WTO: U.S. Can Keep Some Gambling
GENEVA (AP) -- The United States can keep some restrictions on
Internet gambling, a World Trade Organization appeals panel said
Thursday, but also concluded that some U.S. legislation
discriminates against foreign operators.
Both sides - Antigua and Barbuda and the United States - claimed
victory in the dispute over whether Washington should drop
prohibitions on Americans placing bets in online casinos.
In its 138-page report, the appeals panel said the United States
had demonstrated that the 1961 Wire Communications Act - which was
written to cover sports betting by telephone and has been used to
prosecute some Web site operators - "was necessary to protect public
morals or maintain public order."
But the panel found against Washington in another respect, saying
it failed to show that the Interstate Horseracing Act was applied
equally to foreign and domestic remote betting services, therefore
contravening international trade rules.
Mark Mendel, legal counsel for Antigua in the case, said the WTO
ruling means U.S. authorities will have to treat Antiguan online
casinos in the same way as traditional gambling outlets.
"At the end of the day, Antigua continues to win," Mendel told
The Associated Press. "It is clear cut. We won on all the major
But acting U.S. Trade Representative Peter Allgeier said the
United States had won the case and was entitled to maintain its
restrictions on Internet gambling.
"We are pleased that the appellate body has agreed with our
position that the U.S. gambling laws at issue here protect public
order and public morals," Allgeier said. "U.S. restrictions on
Internet gambling can be maintained."
"This report essentially says that if we clarify U.S. Internet
gambling restrictions in certain ways, we'll be fine," Allgeier
However, because the panel ruled that American laws discriminate
against foreign commerce, Washington will now have to provide
Antiguan gaming firms with fair access to the U.S. market, Mendel
said in response to U.S. claims of victory.
"Although a portion of the initial ruling was reversed by the
appellate group, the overall result remains substantially the same -
in Antigua's favor," Mendel said in a statement.
There is no further appeal to the ruling. Mendel said that
although the ruling relates only to Antigua, the precedent may have
Antigua filed the case before the WTO in 2003, contending that
U.S. restrictions on Internet gambling violated trade commitments
the United States made as a member of the 148-nation WTO.
U.S. trade officials disagreed, saying that negotiators involved
in the Uruguay Round of global trade talks, which created the WTO in
1995, clearly intended to exclude gambling.
Antiguan authorities also argued that restrictions barring U.S.
residents from betting at offshore casinos were harming their
country's efforts to diversify its economy. Antigua, a former
British colony in the Caribbean, has been promoting electronic
commerce as a way to end the twin-island nation's reliance on
tourism. The sector was hurt by a series of hurricanes in the late
Antigua's Finance Minister Errol Cort said that while the
government had not fully read Thursday's decision, "the U.S. was
found to be discriminating against Antigua and Barbuda."
"This is a very important day for Antigua and Barbuda and we are
all very pleased in respect of the ruling," Cort said. "It means
that once we have worked out the modalities with the USA, we will be
able to access the U.S. market."
Antigua's Internet gaming sector employs about 300 people, down
from a peak of 3,000 jobs. In 1999, Internet gaming accounted for 10
percent of the country's gross domestic product.
Mendel said the WTO decision should bring an end to U.S.
authorities threatening to subpoena or prosecute American companies
that choose to do business with Antigua offshore gaming
The current legal status of Internet gambling in the United
States is in dispute. In many states, gambling is banned or
permitted with restrictions.
The U.S. General Accounting Office has estimated there are 1,800
Internet gambling operations. Virtually all of them are based
outside of the United States, posing an enforcement problem for U.S.
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