Antigua hits back at US gaming laws

15 June 2006

Financial Times/FT.com
By Frances Williams in Geneva
Published: June 14 2006 03:00 | Last updated: June 14 2006 03:00

The tiny Caribbean island state of Antigua and Barbuda has taken the first steps to haul the US back before the world trade court in a long-running dispute over internet gambling.

Antigua, which has a population of 68,000, says Washington has failed to comply with a World Trade Organisation ruling last year that US internet gambling laws discriminate against foreign suppliers. As a result, Antigua claims to have lost a large chunk of the rapidly growing offshore gaming business it has been building to diversify its economy away from tourism. US gamblers are estimated to account for about half the $12bn global internet gaming market.

This week, Antigua requested meetings with the US, a prelude to the establishment of a WTO panel to judge compliance. If, after any appeals, the WTO finds the US still in breach of fair trade rules Antigua can ask for permission to retaliate. “Obviously, we are going to have to be a bit creative in order to come up with something to motivate the Americans,” Mark Mendel, a US lawyer advising Antigua, said after the April 3 2006 deadline set for US compliance expired.

Antigua is especially aggrieved because the US has taken no action to implement the WTO ruling, claiming – on the basis of an interpretive statement by the justice department – that its laws are already in compliance.

“Antigua and Barbuda does not believe that a simple restatement of a legal position taken by a party to a dispute . . . can be considered a [compliance] measure,” Antigua says in its consultation request.

The US argues it does not discriminate against foreign suppliers of internet gambling services because domestic suppliers are equally restricted in offering services across state boundaries.

The WTO agreed the US ban on cross-border gambling services could be justified under WTO rules to protect “public morals” but pointed out remote gambling wagers were permitted under the 1978 Interstate Horseracing Act. Allowing remote gambling on horse races while banning the remote supply of gambling services from overseas suppliers was discriminatory, it said.