Antigua & Barbuda Prevail Over US in WTO Ruling to Permit Online Gambling

On March 24, 2004, a WTO panel made its interim finding that the twin island nation of Antigua and Barbuda (population 67,000) was successful in its complaint against the United States: "United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services" (WT/DS285). The complaint alleged that US federal and state legislation making it an offence for US banks to process online gambling transactions violates the General Agreement on the Trade of Service (GATS). Such US legislation effectively prohibits all supply of gambling services from outside the US, even though US companies carry on gambling businesses both domestically and internationally. In effect, argued the successful complainant, the US had engaged in anti-competitive protectionism of its domestically-owned gambling industry. While the text of the decision remains confidential, the Office of US Trade Representative Robert Zoellick has vowed to appeal the ruling, on the grounds that gambling was excluded from GATS by the US. Although the ruling itself, even if upheld on appeal, is unlikely to change US policy on what many see as a morality issue, Antigua may be able to use the ruling to assert tariffs against US business which imports 90% of all goods and services sold on the islands. The Antigua strategy could be used as a model for other WTO member nations in the face of possible future US protectionist measures against IT outsourcing. Under WTO rules, the final panel report should be circulated by May 26, 2004, and any appeal decision should be issued by August 26, 2004. In a later development, Google and Yahoo, two of the most widely-used Internet search engines, announced that they would cease to carry online gambling advertisements. For WTO documents filed under the complaint, follow the Antigua & Barbuda links at: http://makeashorterlink.com/?W24323208. For the March 26, 2004 New York Times article, "Trade Group Says U.S. Ban on Net Gambling Violates Global Law, visit: http://www.nytimes.com/2004/03/26/technology/26gamble.html. For the Antigua & Barbuda article, view: http://makeashorterlink.com/?C56322208. For a follow-up analysis by MSNBC, visit: http://msnbc.msn.com/id/4647236/. For a news story on the US DOJ's moves against online gambling, see: http://www.nytimes.com/2004/04/05/technology/05yahoo.html. Summary by: Nicholas Whalen