Antigua had objected to recent US laws outlawing
internet gambling. It claimed that the laws, which even ban
gambling-related payments that take place outside the US's borders,
broke the General Agreement on Trade in Services, a free trade
multilateral agreement which underpins the WTO.
The WTO had previously ruled in favour of Antigua and Barbuda, a
nation of only 80,000 people. It said in 2005 that the US had
broken a 10-year-old pledge to open up the industry. The US did not
change its policies and has now been censured both for its original
violations and its failure to comply with the original order.
The WTO objected to the fact that the US allowed gambling on its
own soil but not with foreign gaming companies via the internet.
This broke free trade rules, it said; it also said that the US had
ignored its first ruling.
The decision "vindicates all that we have been saying for years
about the discriminatory trade practices of the United States,''
Antiguan finance minister Errol Cort told the news agency
Bloomberg.
The
news is a boost to online gambling companies, whose shares rose in
value on the announcement. Online gambling has hit difficulties in
the wake of a new US law passed last autumn specifically banning
internet gambling.
The legal status of online gambling until last year was unclear.
The US Department of Justice had always interpreted the Wire Act of
1961 as covering internet betting when it banned inter-state
telephone betting. The US passed a more specific law last year, a
move which was criticised in the report.
"Since the original proceeding the United States had an
opportunity to remove the ambiguity and thereby comply with the
recommendations and rulings of the DSB [dispute settlement body],"
said the compliance panel report. "Instead, rather than take that
opportunity, the United States enacted legislation that confirmed
that the ambiguity at the heart of this dispute remains and,
therefore, that the United States has not complied."
The US had previously told the WTO that it would comply, and
asked for a "reasonable period of time" in which to do so. That
period lapsed in April 2006 and no action was taken, by then or
subsequently, to comply with the original order, though the US
claimed that a civil investigation into possible illegal activity
meant that it had complied.
The anti-online gambling law passed last year contains specific
exceptions for domestic inter-state horseracing gambling. It is the
permitting of domestic long distance betting while banning foreign
distance betting that the WTO objects to.
Last year saw a crackdown on internet gambling, with two British
businessmen connected with gambling companies put under arrest. The
then-Sportingbet chairman Peter Dicks was arrested but released,
while former BetOnSports chief executive David Carruthers is still
under house arrest in the US awaiting trial for offences under the
Wire Act.
Caribbean islands such as Antigua have become major bases for
the $16 billion-a-year online gambling industry, with many
companies operating services from there. It has become a major part
of the Antiguan economy, which is said to have suffered in the wake
of the US ban.
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