Deadline for WTO decision on Antigua internet gambling set for April 3

Ambassadors from tiny Caribbean island meet with US Congressional member Pete Sessions

Antigua & Barbuda’s Ambassador to the World Trade Organization, Dr. John W. Ashe, met with Congressman Pete Sessions on Tuesday to discuss the current status of Antigua & Barbuda’s WTO Internet gaming dispute with the United States related to online gambling.

The tiny island had filed a complaint with the WTO two years ago on grounds that the United States had impeded its prospering online gambling industry.

Several leading internet gambling firms, including BetCorp's BetWWTS.com (endorsed by Gambling911.com), Sports Off Shore, World Sports Exchange and Intertops.com have long been based in Antigua.  The vast majority of licensed gaming businesses belong to online casinos.

The United States considers internet gambling "illegal" based on a 1960's "wire act" that makes it unlawful for individuals or businesses to accept bets via telephone (or wire) from US citizens.  Since that time, the world has become wireless and the internet did not exist.

“The primary objective of the meeting was to brief the Congressman on the status of our WTO dispute with the United States,” Ambassador Ashe said Tuesday.

“And with the 3 April deadline for the US to inform the WTO membership of the steps it has taken to comply with the recommendations of the WTO’s dispute settlement body in this dispute, a sense of urgency permeated our discussions,” he added.

Up to this point, the US government has shown little indication of complying with the WTO decision.  And while sanctions imposed by a tiny nation of just over 65,000 people might have little impact on the United States from a monetary standpoint, the implications could stretch much further than that.

The ruling offers a stark example of the challenge of regulating Internet commerce and could place the United States at odds with some larger allies that have embraced online gambling, writes Hiawatha Bray of The Boston Globe.

Mark Mendel, the American attorney representing Antigua, said failing to resolve the dispute would leave the United States in the embarrassing position of appearing to bully a small nation that is playing by the rules. That could damage the authority of the World Trade Organization, the global trade body that the United States worked so hard to establish. ''If they undermine its strength and its credibility by basically refusing to adhere to a decision," said Mendel, ''then they've kind of told the rest of the world what the WTO is really for."

Antigua is considering retaliatory moves that could enable the tiny nation to punch above its weight. There's no appetite for slapping trade sanctions on US goods; that would hurt Antiguan companies and consumers far more than Americans. Instead, the country may refuse to enforce American patents and trademarks. This would make it possible for Antiguan-based companies to produce knock-offs of American intellectual property, like video and music recordings or computer software. Such a tactic would get the attention of major US firms like Microsoft Corp. and entertainment titan Time Warner Inc. It would also put tiny Antigua's trade war against the United States on front pages around the world.

Furthermore, ignoring the decision would allow countries such as China to give the United States a taste of its own medicine.

The Bush administration said Thursday that it is filing a trade case against China before the World Trade Organization in a dispute involving American auto parts.

U.S. Trade Representative Rob Portman said the administration was accusing China of violating global trade rules by imposing high taxes on auto parts from the United States and other countries.

"As a mature trading partner, China should be held accountable for its actions and be required to live up to its responsibilities," Portman said.

Ignoring the WTO decision related to Antigua's online gambling industry would no doubt provide China with ammunition against the US stance.

But it's not just about the United States government failing to provide a strategy detailing how they will abide by this decision.  Over the past month, anti-online gambling zealots the likes of Arizona Republican Senator Jon Kyl and his colleagues, Bob Godlatte and Jim Leech, have aggressively been trying to pass legislation that would make internet gambling illegal based on existing laws.  They have gone as far as attaching amendments to proposed bills that have absolutely nothing to do with online gambling.

The Washington-based publication The Hill carried an interesting article this week that examines the irony of a political situation in the USA where some politicians are being influenced to vote for proposed online gambling prohibition as a reaction to the Abramoff lobbying scandal.

Abramoff has been accused of working behind the scenes in past years to defeat anti-online gambling legislative attempts.

The Hill points out that the same Internet gambling legislation Abramoff fought so hard to defeat on behalf of a client that helped states conduct lotteries over the Internet now includes an exemption or "carve out" to protect those same lotteries!

Abramoff’s infamy and legal woes are currently driving anti-gambling legislation across Capitol Hill, even though one of the most prominent bills includes language that would protect his former client.

All three politicians have been trying to pass online gambling bills since 1998, none of which have come to fruition, though the moves have forced some banks to reconsider doing business with internet gaming firms.  Poor credit card acceptance rates are commonly cited as having the most negative impact on the web-based industry, which has had to rely heavily on intermediary money transfer companies, the vast majority of which have gone broke over recent years. 

And while powerful money transfer company, NETeller, has emerged from the online gambling industry, even trading publicly on the London Stock Exchange, its main competitor, PayPal, was pressured to stop dealing with internet gaming firms over three years ago.  They recently entered back into the arena by partnering with overseas companies, including BetFair, which do not accept wagers from US citizens.

The bright spot in all of this might very well be US Congressman Pete Sessions, who is Republican and represents Dallas, Texas.  He is well known for his pro-business record in the US Congress. He recently received the 2005 Spirit of Enterprise Award from the United States Chamber of Commerce in recognition of his support for a pro-business legislative agenda during the second session of the current (108th) Congress.

The US Chamber of Commerce issues the Spirit of Enterprise Award each year based on rankings it gives lawmakers for key business votes.

Congressman Sessions scored 93 per cent for his voting record on the Chamber’s 2005 key votes, including votes on class action reform, bankruptcy reform, and free trade, including the US-Dominican Republic-Central America Free Trade Agreement. The congressman has received the Spirit of Enterprise Award from the US Chamber of Commerce each year he has served in Congress.

Ambassador Ashe, who was accompanied by Antigua & Barbuda’s legal adviser on the WTO dispute, Mark Mendel, also updated Caricom’s permanent representatives to the Organisation of American States/Ambassadors to the US on the meting with the congressman.

He urged them to reinforce Antigua & Barbuda’s concerns with the US administration’s response to date to the WTO’s ruling, in their individual interaction with the members of the US Congress and the Bush administration.

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Christopher Costigan, www.gambling911.com

Originally published March 30, 2006 10:24 am ET