World Trade Organization Antigua Ruling Opens Doors For Actions Against U.S. Internet Gambling Law
February 1, 2007
A long-running dispute between the United States and the tiny Caribbean island of Antigua may finally be reaching an end, with an interim ruling by the World Trade Organization (WTO) being reported this week. Antigua took its case to the WTO several years ago after it blamed the United States for unfairly forbidding foreign companies from competing in the country’s online gambling industry in the field of horse racing. United States laws proclaim that online gambling is illegal; however it has created loopholes whereby gambling on horse racing and certain lotteries via the internet is approved. Antigua accuses the United States of applying those loopholes to national organizations only and unfairly clamping down on international companies who want to compete in these markets.
In an interim report by the WTO panel this week, it was noted that the organization voted against the United States’ stand on the matter and that the country was not providing full market access in the gambling field to those who seek other betting options. A spokesperson for the United States Trade Representative said that the interim report applies to a small portion of federal law that relates only to horse racing.
The final ruling on the issue is due to be made public within several weeks. If nothing changes with regard to the ruling, Antigua will be the smallest country in history to win a case through the World Trade Organization. Antigua will have the right to take retaliatory measures against the United States in the form of sanctions and tariffs on imports. “America's prohibition in the provision of gambling services from other countries violates the US commitments to the WTO", said a counsel in the case for Antigua.
The present United States response to the ruling brinks on scorn. The Antiguan economy is tiny and largely dependent on the American economy. No amount of sanctions or tariffs is likely to sway US lawmaker’s decision regarding internet gambling. However, many experts believe that Antigua’s victory could set a precedent for larger countries in the world to challenge the Unlawful Internet Gambling Enforcement Act (UIGEA) through the WTO.
Europe has been an interested party in the Antigua affair from the beginning. Many feel that the European Union was waiting to see which direction the ruling would take before it sprang to action regarding the way European online casinos were affected by the US law. Several online companies that operate out of Europe have had to close their doors to American clients or face the threat of the arrest of their personnel on US soil. Already the United States authorities have arrested several heads of companies who are accused of violating the new UIGEA law.
European Union International Market Commissioner, Charlie McCreevy has already commented that the UIGEA was a “restrictive practice” and that the EU may challenge the law through the WTO, following Antigua’s success.
The European Union has accused the United States of protectionism, in a bid to protect their local online casino operators from international competition. Since the United States is a member of the WTO, any form of protectionism goes against WTO policy and cannot be tolerated in any form. The EU said that the WTO was a viable venue for attacking America’s policy.
The United States is not the only country to be targeted by the European Union Commissioner, however. Legal action has been brought against several other countries that are part of the Union itself in a bid to do away with obstacles to international competition in the gambling industry. These European countries have until the end of the present year to justify their stand on monopolies and protectionist policies.
It remains to be seen whether the European Union will challenge the United States law through the WTO in the coming future. The WTO is at present trying to resume negotiations for a new world trade agreement and any new claims may torpedo any efforts made to reach a global agreement. As such, the EU commissioner has categorically stated that the organization was not rushing to file a complaint immediately. “It’s not something of major momentum”, he said.