The United States will use a World Trade Organization (WTO) procedure to clarify its ban on I-gaming, the U.S. Trade Representative's office said today.
The U.S. government is responding to a 2005 WTO ruling, which found against U.S. restrictions on online betting--online horse-race betting, in particular--in a case brought by the Caribbean island nation of Antigua and Barbuda (Antigua).
In March, a WTO compliance panel found that the United States had not taken the appropriate measures to comply with the original ruling.
The Geneva-based trade referee has said the U.S. government may continue to maintain restrictions on online gambling as long the same restrictions are applied to domestic operators offering online horse-betting services.
The United States, however, has elected to clarify to the WTO that it never intended to allow I-gaming services as part of market-opening commitments it made in the early 1990s.
"U.S. federal and state laws have banned interstate gambling for decades," said Deputy U.S. Trade Representative John K. Veroneau in a prepared statement. "Therefore, it would be nonsensical for the United States to make a commitment to open up interstate gambling for foreign providers when it was unlawful for U.S. providers."
Veroneau added that neither the United States nor other WTO members noticed this "oversight" in drafting the U.S. commitments until Antigua brought its case before the WTO 10 years later.
The Antigua Online Gambling Association (AOGA), for which Mendel-Blumenfeld, LLP, provide legal counsel, was critical of the U.S. decision.
"What is the point of having an international trading system enforced by a neutral court in
Geneva when a developing member like Antigua successfully challenges the largest
trading member in the world, and the large trading member simply quits after a losing
verdict in one case?" the AOGA said in a prepared statement.
The government of Antigua was likewise critical.
“While we had of course been aware of the possibility of the United States taking such an action, we frankly considered it extremely unlikely,” said Dr L. Errol Cort, Antigua’s Minister for Finance and the Economy. “It is almost incomprehensible that the United States would take such an action in the face of an adverse dispute resolution ruling. This is going to have very severe consequences for the global free trade movement.”
Antigua initiated the WTO's dispute settlement process in June 2003, and in April 2005, obtained a ruling that the United States gives preferential treatment to domestic I-gaming operators, which is a violation of an international pact called the General Agreement on Trade in Services (GATS).
The United States was advised by the WTO's Dispute Settlement Body in 2005 to adjust its laws to provide fair treatment to both domestic and foreign I-gaming providers, giving it until April 3, 2006 to do so.
Click here to view the AOGA statement.
Click here to view the statement from the Antiguan government.