gambling, and some U.S. states have been pursuing financial institutions that facilitate online gambling transactions.
The decision by the Isle of Man comes amid a trade dispute over Internet gambling between the United States and the tiny Caribbean country of Antigua and Barbuda. The island nation has complained to the World Trade Organization that Washington is violating its trade obligations by prohibiting its residents from placing wagers over the Internet.
The WTO issued a preliminary ruling in November in favor of Antigua and Barbuda. The United States filed a formal notice of appeal last Friday, asserting that the country's long-standing trade policy and social mores are consistent with its prohibition against online gaming.
Despite the prohibition, Americans wager more online each year than do residents of any other single country. Around the world, online casinos and the jurisdictions that license them are eager for the U.S. business.
The Isle of Man said that as of Jan. 1, it would be allowing casinos based there to take bets from Americans. The island, located between Britain and Ireland, is a so-called Crown Dependency, meaning that it makes its own domestic laws but relies on Britain for defense and foreign policy.
The policy reversal is significant because the Isle of Man, which first started licensing Internet casinos in 2001, initially sought to attract blue-chip gambling operations by defining itself as a jurisdiction offering rigorous regulation.
Initially, that policy seemed to pay off, as some of the world's largest gambling operations, including MGM Mirage, purchased expensive licenses to operate online casinos there. But business was not as brisk as expected and six major casinos, including MGM, have relocated from the Isle of Man or closed their Internet operations altogether.
In December, the island's Council of Ministers voted to reverse the policy discouraging online casinos located there from accepting bets from the United States. Tim Craine, the head of e-business for the Isle of Man, said that the island felt the policy change would help attract new casinos, and the licensing and tax revenue they provide.
"There's a lot of business looking to relocate to a reputable, regulated jurisdiction," he said, noting that in particular, numerous poker rooms are looking for a new jurisdiction. "We're hoping to capitalize on that business," he said.
Craine said that the policy change affected only wagers placed on casino games and in poker games. The island still discourages casinos located there from accepting sports bets placed from the United States. He said the island made that distinction because it believes that U.S. law prohibits sports betting online, but not casino wagering.
But U.S. prosecutors have said they believe casino games also are prohibited under federal law; in either case, numerous state laws expressly prohibit any gambling operations in the state that the state's Legislature has not expressly authorized.
The United States must file its first brief in the appeal on Friday, and the WTO has 90 days from the appeal notice last Friday to issue a decision in the case.
Last year, some $7.6 billion was lost in wagers over the Internet, according to industry analysts. The analysts said about half that amount was lost by residents of the United States, a disproportionate sum attributable in part to the relatively high percentage of Americans who have Internet access.
Numerous countries, including Britain, license and regulate online casinos. The level of regulation differs widely from country to country, with some countries enforcing more rigorous regulations as a way of helping the casinos that locate there to establish an identity as a reputable casino.
The policies of those countries also differ as to whether they accept bets from Americans.
What they have in common, though, is a desire to attract more Internet casinos, industry analysts and executives said.
</PRE>
The New York Times
<!--StartFragment -->
Reversing a four-year-old policy, the Isle of Man is now allowing Internet casinos based there to accept bets from American residents. The change, while affecting only a handful of Internet casinos, adds a wrinkle to an emerging trade battle between the United States and much of the world over Internet gambling.
Washington says that U.S. laws prohibit Internet gambling, and some U.S. states have been pursuing financial institutions that facilitate online gambling transactions.
The decision by the Isle of Man comes amid a trade dispute over Internet gambling between the United States and the tiny Caribbean country of Antigua and Barbuda. The island nation has complained to the World Trade Organization that Washington is violating its trade obligations by prohibiting its residents from placing wagers over the Internet.
The WTO issued a preliminary ruling in November in favor of Antigua and Barbuda. The United States filed a formal notice of appeal last Friday, asserting that the country's long-standing trade policy and social mores are consistent with its prohibition against online gaming.
Despite the prohibition, Americans wager more online each year than do residents of any other single country. Around the world, online casinos and the jurisdictions that license them are eager for the U.S. business.
The Isle of Man said that as of Jan. 1, it would be allowing casinos based there to take bets from Americans. The island, located between Britain and Ireland, is a so-called Crown Dependency, meaning that it makes its own domestic laws but relies on Britain for defense and foreign policy.
The policy reversal is significant because the Isle of Man, which first started licensing Internet casinos in 2001, initially sought to attract blue-chip gambling operations by defining itself as a jurisdiction offering rigorous regulation.
Initially, that policy seemed to pay off, as some of the world's largest gambling operations, including MGM Mirage, purchased expensive licenses to operate online casinos there. But business was not as brisk as expected and six major casinos, including MGM, have relocated from the Isle of Man or closed their Internet operations altogether.
In December, the island's Council of Ministers voted to reverse the policy discouraging online casinos located there from accepting bets from the United States. Tim Craine, the head of e-business for the Isle of Man, said that the island felt the policy change would help attract new casinos, and the licensing and tax revenue they provide.
"There's a lot of business looking to relocate to a reputable, regulated jurisdiction," he said, noting that in particular, numerous poker rooms are looking for a new jurisdiction. "We're hoping to capitalize on that business," he said.
Craine said that the policy change affected only wagers placed on casino games and in poker games. The island still discourages casinos located there from accepting sports bets placed from the United States. He said the island made that distinction because it believes that U.S. law prohibits sports betting online, but not casino wagering.
But U.S. prosecutors have said they believe casino games also are prohibited under federal law; in either case, numerous state laws expressly prohibit any gambling operations in the state that the state's Legislature has not expressly authorized.
The United States must file its first brief in the appeal on Friday, and the WTO has 90 days from the appeal notice last Friday to issue a decision in the case.
Last year, some $7.6 billion was lost in wagers over the Internet, according to industry analysts. The analysts said about half that amount was lost by residents of the United States, a disproportionate sum attributable in part to the relatively high percentage of Americans who have Internet access.
Numerous countries, including Britain, license and regulate online casinos. The level of regulation differs widely from country to country, with some countries enforcing more rigorous regulations as a way of helping the casinos that locate there to establish an identity as a reputable casino.
The policies of those countries also differ as to whether they accept bets from Americans.
What they have in common, though, is a desire to attract more Internet casinos, industry analysts and executives said.
</PRE>
