Antigua, U.S. Both Claim Win in WTO Gambling Row

By Richard Waddington
April 7, 2005 12:44 PM ET

GENEVA (Reuters) – Both tiny Antigua and the United States claimed to have come up trumps on Thursday in a row over whether Washington can ban U.S. punters from gambling in offshore Internet casinos.

U.S. officials and lawyers for Antigua and Barbuda said a lengthy ruling by the World Trade Organization's (WTO) top court was effectively in their favor in a dispute brought by the Caribbean twin island state.

However, the ruling by the WTO's Appellate Body, whose decisions are final, reversed several of the earlier findings of a panel of trade judges, who had come down firmly on the side of Antigua.

A top U.S. official said Washington should have little trouble in adapting its laws to meet the remaining criticisms without dismantling restrictions needed to fight "illegal gambling...money laundering and organized crime."

"U.S. restrictions on Internet gambling can be maintained," said acting U.S. Trade Representative Peter Allgeier in a statement.

"By reversing key aspects of a deeply flawed panel report, the Appellate Body has affirmed that WTO members can protect the public from organized crime and other dangers associated with Internet gambling," he added.

But lawyers for the Caribbean state were equally adamant that the 127-page verdict was a victory for them and that the decision would "pave the way for new...opportunities for Antiguan gaming operators."

"This is a landmark victory for Antigua as the first, and smallest, WTO member to defeat the United States, the largest member, in this well-respected international trade court," they said in a statement.

RENEGING

The case dates from 2003 when Antigua complained to the WTO that the United States was reneging on agreements it undertook with the launch of the Geneva-based trade body in 1995 to open up its services markets.

The Caribbean state, with a population of just 67,000, has been seeking to build up the Internet business as a way to make up for sharply declining tourism revenues. It says gambling gives employment to some 3,000 people who would otherwise be on the streets or have to emigrate.

But the United States, where federal law bars the placing of bets across state lines by electronic means, had argued that it had never meant the services' liberalisation to include gambling, and that, in any case, WTO rules allow states to restrict trade on moral grounds.

The Appellate Body accepted much of the U.S. reasoning. But it said that when it came to betting on horse-racing, there appeared to be discrimination between foreign and local operators, which violated trade rules and had to stop.

Given the highly political nature of the case, U.S. officials had long warned that it would be extremely difficult to get the U.S. Congress to accept a significantly adverse ruling by the WTO.

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