Deseret News (Salt Lake City): Utah joins protest of gambling decision

WASHINGTON -- In the wake of a World Trade Organization decision that throws into doubt Utah's ban on Internet gambling, Utah Attorney General Mark Shurtleff and 28 other attorneys general have written a letter to U.S. Trade Representative Rob Portman calling for a greater states' voice in future trade talks.

"Antigua has no business trying to write Utah's gambling laws," Shurtleff said Tuesday. "The Trade Representative needs to know that we have too much at stake to remain silent."

The World Trade Organization ruled earlier this year in a case brought by the tiny island nation of Antigua that the United States cannot block other countries from offering Internet gambling to U.S. residents, even if they live in states like Utah and Hawaii where gambling is illegal.

Antigua went to the WTO claiming the Americans were in violation of a trade agreement where the United States had in 1993 signed off on cross-border supply of gambling and betting services. And Utah's prohibition against gambling was a central part of Antigua's argument.

A WTO dispute panel ruled last November that the Antiguans were correct. And under terms of an international trade agreement, Utah could now find itself legally defenseless to stop Internet gaming within its borders.

Shurtleff and Vermont Attorney General William Sorrell solicited the other attorneys general to sign the letter requesting more dialogue with Portman on trade issues, especially when they affect state rights.

The letter says the trade representative should have done more to stop the World Trade Organization from ruling that gambling should be treated like "other recreational services."

The attorneys general are urging Portman to withdraw gambling from the trade agreement. They say the trade organization could ultimately stop all gambling regulations involving casinos, slot machines, state monopoly lotteries and Indian gaming rights.

Shurtleff said the ruling could also hamper a state's ability to regulate advertising, Internet spam and even zoning laws.

"We believe that under our constitutional system of federalism, states should continue to have the flexibility and sovereign authority to determine whether and under what conditions gambling occurs within their borders, without such decisions being second- guessed by WTO tribunals," Shurtleff wrote.

If there is a silver lining to the WTO ruling, it is that a clerical error by attorneys for Antigua failed to spell out Utah's law in the legal paperwork. So the WTO refused to rule directly on the Utah law, even though it left open the possibility that Utah's prohibition could be wrapped into the larger WTO ruling.

The WTO decision, in general terms, means that laws used by particular states to limit or forbid Internet gambling are seen as a violation of "market access" principles of the WTO's General Agreement on Trade in Services.

"In trade-speak, Utah's prohibition amounts to the use of a zero- quota on the supply of Internet gambling services, and that's a violation of market access," said Peter Riggs, director of the Forum on Democracy and Trade, in an interview with the Deseret Morning News earlier this year.

Another part of the GATS agreement, one not raised by Antigua's legal argument over Internet gaming, indicates the United States also made commitments to a "commercial presence."

"It's that commercial presence category which would allow foreign gambling companies to argue that they have a right to establish casinos," Riggs said.

And it is that possibility that has attorneys general across the nation, including some from gaming states like Nevada and Louisiana, worried that state laws and state regulatory authority will be shelved by international law.

The letter was signed by the attorneys general of Arizona, Arkansas, California, Connecticut, Delaware, Hawaii, Idaho, Iowa, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nevada, New Mexico, New York, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Vermont, Utah, Washington, Wisconsin and Wyoming.

E-mail: spang@desnews.com