Antigua Concerned That U.S. Isn't Complying With WTO Ruling

24 February 2006

The government of Antigua and Barbuda is crying foul over the United States' lack of response to its April 3 deadline to comply with the World Trade Organization [WTO] ruling regarding cross-border trading of Internet gambling services.

Dr. John W. Ashe, the Antiguan ambassador to the WTO, sent a letter to United States Trade Representative [USTR] Rob Portman's office last week in response to the introduction of yet another U.S. online gambling prohibition bill.

The letter illustrated that not only has the U.S. taken no steps to amend it's trade laws to comply with the ruling, but Rep. Bob Goodlatte's Gambling Prohibition Act, introduced Feb. 16, and Rep. James Leach's Internet Gambling Enforcement Act, introduced in November, directly contradict the ruling by attempting to strengthen U.S. laws against online gambling.

"As of today," Ashe said in the Feb. 16 letter. "With less than two months remaining on an 11 month and two week compliance period, to our knowledge no legislation has been introduced into the Congress that would seek to bring the United States into compliance with the recommendations. Further, your government has given no indication to Antigua and Barbuda as to how the United States intends to effect such compliance. The only legislative efforts so far, the Goodlatte Bill and the Leach Bill, are baldly contrary to the rulings and recommendations of the WTO. We can only assume that this legislation was neither sponsored by nor enjoys the support of the USTR and the current American administration."

The Antigua and Barbuda government won a two-year battle in April 2005 in the Appellate Body of the WTO against the U.S. over its prohibition of Internet gambling services offered from Antigua to U.S. consumers. Antigua said the U.S. blanket prohibition of cross-border gambling services violates an international trade agreement, known as the General Agreement on Trade in Services [GATS].

Haden Ware, managing director for Antigua-based sportsbook World Sports Exchange, would like to see the U.S. concede to the terms of the WTO Appellate Body Ruling.

"The USTR is set to give a speech April 3 at the WTO in front of the other member states and I think it's going to be a pretty difficult spin for them to convince the other members of the WTO that they've actually been working on complying with the ruling against them, in light of the recent announcement by Goodlatte," Ware said.

But he sees the U.S. as a wolf in sheep's clothing.

"From the standpoint of Antigua as a nation," Ware said. "The United States and other major economic powers have represented the WTO to the smaller developing countries as an organization where smaller developing countries' voices can be heard and justice can be obtained. But what the introduction of the Goodlatte bill does, in essence, is that it spits in the face of the WTO and sends a message to developing nations that the United States is only interested in rulings that go their way.

"What people have to understand is that the United States uses the WTO more than any other nation by far. It's a huge weapon in their arsenal to push free trade throughout the world. So this is a pretty dangerous message to be sending, particularly at a time when the Bush Administration is taking a pretty hard stance against China trade policies."

Ware and other representatives of Antigua are trusting that the USTR was not aware of Goodlatte's bill before it was introduced and that it is in no way influencing their position.

"Hopefully the trade representatives can sit down with him [Goodlatte] and either work out a trade compromise whereby certain exemptions are made for Antigua, or possibly sit sown with Goodlatte and ask him to put the bill away entirely until they work out their compliance with the WTO case."

Bills similar to Goodlatte's Gambling Prohibition Act have been introduced in past sessions of Congress and have died. Goodlatte himself has attempted to pass very similar legislation in both the 106th and 107th Congresses, but they died in session. But in this year's incarnation of the bill, Goodlatte is attempting to redefine certain terms of the federal Wire Act of 1961 to specifically outlaw all forms of remote gambling within the U.S.

Goodlatte has claimed that the scandal involving lobbyist Jack Abramoff caused his previous bills to fail--an excuse Ware doesn't think holds much water. Nevertheless, he does feel Goodlatte and other lawmakers' agenda are something to watch out for.

"This [bill] is a trickier one because obviously Goodlatte is playing scare tactic politics, which is a big thing in Washington these days," he said. "And he's got opponents to the bill kind of in line that if [they] vote against it then [they're] somehow tied to Jack Abramoff, which is absolutely ridiculous. The concern this year, in the wake of the Abramoff scandal, is that they're going to take bills that, in the past, Abramoff had been against or lobbied against and throw them up there to show the community that they can't be bought. It's kind-of a backwards premise because, in fact, they're the one who took the money; they're the ones who got caught with their hands in the cookie jar.

"Although Abramoff is a bad guy, the cause itself doesn't necessarily mean that it's bad. The Indian tribes are the ones he was lobbying for, not the offshore sportsbooks. And not to pass a bill in the face of the Indian tribes just really sends a pretty peculiar message."

Mark Mendel, lead counsel representing the government of Antigua and Barbuda in the WTO case, has a different perspective of the Goodlatte bill. He sees it as a move potentially in Antigua's favor that could help advance Antigua's case with in the WTO, but it could also be damaging to the WTO.

"That legislation is as contrary to the WTO decision as possible and provides a brilliant emphasis of our entire position before the WTO--some of which the WTO panels had a hard time understanding," he said. "And that is that the U.S. prohibition is all about states rights and domestic economics and not at all about protecting gamblers or anyone elseā€¦ If the U.S. takes this approach, it is a complete rejection of what the WTO has indicated the U.S. should do. If the U.S continues to follow this approach, or continue to ignore the rulings of our case, it would spell serious problems for the integrity of the entire WTO Dispute Resolution system."

The deadline is a little over a month away. It's a waiting game for now. Antigua can't officially make a move until the U.S. fails to show proof of compliance by the deadline. But all evidence suggests that the U.S. has made little or no effort to meet the terms of the WTO ruling. According to Mendel and Ware, the U.S. has not been in contact with Antigua.

"To our knowledge, he [Portman] has done nothing," Mendel said. "Despite our many suggestions that we work together on some sort of compromise, we have heard nothing from Portman's office at all."

Antigua is preparing itself to see no more progress by the U.S. than there is at this point. Mendel stressed that they are prepared for their next move and not willing to forfeit.

"If the U.S. is not in compliance by April 3 2006, we intend to pursue all remedies available to us at the time, which could run the gamut from a creative sanctions proceeding, to a challenge to the responsiveness of the U.S. to the recommendations of the WTO in our case, to perhaps even a new case," Mendel said. "Now that we know precisely how the WTO perceives the many unique issues in our case, that would make things particularly untenable for the U.S."

Ashe further expressed his country's commitment to the case and echoed the general feeling among those in support of Antigua's position in the case. He is calling on the U.S. government to work with Antigua and Barbuda directly to reach an outcome that is satisfying to both parties.

"Antigua and Barbuda stand prepared to ensure that our people reap the benefits of this historic decision," he said. "We will use every avenue open to us at the WTO and otherwise to see that the United States complies with the decision in a timely and comprehensive manner."

Portman's office was contacted by IGN but provided only the same brief statement it released last week after receiving the letter from Antigua.

"All state claims were dismissed," said Neena Moorjani, press secretary for the USTR. "All but one federal claim was dismissed. The issue is a very narrow one. As you likely know, the time period for compliance has not yet expired. The U.S. is exploring a number of different avenues to clarify there is no discrimination -- even outside of legislation. We are in active discussions within the executive branch, with Congress and also with the private sector to determine the best way to move forward."

Click here read the letter from Antigua's WTO Ambassador John Ashe to letter to U.S. Trade Representative Rob Portman.

Emily Swoboda is the senior staff writer at IGamingNews. She lives in St. Louis, Mo.