Avioli Calls for Federal Authorization of Internet Gambling

There are many scenarios for how the United States government will respond to the World Trade Organization's April ruling in which U.S. laws on remote gambling were considered in violation of WTO commitments based on a dispute between the U.S. and Antigua over cross-boarder betting.

The best long term solution or response would be for the U.S. government to authorize and regulate Internet gambling, according to Greg Avioli, executive vice president for legislation and corporate planning for the National Thoroughbred Racing Association.

The WTO has issued a deadline of April 3, 2006 for the U.S. government to comply with its WTO commitments.

Avioli outlined possible responses for the U.S. government Wednesday in a panel discussion on international and interstate commerce issues for racing at the Symposium on Racing and Gaming being held at the Loews Ventana Canyon Resort this week near Tucson, Ariz.

"I don't know what the U.S. is going to do," Avioli said after putting the options on the table. "But what we're going to do--the NTRA on behalf of horse racing--is make sure we preserve that right of Internet gambling on horse racing because it's our fastest form of revenue growth."

Avioli said that of the $15 billion expected to be wagered on horse racing his year, $2 billion will be wagered over the Internet.

The first option for the United States in dealing with a situation Avioli called a "quandary" is to amend the Interstate Horse Racing Act of 1978 and make it legal to bet on horse racing on the Internet. The IHA was amended in 2000 to protect various forms of account wagering, but the U.S. Justice Department has maintained the IHA didn't authorize Internet wagering. Avioli did not support the option of amending the IHRA.

Option two, he said is to change federal law and make a new law that would permit Internet gambling with offshore entities. Avioli said this option is unlikely considering the current conservative U.S. Congress.

The third option would be to simply do nothing, but this option comes at a cost, Avioli said. He explained if the U.S. is silent then Antigua could pass trade sanctions on the U.S.

"I feel fairly certain that April is going to come and go and the U.S. will have not done anything in this area and Antigua is either going to issue trade sanctions with the U.S. or negotiate hopefully some other form of economic improvement," Avioli said.

Panelist Mark Mendel, the attorney who represented Antigua to the WTO, said Antigua wants to work with the United States and become a world leader in responsible gaming.

"I don't know that much about horse racing but I do see an opportunity for horse racing in Antigua based upon this (WTO) decision," Mendel said.

"I think there is considerable interest form the Antigua government and Antigua operators to work with the horse racing industry to develop an offshore market that can be of access to literally millions of consumers that the horse racing industry doesn't have access to today," Mendel continued.

He said he sees the current situation as advantageous for building a cooperative relationship between Antigua and the U.S., where the U.S. companies and racetracks get something in return.

Avioli called the situation "bloody complicated."

Avioli said a fourth option for the U.S. is to withdraw its agreement with the WTO, acknowledging the U.S. never intended on joining the WTO General Agreement on Trade in Services (GATS). But withdrawal would come with a high pay-back cost, Avioli explained, because "if you take a way a good or a service you joined the WTO for, then you have to give back a good or service of equal value or you have to pay reparations to every country that is a member of GATs that can claim they've been harmed as a result of taking away that service."

The fifth option is for the U.S. to reach a settlement with Antigua, but that would only be a short-term solution, Avioli said. He concluded, "I think we both (he and Mendel) agree the long-term solution should be for the U.S. Government to authorize and regulate Internet gambling."