Sides Split Betting-Rule Pot

By Richard Wilner

April 8, 2005 -- The U.S. is heading for a showdown today over online casino gambling.

Tom Ramsey, who runs Matchbook.com, an online casino in Antigua, said a partial victory yesterday over the U.S. in a crucial trade battle opens the door for him to advertise his business in the States.

"I'm going to pick up the phone [today] and call ESPN and Clear Channel and buy $1 million worth of advertising," Ramsey said after the World Trade Organization gave Antigua a partial win in its eight-year-old battle to break into the U.S. market.

Media outlets are barred from accepting advertising from offshore casinos. The Department of Justice has threatened them – and credit-card companies – with prosecution if they accept money from the betting parlors.

Clear Channel said it would not accept Ramsey's $1 million offer. ESPN was likely to follow suit.

But Ramsey's move is likely to set off action both in the White House and in Congress over how to handle the hot potato that online gambling has become.

The WTO found the U.S. had the right to bar offshore casinos from taking bets from Americans in the U.S. because the country had the right to protect against organized crime and money laundering.

However, the WTO found the U.S. laws unfairly barred foreign competition as some states allowed online horserace gambling.

The WTO said the U.S. must correct the inequity if it wanted to keep the casinos out.