WTO: US Internet Gambling Ban Illegal, Orders Annual Trade Sanctions

On Dec. 21, the World Trade Organization issued its final ruling in a lengthy legal battle between Antigua and the United States over trade practices leaving no chance for appeal.

In October 2006, President Bush signed legislation passed by the United States Congress, the Unlawful Internet Gambling Enforcement Act of 2006, restricting the ability for banks and credit card companies to process transactions for off-shore Internet gambling sites. This law was in addition to the reams of state and federal laws already making Internet gambling illegal in most of the US. It was these laws that the tiny countries of Antigua and Barbuda raised objections about to the World Trade Organization (WTO) in 2003.

The WTO issued a ruling on their complaints in 2005, siding with Antigua, stating the United States had imposed artificial trade restrictions on competing nations to provide gambling services. In January 2006 the Bush administration appealed the WTO ruling, only to be shot down in April of 2006. The major stumbling block for the United States are exemptions from various laws for electronic betting on horse races, if the services are within the U.S. This was seen by the WTO as an unfair trade protection practice.

Victorious in its complaint, Antigua asked for annual concessions exceeding 3.4 billion dollars. The US appealed the concession amounts, stating that the figures were based on inaccurate assumptions and was several times the economic output of the two island nations roughly equal in size to Washington DC. The final decision released today in a 96 page report, agrees in part with the United States, after seeking economic figures from th ECCB and the IMF and considering the increased competition in the region, the WTO settled on a much lower amount.

Putting the figure at 21 million, the WTO awarded Antigua and Barbuda the right to suspend the TRIPS (Trade-Related Aspects of Intellectual Property Rights) agreement in an amount not to exceed 21 million dollars annually. The TRIPS agreement covers all international laws governing Intellectual Property. The ruling by the WTO could basically amount to a free ride for Antigua on matters of Copyright, Patents and Trademark infringement without recourse.

In a press release, Mark Mendel, the lead attorney representing the Antiguan government stated "I am pleased that the panel approved our ability to cross-retaliate by suspension of intellectual property rights of United States business interests. That has only been done once before and is, I believe, a very potent weapon." Mendel noted optimistically "$21million a year in intellectual property rights suspension going forward indefinitely is not such a bad asset to have. I hope that the United States government will now see the wisdom in reaching some accommodation with Antigua over this dispute and look forward to seeing efforts in this regard."

The entire report from the WTO can be accessed here.

Sources:

http://www.wto.org

http://www.antiguawto.com/