The issue of internet gambling was brought before the WTO in
June 2003 when the tiny Caribbean state of Antigua and Barbuda
complained that US prohibitions against internet gambling were
discriminatory and in breach of international trade agreements that
require the US to allow foreign internet companies to offer their
services to US citizens.
According to reports, Antigua and Barbuda has less than 67,000
citizens, but 3,000 of them are employed in the on-line gambling
industry. The country's economy has consequently been hit hard by
the moralistic stance of the world's only superpower.
The US argued that the restrictions it has put in place do not
in fact breach the trade agreements, which allow for exceptions for
moral reasons. In this case, said the US, the restrictions are
necessary because gambling on the internet is different from
casino-based gambling, not least because of the difficulty in
preventing children from accessing the services.
It also pointed out that when the WTO was set up in 1995,
gambling services were excluded from its remit.
But these arguments were rejected in a preliminary ruling by the
WTO in March and then again in early May, when the organisation
issued a final report finding that the US was in breach of the WTO
rules.
The report has now been published; with the panel keen to stress
that the finding relates purely to the circumstances of this
complaint and that the US may well have not intended to bind itself
to the protection of on-line gambling when it negotiated the
relevant provisions of the General Agreement on Trade in
Services.
"It is not for the Panel to second-guess the intentions of the
United States at the time the commitment was scheduled. Rather, our
role is to interpret and apply the GATS in light of the facts and
evidence before us," said the panel.
"In this case, we came to the conclusion that the US measures at
issue prohibit the cross-border supply of gambling and betting
services in the US in a manner inconsistent with the GATS. We so
decided, not because the GATS denies Members such a right but,
rather, because we found," says the report, "that, in the
particular circumstances of this case, the measures at issue were
inconsistent with the United States' scheduled commitments and the
relevant provisions of the GATS."
Richard Mills, spokesman for US Trade Representative Robert
Zoellick, was quick to decry the findings.
"Throughout our history," he said, "the US has had restrictions
on gambling, like many other countries. Given these restrictions,
it defies common sense that the US would make a commitment to let
international gambling operate within our borders. Antigua is
arguing for a result that was never imagined, much less bargained
for, in the Uruguay Round negotiations."
"We will vigorously appeal this deeply flawed report to the WTO
Appellate Body and remain confident in the basis for reversing this
panel report," he added.
