If you thought the recent Antigua v. United States case in front of the World Trade Organization would make the USA rethink its on-line gambling position, think again.
Proponents of legal internet gambling had been closely watching several disputes working their way through the World Trade Organization. The most widely known case involved a trade dispute between Antigua and the United States.
In 2003, Antigua challenged the United States’ prohibition of internet gambling operators. As internet gambling has grown, the United States has criminalized the operation of internet gaming sites. The U.S. has arrested owners of gambling sites and electronic money services used by the sites as they travel through the United States. Last year it passed the “Anti-Internet gambling prohibition act,” which further restricted the flow of money to gambling sites. Due to clear U.S. discrimination against foreign gambling sites (it is legal to use Youbet.com, based in California), Antigua won round after round against the U.S. in the WTO court.
Antigua’s case came to a bittersweet closure. The WTO once again held that the U.S. was in violation of its trade agreements, and will allow Antigua to retaliate. The ruling fell short in that the trading losses were limited to $21 million per year (Antigua requested $3.4 billion per year). Key to this finding was that Antigua could only recover losses from internet horse racing, and not other forms of internet gambling. This was very close to my earlier estimate of $16 million pear year <LINK>.
In theory, Antigua can request the WTO’s permission to ignore U.S. copyrights and other intellectual property rights in order to recover the $21 million per year unless the U.S. complies with its free trade commitments. Given the minimal amount of the award, it is unlikely that it will affect the U.S. policy on internet gambling.
Gamblers had placed hopes that the European Union, Canada or Japan would succeed in opening our gambling markets. In December, these parties also resolved their trade disputes with the U.S. in exchange for concessions in warehousing services, technical testing services, research and development services, and international postal services. Consequently, there are no significant trade disputes on U.S. internet gambling pending.
If you are hoping for the legalization of internet gambling, do not count on the WTO changing U.S. policy any time soon. Your only hope rests with the U.S. congress, and not many representatives will advocate a reversal of the internet gambling ban. |
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