Tiny Antigua and Barbuda, one of the world’s smallest states, proclaimed victory over the United States Wednesday in a dispute over Internet gambling that could hurt the multibillion-dollar U.S. gaming industry.
Senior officials from the twin-island state, population 67,000, said the World Trade Organization had upheld its complaint that a U.S. ban on cross-border Internet gaming was a violation of international trade rules.
The Caribbean country says the ban is crippling its offshore casino industry which it has sought to build up to offset a decline in tourism.
“We are delighted. It is a great victory,” said Antigua’s high commissioner in London, Sir Ronald Sanders, who also represents his country at the Geneva-based WTO.
“It is also a victory for the WTO’s disputes procedures, because it shows that a small country can get redress within the system,” he told Reuters in a telephone interview.
U.S. to appeal
Richard Mills, a spokesman for the U.S. Trade Representative’s office in Washington, said, “We intend to appeal and will argue vigorously that this deeply flawed panel report must be corrected by the appellate body.”
Mills added that American commitments on services were ”clearly intended to exclude gambling when the United States joined the WTO in 1995.”
The verdict was given in a confidential interim report sent out only to the parties directly involved in the dispute.
Although gaming laws in the United States vary from state to state, the Department of Justice has declared that Internet gambling breaks a 1961 federal law outlawing the placing and taking of bets across state lines.
And in a move aimed at tightening the restrictions even further, the House has passed laws banning gamblers from using credit cards to pay for any Internet bets.
Antigua and Barbuda, which says online casinos provide jobs for young people who might otherwise be on the streets or have to emigrate, argues that the U.S. ban is a breach of WTO commitments to be open to services provided by other countries.
It sees the ban as mainly aimed at protecting the huge U.S. betting industry from foreign competition.
But the United States, the biggest single economy in the 146-state WTO, contends that Internet gambling is open to abuse by money launderers and opens a window for children to run up huge gaming debts with their parents’ credit cards.
Despite the ban, Internet gambling is a growth industry worldwide, with revenues jumping to some $6 billion last year from just $650 million in 1998, according to a recent report in The Wall Street Journal.
Under WTO rules it could be a year or so before Washington has to apply the findings. WTO trade judges will take an additional 30 days to issue a final ruling, which never varies much from the interim, and then the United States can appeal.