US Rejects Antigua Position on Gaming Issue

26 April 2006


Antigua Sun
Tuesday April 25 2006

by Patricia Campbell

The United States is now arguing that it is in compliance with the WTO ruling that it should adjust its discriminatory trade regulations which restrict the access by Antigua-based gaming companies to the US market.

The US is now claiming that Antigua & Barbuda has misunderstood the WTO ruling. This is coming only a year after the WTO’s Dispute Settlement Body (DSB) ground-breaking decision in Antigua & Barbuda’s favour.

The US raised the hackles of the government of Antigua & Barbuda and its supporters in Caricom earlier this month, when America failed to amend legislation ahead of the 3 April compliance deadline set by the DSB last year.

It did little to soothe relations with Antigua & Barbuda at last week’s meeting of the DSB when the US Ambassador to the WTO, Peter Allgeier, stated “compliance with the recommendations and rulings of the DSB in this dispute relates exclusively to the sole point of whether the United States is now able to show that relevant US laws do not discriminate against foreign suppliers of remote gambling on horse racing. US laws do not discriminate, and we can show this.”

Allegeir stated categorically “the United States is in compliance with the recommendations and rulings of the DSB in this dispute.”

He went on to state the US government is aware, based on public statements, that Antigua & Barbuda’s understanding of the findings of the DSB in the dispute differs from America’s.

“We believe that understanding is incorrect, and that Antigua’s misreading of the results of this dispute has fostered misperceptions concerning their implications.”

He reiterated the US’ position that since the restrictive legislation deals with “an issue of public morals and public order” it falls under an exception under the General Agreement in Trade and Services (GATS).

He further contended that the only outstanding issue recognised by the DSB relates to horse racing, quoting a statement from the WTO’s Appellate Body that “the only inconsistency… stems from the fact that the United States did not demonstrate that the prohibition embodied in the measures at issue applies to both foreign and domestic suppliers of remote gambling services, notwithstanding the [Interstate Horseracing Act]….” and a ruling from the DSB that the US had not “shown, in the light of the Interstate Horseracing Act” the non-discriminatory application of the relevant measures.

“Notwithstanding any assertions to the contrary, this question concerning horse racing is the only issue,” Allgeier said.

He concluded his statement on the dispute with Antigua & Barbuda by stating that US criminal statutes prohibit the interstate transmission of bets or wagers, including wagers on horse races and that the US Department of Justice is currently undertaking a civil investigation relating to a potential violation of law regarding this activity.

“We hope that this explanation puts to rest any lingering misperceptions of the rulings and recommendations that the DSB in fact adopted in this dispute,” he said.

In response, Antigua & Barbuda’s Ambassador to the WTO Dr. John Ashe took issue with the US’ suggestion that its compliance “is in fact no different to the position which was raised during the course of the proceedings and found unpersuasive by both the panel and the Appellate Body.”

The next step in the dispute process will be for Antigua & Barbuda to invoke an Article 21.5 compliance panel.

This three member WTO panel will conduct an evaluation of the relevant US legislation and examine the extent to which they have been brought into compliance.

This panel is usually called on to examine legislative changes for compliance. In this case, the US has not made recommended changes, but has essentially claimed that existing laws already comply with WTO standards and the ruling of the DSB.