Antigua Challenges Gambling Act Before WTO

[MstrHume]

In 2003, the nation of Antigua and Barbuda alleged that U.S. laws governing internet gambling violated the United States' free-trade obligations administered by the World Trade Organization. As reported by Slate Magazine:

[ QUOTE ]
Antigua's basic theory in its WTO complaint was simply that, if the United States allows any Internet gambling at all, it couldn't, in light of its WTO obligations, impose barriers to foreign companies seeking access to its market. It was a pretty straightforward free-trade argument. In response, the United States tried to take advantage of a "morals" defense in WTO proceedings that says, reasonably enough, that if you don't make a product in your country due to moral objections, you needn't open your market to foreign providers of that product.


Interestingly, the United States was able to establish that there was a defensible "moral" distinction between brick-and-mortar casinos in the United States and online casinos and that it could prohibit the latter while allowing the former. But to take advantage of this distinction, the United States had to show that it prohibits all forms of Internet gambling. And to do so, it could only turn to laws such as the Wire Act, which rather plainly do no such thing. As a result, the WTO upheld Antigua's complaint and essentially ruled that while a "morals" defense could theoretically be made, the United States was in no position to actually make it, since it doesn't completely prohibit Internet gambling.



The WTO gave the United States a year to comply with its ruling by either changing its laws to fully ban online gambling or by allowing foreign access to the online-gambling market. That year ended last April, but rather than do anything to comply, the United States simply issued a statement to the effect that it had spent the year reviewing the matter and decided that it has been in compliance all along. Antigua is, unsurprisingly, challenging this response. A final decision from the WTO is expected early next year.



It was in this context—a context to which Congress seems to have been largely oblivious—that Congress enacted its recent legislation. The legislation causes new problems, because it seems to clarify beyond any doubt that the United States does not, in fact, prohibit all forms of Internet gambling. Indeed, the law contains an explicit list of circumstances in which Internet gambling is permitted, including betting on horse racing and in-state gambling. So, whatever slender chance the United States may have had of establishing some broad moral objection to online gaming appears to have disappeared. In fact, things look so bleak for the United States that the government recently published a "Request for Comments" in the Federal Register that is essentially a nationwide call for help from anyone who thinks they can come up with an argument it can use here. The government, it seems, is all out of ideas.

[/ QUOTE ]
The Free Trade Bulletin has an article about the issue. There is also extensive discussion on Slashdot.

[heater]

This belongs in the "Three Year Old News, Views, and Gossip" forum.

[mmbt0ne]

Sure, but the new stuff in this article is good

[ QUOTE ]
The legislation causes new problems, because it seems to clarify beyond any doubt that the United States does not, in fact, prohibit all forms of Internet gambling. Indeed, the law contains an explicit list of circumstances in which Internet gambling is permitted, including betting on horse racing and in-state gambling. So, whatever slender chance the United States may have had of establishing some broad moral objection to online gaming appears to have disappeared.
...
The obvious question is what Antigua can do with a victory at the WTO.
...
If the United States remains recalcitrant, under the WTO rules, Antigua would potentially have the right to suspend its own compliance with the treaty that obligates it to respect the United States' intellectual-property laws. That, one can well imagine, might get Washington's attention.

Want a cheap copy of Microsoft's latest software or a nice medical device that, annoyingly, is protected by a U.S. patent? Come to Antigua.
...
While there undoubtedly would be complicated issues and restrictions on the scope of any suspension the WTO approves, the United States shouldn't assume that the world body is too timid to hand Antigua this sort of stick with which to retaliate, since it has authorized intellectual-property-based reprisal before.

[/ QUOTE ]