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  Leisure

April 07, 2005

Antigua wins big in online gambling case

A landmark ruling from the World Trade Organisation today may yet open the way for Americans to gamble online legally, paving the way for potentially massive growth among off-shore "virtual" casinos around the globe.

The WTO today issued its long-awaited ruling in the trade dispute between Antigua, one of its smallest members, and the United States, its largest member, over cross-border online gambling and had both sides claiming victory.

The WTO appeal body ruling marks the end of a near-eight-year battle by the tiny Caribbean island for the right to host online gambling.

The United States had contended that internet gambling should be prohibited because it violates some state laws.

Last year, a WTO report confirmed a preliminary ruling, saying the US ban represented an unfair trade barrier. Washington appealed the ruling and said it would "vigorously" contest the ruling before the WTO's seven-member appeals body.

The WTO ruling could pave the way for new media opportunities for gaming operators in Antigua and many other smaller counties. Previously, US companies such as Citibank, Chase Manhattan, Bank of America, Clear Channel Communication, Discovery TV, Yahoo and MSN were discouraged from accepting media buys from online gaming products. The WTO determination is expected to end threats of prosecution from the US Justice Department to American companies who choose to do business with Antigua offshore gaming companies.

"This is a country-specific ruling, but it may have far-reaching implications," Mark Mendel, the lead counsel for Antigua, said.

The Americans maintained the opposite view. "This win confirms what we knew from the start - WTO members are entitled to maintain restrictions on internet gambling," Peter Allgeier, the acting US trade representative, said.

"US restrictions on internet gambling can be maintained," Mr Allgeier said. "This report essentially says that if we clarify US internet gambling restrictions in certain ways, we'll be fine."

In a classic David and Goliath story, the mighty US was pitted against Antigua, with a population of only 68,000 and which cannot even afford to keep a representative at the WTO's headquarters in Geneva.

But Antigua managed to hold its own against the world's largest economy, which is also the world's largest gambling market.

Antigua filed the case before the WTO in 2003, contending that US restrictions on internet gambling violated trade commitments the United States made as a member of the 148-nation WTO.

According to a 1991 list of industries that must be open to free trade, the recreation and entertainment sectors are fair game, the island state claimed. Moreover, Sir Ronald Sanders, Antigua's chief foreign affairs representative, and others have argued that it was no less than the Washington-based World Bank that advised Antigua to move into internet industries to diversify its fragile, tourism-based economy. Antiguan officials estimate that online casinos employ some 3,000.

 
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