Anthony L. Hall is a descendant of the Turks & Caicos Islands, international lawyer and political consultant - headquartered in Washington DC - who publishes his own Internet Weblog at www.theipinionsjournal.com offering commentaries on current events from a Caribbean perspective

Yet, despite my admonition that looking to the WTO to get the Americans to comply with this directive is futile, the Antiguans continue to do so; taking fools comfort in one hollow, if not pyrrhic, WTO ruling after another.  (Only countries with retaliatory economic power -- to place punitive tariffs on imported goods, for example -- have any chance of enforcing such rulings.)

For years now, the U.S. has telegraphed that it has no intention of complying with WTO rulings on Internet gambling. Indeed, its response to the first significant ruling against it in this regard was to arrest and prosecute Jay Cohen, an American citizen, for operating the online gaming company World Sports Exchange out of Antigua.   This is despite Cohen’s activities being not only legal but actually licensed by the Antiguan government.

Therefore, even if merely coincidental, one might consider it a preemptive snub that U.S. authorities arrested David Carruthers on Sunday just days before another WTO ruling on Wednesday, which promises, yet again, to vindicate Antigua’s claims against the U.S.  Nevertheless, the Curruthers arrest is instructive.

He is the CEO of BETonSPORTS (Betonsports), the oldest and biggest online gaming group in the world - with headquarters in Costa Rica and back-office operations in, voila!, Antigua. But, in a sting worthy of Butch Cassidy and the Sundance Kid, the FBI snagged Curruthers at the Dallas-Fort Worth International Airport as he awaited a connecting flight en route from the UK to Costa Rica.  And, almost simultaneously, they arrested four other people pursuant to a 22-count indictment, unsealed on Monday, which charges 11 people and four companies, including Betonsports, with conspiracy, racketeering and wire fraud for taking bets on sports from people residing in the U.S. and failing to pay taxes.

To give a sense of the kind of money involved here, consider that:

“In the fiscal year ended Feb. 5, Betonsports reported a 65 percent gain in operating profit on continuing operations to $20.1 million. The company said it handled $1.77 billion worth of bets for the year, up 25 percent.”

Notwithstanding such profitable operations (all ostensibly outside U.S. jurisdiction) and the WTO declaring them legal under international trade rules, news of these arrests caused trading in shares of Betonsports to be suspended on Monday in London and elsewhere.

But what is truly forbidding about these developments is that Curruthers is NOT a U.S. citizen. Moreover, like Cohen, he was engaged in international business activities that were declared legal by the WTO and sanctioned by a host of sovereign countries.

Yet his company was forced to cease operations because a U.S. federal judge ordered it to stop accepting bets from customers within the United States.  In fact, on Tuesday night, Betonsports shut down its website, indefinitely.

Clearly, this extraterritorial reach of U.S. jurisdiction -- to regulate and control online gaming -- has grave legal and financial ramifications for the entire industry, which generates half of its $12 billion annual revenue from U.S. residents.  After all, if the U.S. can cause Betonsports -- the biggest fish in this pond -- to go under, then all other online gaming companies, relative minnows, must feel doomed to drown.

And, if the fate of Betonsports were not suffocating enough, what little chance online gaming in the Americas had of surviving was effectively squashed on June 11 when the U.S. Congress voted overwhelmingly to pass “The Internet Gambling Prohibition and Enforcement Act.”  Because this Act will ban not only sports betting but all Internet gambling.  Indeed, in explaining its intent, the bill’s sponsor, Rep. Jim Leach (R-Iowa), said that he regards the Internet as “Crack Cocaine for Gamblers”.  One should infer, therefore, that he thinks Internet gambling must be interdicted and prosecuted just as the government interdicts and prosecutes drug trafficking.

Never mind that this Congressional Act reeks of hypocrisy: banning, as it does, online gambling whilst allowing Casino and other forms of (offline) gambling to flourish.  But two words can explain this hypocrisy:  Christian fundamentalism.

After all, there’s a cabal of Christian zealots in the U.S. Congress who regard all forms of gambling, including state lotteries, as an abomination against God.  However, they are resigned to the fact that the political lobby for offline gambling in the U.S. is simply too formidable to even challenge.  But since these Christians and offline-gambling operators both see online gambling as a mortal sin / threat, they have struck a Faustian common cause to ban it (in the name of God and the Almighty dollar).

NOTE:  Because members of Congress opposed to online gaming are so religiously motivated, they are impervious to the reasonable argument that it makes far more sense to tax and regulate this lucrative global business than to ban it.  Therefore, it behooves online gaming operators around the world -- who continue to take bets from U.S. residents -- to be mindful that it does not take being caught in an FBI sting (on U.S. soil) to  be adversely affected by U.S. laws.  Since international banking laws are such that, if the Justice Department and IRS target any of them, they could disrupt dealings with banks and credit card companies to make it impossible to conduct business.

Therefore, I urge online gaming operators to limit their customer base to people outside the U.S.  Because freedom and a market share of an industry valued at only $6 billion is clearly preferable to ending up like Cohen, Curruthers and others now in hiding….