• Washington Post, Monday, April 2, 2007 10:15 AM

Just a day after the founder of BetOnSports LLC was arrested for facilitating illegal online gambling in the United States, the World Trade Organization hit back at the U.S. Justice Department's broader policy banning offshore companies from doing business with American citizens. Rejecting a U.S. appeal to a 2005 ruling, the WTO deemed the government's policy illegal, and said its decision to ignore the finding leaves the country open to possible sanctions. The WTO challenges the notion that Americans can gamble on U.S. soil and Native American reservations but can't accept or make payments to gambling Web sites based in foreign countries. A Bush administration spokesperson told the Washington Post the U.S. was allowed to maintain the ban to "protect public order and public morals."

Online gambling is legal for citizens in several countries across the globe--although the U.S. is its biggest market, accounting for approximately half of the $12 billion worldwide business. Last fall, the U.S. government banned credit card companies from processing payments to betting sites, a ruling that effectively closed down several online gambling companies. Since then, several top executives in the industry have been arrested.
Gary Kaplan--CEO of BetOnSports, one of the biggest--was arrested in the Dominican Republic and transferred to Puerto Rico, where he will appear before a U.S. magistrate. Kaplan was charged with 20 gambling-related felony charges. He pled not guilty.

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