Why does the online I94 form require VWP applicants to buy ESTA?

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Unfortunately that's how the CBP website is setup at the moment - they expect you to have an ESTA by default, even though its not required for land crossings. Short of complaining to CBP and asking them to modify the website, there's not much you can do.

However do note that their online form doesn't end up saving much time for you in practice as per Would I save much time by applying for an I-94 online before arriving to a land border?

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