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Posted by: jetset at December 22, 2007, 6:23 am

Topic: Online gambling case pits Antigua against U.S. and challenges WTO Forum: Casino Meister

US urges Antigua to delay WTO sanctions on Internet gambling

WASHINGTON (AFP) — The United States Friday urged Antigua to hold off on imposing sanctions authorised by the WTO in a dispute over online gambling, saying Washington was revising its WTO commitments.

US Trade Representative (USTR) spokesman Sean Spicer advised Antigua to delay any action after an arbitrator for the Geneva-based World Trade Organization allowed the Caribbean nation to impose sanctions worth 21 million dollars a year.

Spicer said Washington has initiated a formal process at the WTO to revise its commitments and is in talks with Antigua and six other WTO members that have claimed to be affected.

"We would expect that Antigua would not suspend its WTO commitments to the United States while that process is underway.," Spicer said.

"Once the process of clarifying the US schedule of commitments is complete, any issues in our bilateral dispute with Antigua will be moot, and there will no longer be any basis for suspending WTO commitments."

The action marked the latest twist in a dispute with Antigua and Barbuda, a tiny Caribbean nation that complained in 2003 that the US ban on Internet gambling iolated WTO rules.

Antigua has prevailed in its bid at the WTO to have the US ban declared improper. But US officials said earlier this year that Washington was not bound to change its laws to open its borders to the Internet gambling industry because of an "oversight" in a decade-old trade agreement.

Antigua had asked for sanctions worth 3.44 billion dollars, while Washington argued this was "patently excessive" and more than three times the size of the Antiguan economy.

Antigua, with a population of about 70,000, is a centre for offshore Internet gaming operations and attracts large numbers of US residents to its online casino-style games and betting services.

US officials announced in May they were submitting documents to clarify Washington's commitments. They cited a lack of clarity in the 1993-1994 negotiations under the Uruguay Round of international trade talks that led to the General Agreement on Tariffs and Services (GATS), which took effect in 1995.

On Monday, US officials said Washington would widen access to some of its services to compensate the European Union, Japan and Canada to settle the WTO dispute on Internet gambling with those members.

And Antigua's lead legal counsel, Mark Mendel, commenting on the $21 million award in a press conference, predicted that in several years states [in the USA] will begin to operate online poker rooms. If this happens, Mendel says he will again go after the U.S. through the WTO for Antigua and Barbuda.

But Card Player magazine says there are questions about whether he would be able to seek compensation through the WTO because of the U.S.'s decision to revise a portion of the GATS that covered recreational activities, including online gambling. The official stance of the office of the U.S. Trade Representative (USTR) is that it wasn’t aware that parts of the GATS would cover online gambling, and that's why it decided to revise the agreement instead of comply with arbitrators' rulings.

In May, the USTR announced that instead of complying with the WTO panel’s ruling by opening its market to online gambling companies, it would instead revise portions of the GATS that it signed in 1995. Although member countries have the right to do this, no country has ever performed this manoeuver.

The revision of the GATS agreement is still being processed through the WTO. The USTR says that once this is complete, gambling will be excluded from the U.S.’s commitments to the WTO, and [therefore] the U.S. will no longer be out of compliance with the WTO ruling.

What this means is that Mendel may not have a case, because the U.S. will no longer have to submit to WTO rules concerning the online gambling industry.

Therefore, if states began to open online rooms or any other form of online wagering, the U.S. would still have the right to stop its citizens from accessing online gambling and poker companies located off shore with no fear of ramifications from the WTO.

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