Wednesday, April 04, 2007

Antigua had objected to recent US laws outlawing internet gambling. It
claimed that the laws, which even ban gambling-related payments that take
place outside the US's borders, broke the General Agreement on Trade in
Services, a free trade multilateral agreement which underpins the WTO. The
WTO had previously ruled in favour of Antigua and Barbuda, a nation of only
80,000 people. It said in 2005 that the US had broken a 10-year-old pledge
to open up the industry. The US did not change its policies and has now been
censured both for its original violations and its failure to comply with the
original order. The WTO objected to the fact that the US allowed gambling on
its own soil but not with foreign gaming companies via the internet. This
broke free trade rules, it said; it also said that the US had ignored its
first ruling. The decision "vindicates all that we have been saying for
years about the discriminatory trade practices of the United States,''
Antiguan finance minister Errol Cort told the news agency Bloomberg. The
news is a boost to online gambling companies, whose shares rose in value on
the announcement. Online gambling has hit difficulties in the wake of a new
US law passed last autumn specifically banning internet gambling. The legal
status of online gambling until last year was unclear. The US Department of
Justice had always interpreted the Wire Act of 1961 as covering internet
betting when it banned inter-state telephone betting. The US passed a more
specific law last year, a move which was criticised in the report. "Since
the original proceeding the United States had an opportunity to remove the
ambiguity and thereby comply with the recommendations and rulings of the DSB
[dispute settlement body]," said the compliance panel report. "Instead,
rather than take that opportunity, the United States enacted legislation
that confirmed that the ambiguity at the heart of this dispute remains and,
therefore, that the United States has not complied." The US had previously
told the WTO that it would comply, and asked for a "reasonable period of
time" in which to do so. That period lapsed in April 2006 and no action was
taken, by then or subsequently, to comply with the original order, though
the US claimed that a civil investigation into possible illegal activity
meant that it had complied. The anti-online gambling law passed last year
contains specific exceptions for domestic inter-state horseracing gambling.
It is the permitting of domestic long distance betting while banning foreign
distance betting that the WTO objects to.

Last year saw a crackdown on internet gambling, with two British businessmen
connected with gambling companies put under arrest. The then-Sportingbet
chairman Peter Dicks was arrested but released, while former BetOnSports
chief executive David Carruthers is still under house arrest in the US
awaiting trial for offences under the Wire Act.

Caribbean islands such as Antigua have become major bases for the $16
billion-a-year online gambling industry, with many companies operating
services from there. It has become a major part of the Antiguan economy,
which is said to have suffered in the wake of the US ban.