Antigua Threatens US with WTO Action

6 March 2003

A possible lawsuit against the U.S. government on behalf of Antigua and Barbuda could blow up in the islands' face, says a handful of Internet gaming experts.

Antigua and Barbuda Prime Minister Lester Bird said earlier this week that his government is looking at bringing a complaint before the World Trade Organization against the United States because of U.S. actions to prohibit online gambling in America.

Bird said in the Antigua Sun on March 3 that U.S. banking regulations and federal laws have stumped the growth of the island nation's economy to the tune of more than $30 million.

According to the report, Bird will bring a complaint against the U.S. government before the Grievance Committee of the W.T.O. for restraint of trade and interfering with his country's sports book and Internet gaming industry.

A spokesperson in Bird's office had no comment on the possible W.T.O. action. Ronald Maginley, the director of offshore gaming for Antigua, was traveling out of the country and was also unavailable for comment regarding the W.T.O. developments.

"As a result of the constant attack upon the industry by members of the U.S. Congress, the Leach Bill, the Kyle Bill, our economy has suffered," he said.

It is in that argument -- that the Leach Bill and Kyle Bill have affected the Antiguan economy -- where Bird's argument hits its first hurdle, said one Washington insider.

"The Leach Bill isn't even law yet," he said on the condition of anonymity. "His main basis for the argument is false from the start."

The only law the U.S. has in place, the Federal Wire Act, which does deal with Internet gaming, was passed in 1961. The law makes the use of telephone lines illegal for the use of sports wagering and betting information or placing bets on games.

The Leach Bill is currently awaiting a markup at the committee level in the House of Representatives and if passed would make the use of banking instruments including credit cards, wire transfers, and ATM cards illegal for funding online gaming transactions.

In the wake of tougher credit card rules and regulations for consumers and merchants alike, Bird claims that nearly 80 percent of Antigua's online casinos and sports books fled to Costa Rica, where banking regulations weren't as stringent.

Just last month, the largest bank in Costa Rica announced it was cutting off sports book and online casino operators from using its facilities. Bird said that decision and the time away from Antigua have caused many operators to consider returning to the island. He called the United States to task on its approach with jurisdictions that license online gambling.

"We have the best legislation in terms of complying and conforming with international regulations," he said. "We feel that the United States is absolutely unfair to small developing countries like us and therefore we are going to be the mouse that roared."

One gaming expert, though, said Antigua could turn into the mouse that whimpered. Not only has the U.S. Congress failed to pass any prohibitive law aimed directly at Internet gambling, but the Wire Act applies to U.S. states as well, not just foreign jurisdictions.

"As far as the W.T.O. is concerned and a restraint of trade argument goes I don't think they have much there," he said. "The U.S. clearly doesn't discriminate between foreign and domestic betting operations."

An insider on Capitol Hill also said Bird's comments could be bad news for Antigua. He said Congressmen don't like being told by anyone what they can and can't legislate, much less by a foreign head of state.

Bird, though, said the U.S. government's power play with credit card companies has nearly destroyed the niche Antigua carved for itself in Internet gaming.

"America is the largest gambling country in the world so how can they then be so unctuously self-righteous?" he said. "To use their power to destroy the niches that we are having -- trying to develop some kind of diversification in our economy -- is unfair. Therefore we are going to take them before the W.T.O."

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