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Antigua wins big in online gambling case
By Steven Downes, Times Online
http://business.timesonline.co.uk/article/0,,9070-1558865,00.htmlA landmark ruling from the World Trade Organisation today has opened 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.
It 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.
But the WTO’s ruling today again favoured Antigua.
The WTO ruling is anticipated to 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 subpoenas or 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.
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.
more… http://business.timesonline.co.uk/article/0,,9070-1558865,00.html
Best Regards,
Great news. Here’s the rest of the article. That last paragraph is a very interesting statement. Who is going to list on Google first?
“The impartial dispute resolution machinery of the WTO has functioned as expected,” Mr Mendel said today.
“Justice has been served and potential compliance issues facing various US corporations and the US Department of Justice will now be resolved in a manner favourable to fair and responsible international commerce.”
The Antiguans argued that it is inappropriate to treat businesses that conduct transactions online as if they are unequal to or somehow less credible than traditional brick-and-mortar operations. Additionally, it was underscored that it is inappropriate for the US government to assume an industry lacks integrity in the absence of objective evidence.
No US federal law prohibits gambling, which is regulated by state law. But in many states, gambling is banned or permitted with restrictions. Some site operators have been prosecuted under the 1961 Wire Communications Act, which was written to cover sports betting by telephone.
The US General Accounting Office has estimated there are 1,800 internet gambling operations. Virtually all of them are based outside of the United States.
The US Trade Representative office in Washington tonight claimed it would only need*to clarify one narrow issue concerning internet gambling on horse racing, but that it would not be seeking law changes that might*weaken US restrictions on internet gambling.
“US law stands. Internet gambling is not legal in the United States,” a source in Washington said.
“The WTO said that we can use public order and public morals clauses to exclude this.”
Antigua, however, maintains that*aspects of US practice that discriminate against offshore operators will no longer be possible.
“Under no circumstances can it be said to be the case that US law will not have to change,” said Mr Mendel.
“The US had to show that what they are doing is not discriminatory, and they failed to do that.
“We now expect that major internet search engines, including Google and Yahoo, financial institutions and credit card service providers will be required to accept advertising from Antiguan internet gaming sites as they do currently with US gaming interests, including hundreds of American casinos and state lotteries.”
:Partier:Thanks Mark!:Partier:
This is fantastic news. I hope it does cause some positive changes for US webmasters and reopen marketing venues.
:guitar: :guitar:No problem. This is very exciting news.
This is fantastic news. I hope it does cause some positive changes for US webmasters and reopen marketing venues.
I wouldn’t expect any dramatic changes just yet, without some resistance from the US Govt. It’ll be interesting to see if any company will act on this now. I suspect some of the more aggressive companies like a Yahoo may start allowing some ads, but who knows. We’ll hope for the best.
At the very least, it sheds a more positive light on the industry.
Regards,
Great news, Thanks Mark.
“We now expect that major internet search engines, including Google and Yahoo, financial institutions and credit card service providers will be required to accept advertising from Antiguan internet gaming sites as they do currently with US gaming interests, including hundreds of American casinos and state lotteries.”
Does anyone think the information about financial institutions and credit card companies may lead to it being easier for players to fund accounts in the future? Many US players don’t like banking off shore with places like Neteller.
Do not get too excited guys. The U.S. is saying that the WTO ruled in their favor.
http://www.thoroughbredtimes.com/todaysnews/newsview.asp?recno=53903&subsec=1
Well which is true then? :3eyes:
well I’ll believe we can ad on yahoo/google when they’re cold greedy little hearts are charging me $25 a pop again.
:kisser: me first, and then be gentle ….
Thanks Mark for the great news. This is certainly a step forward in the right direction for the online gambling industry. Still from everything I have read there is still some uncertainy of what move the US gov will try to take.
The ruling is bad for the online gambling industry, even if it did rule that the US had to modify a few laws in order to meet the terms of the GATS agreement.
The most critical issue is that the WTO agreed that the United States had a right to defend “moral and public order” – which is all the government needs to justify their decision to continue playing games with everyone.
In my not-so-humble opinion, this is a very, very bad result for the online gambling industry as far as the US is concerned.
In paragraph (vi) towards the bottom of the findings report, it reads..
“that the United States has demonstrated that the Wire Act, the Travel Act, and the Illegal Gambling Business Act are measures “necessary to protect public morals or maintain public order”, in accordance with paragraph (a) of Article XIV, but that the United States has not shown, in the light of the Interstate Horseracing Act, that the prohibitions embodied in those measures are applied to both foreign and domestic service suppliers of remote betting services for horse racing and, therefore, has not establishedthat these measures satisfy the requirements of the chapeau;”
The US currently allows remote gaming under the IHA.
The US would probably have to repeal the IHA in order to have a case under the public morals provision. It’s unlikely that the government will shut down these horse tracks as their business is huge. Furthermore, I doubt the horsetracks will go down lightly.
The panel is basically saying, “You had a case for protecting your public morals but since you offer remote gaming under the IHA you have lost the ability to raise this case.”
But who knows, I’m sure the US will come up with something to get around this anyway. Definitely still up in the air.
Best Regards,
I think you will find the US doesn’t give a Hoot about the WTO and we will see they will use it when filing complaints against other countries and will ignore any complaints against them.
Brian
Thank you for posting this Mark.
I was wondering in Amsterdam whether this would be posted and get appropriate attention.
It is a huge move forward, but I do expect the US to weasel out of it as much as they can, as they do with most of these progresses made.
It is part of the process though, and another score for us.
Go Antigua! Go Barbuda!
