Online gaming may recruit Costa Rica in its U.S. push

More problematic, Riggs said, is CAFTA, which is now being debated in the Senate. There is no morals exception in CAFTA.

But there is a provision calling for "investor protections" that allows private companies to bring actions against governments if they believe regulations impede their businesses or they are being treated unfairly.

The U.S. trade representative's CAFTA briefing book does not appear to address gambling specifically, but it does state that panels convened to resolve trade disputes have no authority to change U.S. laws or require the states to change their laws.

"CAFTA does not in any way pre-empt or invalidate federal, state or local laws that may be inconsistent with the agreement," the book states, adding that CAFTA "rules do not automatically override any domestic laws."

With Internet gaming booming in Costa Rica, Riggs said it is inevitable that the multibillion-dollar international industry will exploit the fact the WTO safeguards are not in the agreement. And the industry, not Costa Rica, will challenge the legality of any attempts to regulate online gaming.

Senate action

On Wednesday, the Senate Finance Committee approved CAFTA but not without some reservations from Hatch about any trade agreement that impedes a state's self-determination.

"I have become increasingly concerned that greater opportunities for consultations need to be provided to the states during the consideration of free-trade agreements," said Hatch, who supports the agreement but is worried about the WTO ruling "that indicated that the United States cannot block other countries from offering Internet gambling to U.S. residents, even if they live in states, such as Utah, where gambling is illegal."

"I am greatly relieved, though, that the Office of the U.S. Trade Representative has interpreted the language in the WTO decision stating that gaming laws are 'necessary to protect public morals or to maintain public order' to mean that 'WTO members are entitled to maintain restrictions on Internet gaming' and U.S. restrictions on Internet gambling can stand," Hatch said.

Hatch's comments were sparked by a letter signed by 28 state attorneys general, including Utah's Mark Shurtleff, requesting greater consultation between the U.S. trade representative and the states on all issues affecting states' rights.

"We must remain vigilant and ensure that sovereignty not only of our nation but our states is maintained," Hatch said.

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E-mail: spang@desnews.com