Antigua targets US on online gaming

[Peter McDermott]

May 22, 2007, 2:38PM
Antigua Targets U.S. on Online Gaming

By BRADLEY S. KLAPPER Associated Press Writer
© 2007 The Associated Press

GENEVA — The tiny Caribbean nation of Antigua and Barbuda sought to enlist other countries Tuesday in targeting the U.S. over Washington's failure to comply with a WTO ruling that its Internet gambling restrictions were illegal.

The tiny Caribbean nation of Antigua and Barbuda seeks compensation from the U.S. over its illegal restrictions on Internet gambling sites based overseas and on Tuesday asked other countries to join in as it targets Washington over its failure to comply with global trade rules.

Antigua, the smallest country to successfully litigate a case in the World Trade Organization's 12-year-history, also threatened to target American trademarks, copyrights and telecommunications companies after the WTO on Tuesday formally adopted a landmark decision reached in March that the United States' restrictions on online gambling were illegal.

"Not only do we think that members should press claims for compensatory adjustments as a matter of economic self-interest, but we also believe it is important that the process is made as difficult as possible for the United States," Ambassador John Ashe of Antigua told the WTO's dispute settlement body.

The gambling dispute is threatening to become one of the most complicated the WTO has ever handled and could soon spark a series of compensation negotiations between the United States and other trading powers such as the European Union.

After losing the case, the U.S. announced that it would take an unprecedented legal step to change the international commitments it made as part of the 1994 GATS treaty regulating the trade in services among the 150 members of the WTO. As a result, the U.S. declined to challenge Tuesday's adoption of the Internet gambling ruling, because it says that its legal maneuver effectively ends the case.

Juan Millan, a U.S. trade lawyer, told the Geneva-based trade body that the procedure _ which no government had previously used to avoid a WTO ruling _ was invoked "in order to bring the United States into compliance and to resolve this dispute permanently."

"This modification will ensure ... the original U.S. intent of excluding gambling from the scope of U.S. commitments," he said.

The U.S. argues that it is also exempt from negotiating compensation to governments _ as required in the GATS clause allowing countries to rewrite their services commitments _ because Internet gambling was never explicitly mentioned in the negotiations of the early 1990s.

The March ruling upheld the U.S. right to prevent offshore betting as a means of protecting public order and public morals. But it said it was illegal to target online gambling, without equally applying the rules to American operators offering remote betting on horse and dog racing.

The former British colony in the Caribbean had been promoting electronic commerce as a way to end the country's reliance on tourism, which was hurt by a series of hurricanes in the late 1990s. There are 32 licensed online casinos in Antigua, employing 1,000 people and generating a yearly revenue of about $130 million. Seven years ago, its casinos had an annual income closer to $1 billion.

The EU has stressed at every stage in the four-year dispute that it would act in support of its interests _ a reference to the British-based companies that lost millions because of the U.S. restrictions. Officials in Brussels said, however, they had yet to notify Washington whether they would submit a compensation claim.