Sportingbet bullish as WTO orders US to open market

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The Independent Online

British online betting companies have won a major boost in the fight for legitimate access to the US, the biggest gambling market in the world, after the World Trade Organisation (WTO) told Washington to open up to overseas internet gambling operators.

British online betting companies have won a major boost in the fight for legitimate access to the US, the biggest gambling market in the world, after the World Trade Organisation (WTO) told Washington to open up to overseas internet gambling operators.

A WTO tribunal body has ruled the US is in breach of international trade agreements by banning foreign companies from taking bets from US citizens. The tiny Caribbean island of Antigua, one of the smallest nations in the WTO, secured the landmark ruling after challenging the US on the issue.

In a David-and-Goliath struggle spanning three years, the US had tried to block Antigua's burgeoning internet gambling industry from doing business with US customers, stopping US banks from carrying out transactions with Antiguan gambling firms and internet search engines from listing them.

Sportingbet, the online gambling company that takes bets from US citizens, welcomed the WTO ruling as a positive step in the path to legitimise the billion-dollar internet gaming industry because the current laws are unclear.

Nigel Payne, the chief executive of the group, said: "The WTO has said, without any shadow of a doubt, that the US is in violation of trade agreements."

As part of the ruling, however, the US was granted leeway to maintain its ban on overseas internet gambling if it can prove its claims that the activity damages public morals. But as the US does allow some domestic internet betting, particularly on horse racing, it was criticised by the WTO for having double standards. James Wheatcroft, of Investec Securities, said the US must now either ban all internet gambling within its own borders or allow foreign companies to enter the market on an equal footing. "The US has now been put on notice to set up a proper framework for regulating internet gambling," he said.

Had the WTO ruled against Antigua, new UK laws on internet gambling would have been thrown into doubt. The new Gambling Bill, which gained Royal Assent yesterday, does permit UK companies to take bets from US citizens. The US may have challenged this if the WTO had agreed with its prohibitive stance.

Shares in Sportingbet rose 4 per cent on the news that the US will continue to fight against internet gaming for some time. Andrew Lee, of Dresdner Kleinwort Wasserstein, said: "It is unlikely that there will be any change overnight. Sportingbet can keep its competitive advantage in the US for the time being. Once a properly regulated environment comes along, companies like Yahoo and Microsoft will flood into the market."

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