The WTO Appellate Body's ruling on the complaint filed by Antigua and Barbuda against the United States regarding the United States' blocking of foreign Internet gambling services has yielded a very wide range of interpretations. Which country won depends on who you ask, but here's what people are saying:
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"By reversing key aspects of a deeply flawed panel report, the Appellate Body has affirmed that WTO members can protect the public from organized crime and other dangers associated with Internet gambling."
- Peter F. Allgeier
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The WTO Appellate Body, from its report, "United States - Measures Affecting the Cross-Border Supply of Gambling and Betting Services":
"The Appellate Body recommends that the Dispute Settlement Body request the United States to bring its measures, found in this Report and in the Panel Report as modified by this Report to be inconsistent with the General Agreement on Trade in Services, into conformity with its obligations under that Agreement."
Mark Mendel, lead legal counsel for Antigua and Barbuda (taken from a press release issued by Antigua and Barbuda hours after the Appellate Body's report was made public):
"The impartial dispute resolution machinery of the WTO has functioned as we had expected. Justice has been served and potential compliance issues facing various U.S. corporations and the U.S. Department of Justice will now be resolved in a manner favorable to fair and responsible international commerce. . . .
At the end of the day, we expect that major Internet search engines, including Google and Yahoo, financial institutions and credit card service providers will be required to accept advertising from Antiguan internet gaming sites as they do currently with U.S. gaming interests, including hundreds of American casinos and state lotteries. . . .
This is a country-specific ruling, but it may have far-reaching implications."
Acting U.S. Trade Representative Peter F. Allgeier (taken from a press release issued a few hours after the Appellate Body's report was made public):
"This win confirms what we knew from the start - WTO members are entitled to maintain restrictions on Internet gambling. We are pleased that the Appellate Body has agreed with our position that the U.S. gambling laws at issue here protect public order and public morals. By reversing key aspects of a deeply flawed panel report, the Appellate Body has affirmed that WTO members can protect the public from organized crime and other dangers associated with Internet gambling. This is also a victory for the federal and state law enforcement officers and regulators who protect the public from illegal gambling and its associated risks of money laundering and organized crime.
U.S. restrictions on Internet gambling can be maintained. This report essentially says that if we clarify U.S. Internet gambling restrictions in certain ways, we’ll be fine."
From the same press release issued by Allgeier:
"The Appellate Body found that the concerns addressed by the three U.S. federal gambling laws at issue in this dispute 'fall within the scope of 'public morals' and/or 'public order'' under an exception to TO rules for trade in services. It merely found that, for this exception to apply, the United States needs to clarify one narrow issue concerning Internet gambling on horse racing. USTR will be exploring possible avenues for addressing this finding. USTR will not ask Congress to weaken U.S. restrictions on Internet gambling."
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" Unless the U.S. wishes to repeal all of its laws that currently permit any form of domestic remote gambling and adopt laws to affirmatively prohibit it in all forms country-wide, then they will have to provide Antiguan online gaming companies fair access to the U.S. market."
- Mark Mendel
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Mendel, in response to the United States' victory claim:
"The Appellate Body recommended that the WTO cause the U.S. laws to be brought in conformity with the GATS. The ruling also notes that, in effect, the U.S. laws discriminate against foreign commerce. Unless the U.S. wishes to repeal all of its laws that currently permit any form of domestic remote gambling and adopt laws to affirmatively prohibit it in all forms country-wide, then they will have to provide Antiguan online gaming companies fair access to the U.S. market."
From the same release, titled "Antigua Surprised By U.S. Victory Claims":
"The WTO Appellate Body clearly upholds key elements of the initial ruling in favor of Antigua. However, the U.S. has interpreted the ruling as allowing the U.S. ban on foreign online gambling activity to remain in place. Although a portion of the initial ruling was reversed by the appellate group, the overall result remains substantially the same - in Antigua's favor.
Evidence of the Antigua triumph is further indicated by the Panel’s findings that the U.S. made a commitment with respect to gambling and betting services under the General Agreement on Trade in Services (or "GATS"); that key federal laws are contrary to those commitments and violate the "market access" provision of the GATS; and that the U.S. did not meet its complete burden of proof under its claimed Article XIV "morals" defense to Antigua’s claims.
The U.S. has said that the WTO reversed a number of important rulings. In fact the only substantive part of the report that the Appellate Body reversed was the finding that the lack of consultations between the U.S. and Antigua meant that the U.S. had not met the "necessity" burden under Article XIV.
However, the Appellate Body ruled that the U.S. had not met their burden of proof, under the second part of Article XIV. The U.S. failed to show that their laws were not discriminatory in practice. In failing to present a valid argument in respect of the second part of Article XIV, their defence has been deemed to fail overall in the eyes of the WTO."
Attorney Philippe Vlaemminck of Vlaemminck & Partners:
"The U.S. will request due time for implementation (15 months) and, therefore, has sufficient time to consider the most appropriate actions. I think that for Antigua this is just a Pyrrhic victory. . . without further benefits for the private sector."
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"Pandora still lives."
- Stan Bergstein
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Bill Eadington, director of the Institute for the Study of Gambling and Commercial Gaming and the University of Nevada, Reno (as quoted by Wired News):
"We have carve-outs to the basic prohibition on Internet gambling. Those are the loopholes that the court found was inconsistent."
Richard Mills, a spokesperson for the U.S. Trade Representative (as quoted by CNET News.com):
"We need to clarify one narrow issue, which is Internet gambling and horseracing. It doesn't necessarily mean loosening restrictions. It could also mean tightening them."
Mendel, addressing the question of whether the United States would come into conformity with the GATS if to were to allow Antiguan companies to provide race betting but nothing else:
"It is not a 'horse racing' issue in the eyes of the WTO, it is a 'remote' vs. 'non-remote' issue. The horse racing is an example of how the U.S. does not apply its laws fairly, not the only area in which it doesn't. Because it failed this part of the Article XIV defense, it lost on the entire defense. That is the way the provision works. So, they should give us market access, period.
Now, I think they would have the alternative of prohibiting all remote gambling throughout the United States, not just horse racing, but all remote gambling. Only in that case could they say they are not discriminating against us. In no part of the ruling was it decided that there is or should be distinctions between different things on which to bet or different ways to bet."
D.G. Van Clief, Jr., National Thoroughbred Racing Association Commissioner:
"We are in the process of analyzing the WTO Appellate Body's lengthy and complex decision. From our initial review, we applaud the decision in so far as it reaffirms the sovereignty of United States gaming laws. We look forward to working with the Office of the U.S. Trade Representative, members of Congress and other appropriate parties to better understand the concerns of the appellate body as regards the federal gambling laws, including the Interstate Horseracing Act.
The horseracing industry has operated for more than 25 years pursuant to the IHA, a federal statute that provides a framework for interstate simulcasting of horse races among 42 states. These state licensed and regulated activities account for more than 80 percent of our industry's revenues, generate more than $1 billion in annual local, state, and federal taxes, and are the primary economic engine that supports the 472,000 workers in the $34 billion racing and breeding agribusiness."
Stan Bergstein, Executive Vice President of Harness Tracks of America Inc.:
"Regardless of whether the United States or Antigua won last week, as both claim, I can tell you who lost: American racing.
When our Acting U.S. Trade Representative, Peter Allgeier, starts talking about 'clarifying U.S. gambling restrictions in certain ways, we'll be fine,' he is talking about the Interstate Horseracing Act of 1978, which as amended in 2000 forms the bedrock on which current interstate Internet betting on horse racing rests in those states were it is legal.
Gambling expert Nelson Rose says the solution is easy: 'Congress should immediately amend the Horseracing Act again to allow Americans to bet on foreign races on the Internet and allow foreign bettors to wager on American races online.' But he acknowledges that if Nevada casinos and state lotteries get in the act, everything changes.
Congress already has spoken on this, saying it is a matter for states to decide, and I doubt it is going to change its mind to please Antigua or the World Trade Organization. Messing around with the Interstate Horseracing Act is a clear and present danger for horse racing. Pandora still lives."
Dr. Errol Cort, Antigua and Barbuda's Minister of Finance and Economy (as quoted by BBC Monitoring Service):
"Once the report has been adopted, Antigua and Barbuda will then meet with the U.S. to work out the necessary modalities to ensure that compliance is met with the ruling as found by the Appellate Body of the WTO.
We are all very pleased in respect of the ruling from the Appellate Body of the WTO. It means that once we have worked out the modalities with the U.S. that we would be able to access the U.S. market. That, therefore, means that we can expect to see a very vibrant and growing Internet gaming sector.
The immediate implications are that all those young persons out there in the community who may wish to be employed will find employment because we anticipate that this sector will be growing in leaps and bounds.
You will recall that in the past that the sector employed up to 3,000 persons but due to certain actions taken by the U.S. it curtailed the activity. The employment of 3,000 persons or thereabout was reduced in the vicinity, we anticipate that we should see a significant impact on our gross domestic product in growth this particular sector. . . .
. . . It is a great thing that we are able as a small island state to have access to a dispute settlement body where it is rules-based [and] has nothing to do with size so a small country like Antigua and Barbuda, notwithstanding land mass, size or population size nevertheless, was able to challenge and successfully challenge a giant like the U.S..
It says to all of us that this rules-based system is working and we commend the WTO in respect of the rules-based system of dispute resolution.
David Gantz, the director of the international trade law program at the University of Arizona, who believes the lack of a clear cut winner in the case could lead the U.S. to propose only modest changes to its federal gambling laws. (as quoted by CNET News.com)
"They may well be able to come up with a package that either satisfies Antigua, or even if it doesn't satisfy Antigua, satisfies the appellate body. It's very hard at this stage to predict."
Joseph Kelly, law professor at SUNY College Buffalo and editor of the Gaming Law Review (as quoted by CNET News.com):
"If advising a client, I would urge caution. This is not going to be clear cut. There are going to be further proceedings on both sides."
Nelson Rose, a gambling law expert and professor at Whittier Law School in Costa Mesa, California (as quoted by the New York Times):
"Of course, both sides can say they won. But the reality is, it's a pretty big win for the U.S."
The International Federation of Horseracing Authorities:
"The verdict was made by the so-called WTO Appellate Body, who issued a 146 page report today. A first reading of the report learns us that the WTO Appellate Body believes that the U.S. in principle committed itself to cover gambling under WTO rules. However, the U.S. convinced the Appellate Body that the restrictions to the free movement of remote gambling services were necessary to protect public morals or maintain public order.
The Appellate Body's ruling is the end of the WTO procedure, which started some time ago. There is no further appeal possible against this ruling.
The final ruling is a victory for the U.S. and confirms that public moral and public order are justifications to restrict cross-border online betting. The IFHA welcomes this point as it believes that gambling should be left to the jurisdictional integrity of each country.
The IFHA will undertake further action at international level to get full acceptance of this principle.
Remote betting operators should once and for all be stopped offering bets to people living in countries where this is forbidden by law. The WTO ruling is a welcome confirmation of this principle."