WTO Sets Up Dispute Resolution Panel For Antigua

by Glen Shapiro, LawAndTax-News.com, New York

27 July 2006

Antigua and Barbuda requested the formation of a compliance panel at the WTO last week in connection with its on-line gaming dispute with the US.

Antigua told the World Trade Organization's Dispute Settlement Body that the US had been busy passing legislation that was directly and unequivocally contrary to the DSB rulings. Out of the entire universe of remote gaming offered to Americans, in the past months the US Department of Justice had chosen to indict the principals of two Antiguan licences, it argued.

The US expressed disappointment. However pursuant to a procedural agreement with Antigua and Barbuda, it accepted the establishment of the compliance panel. The US said that the issue of compliance was limited, clear and straightforward. It explained that the DSB found that the US had not shown that the US legal prohibitions applied to both foreign and domestic suppliers of remote betting services for horse racing. The US concluded by stating that it was now in position to show that the US prohibitions apply not only to foreign but also to domestic suppliers.

The DSB agreed to establish the compliance panel.

Last May, Antigua's Minister of Finance and the Economy, Dr Errol Cort, said that if the WTO finds that the United States is failing to comply with the body's 2005 ruling, which favoured Antigua, then his government reserves the right to request authorization to suspend concessions or other obligations under the relevant WTO provisions. This could, for instance, include the suspension of intellectual property conventions, allowing Antigua and Barbuda to manufacture and distribute pirate goods and services with impunity.

Antigua is also up in arms about the bill sponsored by Rep. Bob Goodlatte (R-Va.), chairman of the House Judiciary subcommittee on crime, which passed the House of Representatives last week, and which would add an “enforcement mechanism” to the existing Wire Act to address the situation where a gambling business is located offshore but the gambling business uses bank accounts in the United States.

The US has successfully used the Wire Act, which prohibits the use of telecommunications to make wagers across state lines or internationally, to attack the US operators of offshore casinos.

Two weeks ago, the US District Court for the District of Columbia unsealed an indictment under the Wire Act against the operators of two internet gambling firms based in Antigua and Barbuda for offenses related to an estimated $250 million worth of internet gambling wagers.

The indictment alleges that wagers were placed by toll-free telephone numbers and through the website, www.BetWWTS.com, and other sites controlled by the defendants in violation of the Wire and Travel Acts.

The indictment also alleges that by causing funds to be sent from places within the United States to places abroad with the intent to promote Wire and Travel Act violations, the operators engaged in a money laundering conspiracy.

US punters are estimated to be behind up to half of the $12 billion a year wagered in cyber casinos. Antigua-based operators are thought to account for 25% of this turnover.

Recommended