WTO Deadline Expires In Antigua/US Gaming Dispute

by Mike Godfrey, Tax-News.com, Washington

04 April 2006

The WTO's deadline for the United States to respond to its ruling on the US/Antiguan gaming dispute expired yesterday, April 3rd, with no sign that the US has taken any action on the WTO's demands.

The 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.

In mid-March, Antigua and Barbuda’s Ambassador to the WTO, Dr. John W. Ashe, responded with disappointment to a US statement made in Geneva at a meeting of the WTO’s Dispute Settlement Body over the dispute; and last week Dr Ashe and Antigua and Barbuda’s legal adviser on the WTO dispute, Mark Mendel, met US Congressman Pete Sessions (Rep., Texas) to discuss the current status of the dispute.

“The primary objective of the meeting was to brief the Congressman on the status of our WTO dispute with the United States,” said Ambassador Ashe.

Dr Ashe also asked the CARICOM Permanent Representatives to the Organization of American States to reinforce Antigua and Barbuda’s concerns over the dispute with the US Administration and Congressmen.

' What is troubling,' said the Ambassador after the Geneva meeting, 'is what has actually been happening in the United States since we won our hard-fought and costly dispute. Legislation has indeed been introduced in the United States Congress addressing the difficult topic of remote and Internet gambling. In fact, two bills have been introduced separately in the Congress which are substantively quite similar. This legislation, one bill entitled the "Unlawful Internet Gambling Enforcement Act of 2005" and another entitled the "Internet Gambling Prohibition Act," is the only legislation introduced into the Congress since the determination of the "reasonable period of time" in our case.'

'Unfortunately, each proposal is about as directly contrary to the recommendations and rulings of the DSB as could possibly be imagined. Not only do these bills do nothing to provide Antiguan operators with any access whatsoever to the vast American gambling market, but in fact each would further entrench the anti-GATS nature of United States gambling law by expressly exempting from its application domestic Internet gambling on horse racing, Internet gambling conducted by Native American tribes and, most significant of all, Internet gambling that occurs entirely within the border of a particular state. We have maintained all along that the American prohibition was really based upon the cross-border nature of the services rather than any true "evils" associated with "remote" gambling-and this pending legislation emphatically confirms we were correct.'

'It is with great concern that we learn that the United States Trade Representative has used our weakness as an express reason why gaming and other interests in the United States should not be concerned about our victory at the WTO. As reported on a website of an interest group in the United States, the USTR assured the participants at a conference held late last year that "as they see it, the most Antigua can do is to levy tariffs on US imports equal to the 'damage' done by the US failure to comply with the WTO ruling. Antigua is a tiny economy and imports little from the US. Imposing additional duties would simply make American goods more expensive there. Further, at the same meeting, USTR representatives were quoted as saying that "if the WTO does not agree [with American compliance efforts], the issue will likely be litigated for at least another year." '

The tiny Caribbean jurisdiction, where several online gaming firms are based, argues 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.

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