Antigua Makes Compromise Offer to United States on WTO iGaming Case
The 11-year old World Trade Organization dispute over online gambling between the United States and the tiny island nation of Antigua & Barbuda has resurfaced. Antigua has won several legal battles against the U.S. at the WTO world court, but has been unable to enforce a series of WTO rulings for over a decade.
Recently, Antigua and Barbuda elected a new prime minister, Gaston Browne. According to several reports, the new prime minister has contacted the United States government about ending the ongoing trade disagreement.
Gaston Browne Made an Offer
Full details have not been released, but Prime Minister Gaston Browne has asked for a $100 million settlement, along with other considerations from the world’s largest economy.
Intellectual Property Watch got its hands on an unreleased statement from an Antiguan government source which said that Prime Minister Browne’s offer “represents a significant concession to the United States from earlier proposals“. The interior memo went on to say Antigua’s offer might sound exorbitant, but the $100 million price tag “represents but the slightest fraction of the harm done to the Antiguan economy by the failure of the United States to observe its obligations.”
How the Case Began
In March 2003, Antigua and Barbuda challenged three U.S. federal anti-racketeering laws and the four state laws as “barriers to trade” in “cross-border gambling services”. The three federal statutes challenged were the 1961 Wire Act, the Travel Act, and the Illegal Gambling Business Act.
Antigua decided to take its case to the World Trade Organization, a Geneva, Switzerland-based international commercial agency with 150-member states. The WTO is supposed to settle international commercial disputes between member nations. Each of the 150 member states, including the United States and Antigua, signed treaties in which they agreed to abide by decisions reached in WTO court.
The GATS Treaty
Antigua’s case went further, though. Their case cited an agreement signed by the U.S. federal government just a few years before–the General Agreement on Trade in Services or “GATS” Treaty–which was supposed to regulate trade in services. Antigua contended that, under the GATS treaty, services like online gambling operations were included.
Antigua argued that the three US anti-racketeering laws prevented the supply of gambling and betting services from Antigua-based online gambling providers to US customers. Under the GATS, the United States has the right to bar online gambling from Antigua, but only if the US bars the same practices from operators in its own country. Because the US federal government allows online gambling on lotteries, horse racing, and fantasy sports, the GATS agreement stipulates that it must allows offshore operators to do the same.
Online Gambling Blocked by US Agencies
Antigua is a tiny country, so a larger part of its economy comes from the licensing, regulation, and taxing of online gambling portals. US authorities enforcing laws to Antigua’s detriment, while allowing US gaming interests to take wagers, represented a violation of GATS to the detriment of the Caribbean nation, and it should be stopped–or that’s how Antigua argued before the WTO.
The United States’s lawyers had a different stance. They argued that the United States does bar online casinos, sports betting, and poker rooms. For that reason, they should be able to ban Internet casinos, sportsbooks, and card rooms based in Antigua and Barbuda. This is very much the argument being made by Senator Lindsay Graham and Representative Jason Chaffetz in the U.S. Congress currently, citing the same law (the Wire Act). In either case, the interpretation of the Wire Act depends on an open-ended one or a limited one.
Remarkably, Antigua won its case before the WTO. That body found that the U.S. had violated international law by enforcing laws against another country, while giving its own interests a free pass. Under WTO treaties that the US had signed, Antigua was due financial and legal redress. Yet the Bush Administration refused to comply by the WTO ruling.
WTO Grants Antigua Piracy Rights
After several years of the U.S. refusing to abide by the WTO ruling, that organization gave Antigua and Barbuda the right to set up “piracy” sites to sell U.S. intellectual property. The decision would allow Antigua to set up websites to sell copies of US-created music, TV shows, and films “to the rest of the world”. They could sell up to $21 million per year, to compensate them for the damage done to their economy by the US attitude.
This is why “Intellectual Property Watch” is so concerned by Antigua’s WTO case. Suddenly, US entertainment and artistic companies would be punished for the intransigence of the US federal government. As the anti-piracy messages on DVD and blu-ray disks mention, pirating intellectual property takes money out of the hands of the people that produce entertainment–it is not a victimless crime. For that reason, Antigua was reluctant to go down that route, but instead continued to negotiate with the US government. Yet these were the kind of economic sanctions that the US government has imposed on rogue states for decades.
Now, the new Antigua government hopes to settle the dispute. Unfortunately for the Caribbean nation of 91,000-plus citizens, the Obama Administration has been just as unwilling to negotiate as the Bush Administration was. Now it is time to see if the U.S. government is ready to comply with international law, or whether the dispute will continue.