Antigua And Barbuda Alarmed At US Indifference To WTO Ruling On Internet Gaming

by Leroy Baker, Tax-News.com, New York

22 February 2006

The government of Antigua and Barbuda has accused the United States of failing to comply with a World Trade Organisation ruling that its laws unfairly discriminate against remote online gaming companies, and has protested at new legislative attempts to ban offshore firms from offering services to American citizens over the internet.

A ruling by the WTO Appellate Body in April 2005 upheld one of Antigua and Barbuda's complaints over US prohibitions, which prevented US banks and major internet search engines from doing business with gambling firms on the island.

The tiny Caribbean jurisdiction, where several online gaming firms are based, had argued that by seeking to legally prevent US citizens from accessing online gambling services such as those offered by many companies in Antigua and Barbuda, the government of the United States was contradicting service sector commitments that it made when the WTO was formed in 1995.

US federal laws bar the placing of bets across state lines by electronic means, preventing Antiguan online gambling companies from accessing US customers.

Although both sides initially claimed victory based on the complex and somewhat confusing statement by the WTO, the United States has been given until April 3, 2006 to implement the ruling.

However, with little more than a month left before the deadline, the US has apparently done little to comply with the WTO decision, and in the meantime, lawmakers have renewed their attempts to prohibit Americans from using online gambling sites, a development which has alarmed the Antiguan government.

"As of today, with less than two months remaining on an 11-month and two week compliance period, to our knowledge no legislation has been introduced into the Congress that would seek to bring the United States into compliance," Antigua's ambassador to the WTO, John Ashe, wrote in a letter to the US trade representative, Rob Portman, which was released last week.

Mr Ashe also expressed concern at legislation drawn up by Congressmen Jim Leach (R-Iowa) and Bob Goodlatte (R-Virginia) who seek to further tighten the screws on the US online gambling market.

"Each of the bills is in key respects expressly contrary to the rulings and the recommendations of the Dispute Settlement Body of the World Trade Organization," Ashe wrote.

The US Trade Department has stated that it is continuing to explore various options to comply with the WTO ruling.

However, for Antigua & Barbuda, the issue goes far beyond enforcing the letter of the law, with the country's economic well-being at stake as it attempts to diversify its economy away from a reliance on tourism and agriculture.

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