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 Post subject: WTO Rules U.S. Web Gaming Ban Illegal
PostPosted: Fri Mar 30, 2007 8:07 pm 
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WTO Rules U.S. Web Gaming Ban Illegal

by Warren Giles
30 March, 2007


NEWS SOURCE: Bloomberg

The U.S. ignored a ruling that found it discriminates against foreign gambling companies by banning payments to gaming Web sites while allowing bets on its own soil, the World Trade Organization's highest judges said.

PartyGaming Plc shares jumped as much as 16 percent after the decision. Shares of SportingBet Plc, which said this week it plans to transfer its London offices to the Channel Islands because of U.K. regulation, climbed as much as 4.2 percent.

Antigua and Barbuda, a Caribbean nation of 80,000 people, challenged Bush administration efforts to close the estimated $12 billion global business to U.S. residents, who account for half of the market. The U.S. banned credit card companies from processing payments to betting sites such as SportingBet, Leisure & Gaming Plc, PartyGaming and Empire Online Ltd., which then ceased U.S. operations or sold them for nominal amounts.

Today's ruling ``offers hope to the global online gambling industry currently under siege by the U.S. Department of Justice,'' Antiguan Finance Minister Errol Cort said in an e- mailed statement. ``It vindicates all that we have been saying for years about the discriminatory trade practices of the United States.''

Appeal Rejected

Antigua, the smallest government ever to lodge a WTO complaint, scored an initial victory against U.S. online gambling restrictions when the WTO found in April 2005 that the U.S. had pledged to open the industry to competition 10 years earlier. Today's ruling rejects a U.S. appeal against that.

The U.S. agreed that today's ruling finds it failed to comply with the two-year old decision.

Still, the U.S. says the report allows it to maintain a ban on Internet gambling to ``protect public order and public morals'' as long as it doesn't discriminate against foreign companies, Gretchen Hamel, a spokeswoman for the U.S. Trade Representative's office in Washington, said in an e-mailed statement. ``We are currently reviewing our options,'' Hamel said.

The U.S. has argued that the prohibitions pre-dating the October law apply to both foreign and American betting services, and the WTO's decision only applies to gambling on horseracing, which is allowed to discriminate against foreign companies.

Ambiguity Remained

The U.S. ``had an opportunity to remove the ambiguity'' between legalized betting on horse racing across state borders and bans on other forms of gambling, the WTO judges wrote in today's 41-page decision. ``Instead, rather than take that opportunity, the U.S. enacted legislation that confirmed that the ambiguity at the heart of this dispute remains,'' today's report concludes.

The U.S. says that its latest law isn't covered by the WTO ruling and said that its 1995 commitment to open gambling to foreign companies was an oversight by the Clinton administration.

Income for the 32 registered online casinos in Antigua and Barbuda has fallen to $130 million a year from $1 billion in 2000, the Antiguan government says. The country developed online gambling to boost a tourism-dependent economy after several hurricanes in the 1990s.

Antigua successfully argued in its complaint that the U.S. protects a domestic gambling industry while failing to live up to its international commitments.

Credit Card Ban

Charlie McCreevy, commissioner for the European Union's internal market, labeled the U.S. law ``a protectionist measure'' on Jan. 30, saying the EU should complain to the U.S. after Congress passed the legislation barring credit card companies from processing payments. President George W. Bush signed the measure into law on Oct. 13.

At the time, U.K. Culture Secretary Tessa Jowell compared the U.S. law to the American alcohol ban of the 1920s, saying the measure may force online gambling underground into an unregulated black market.

``This is a smashing success for Antigua in every possible way,'' John Ashe, the Caribbean island nation's ambassador to the WTO in Geneva, said in a statement. The ruling clears up ``any lingering doubt that Antigua has obtained a clear and convincing win over the United States and it is now time for the United States to meet its international trade obligations.''

Antigua may seek sanctions in the form of withdrawing intellectual property protection for U.S. trademarks or copyright. Known as ``cross-retaliation,'' such sanctions are legal at the WTO when an economy can't afford to impose sanctions in the form of higher customs duties on goods.


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PostPosted: Mon Apr 02, 2007 8:27 pm 
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April-01-2007
WTO Ruling: The U.S. Lost Again. Now What...
By Hartley Henderson

On Friday, the WTO issued its ruling against the United States in the dispute with Antigua over remote gambling. The United States government hinted in January that the WTO was going to rule in Antigua's favour, but there really was never a question which way the ruling would go. In 2005 the WTO ordered the United States to either ban all remote gambling in the country or open its doors to remote gambling from Antiguan based companies. The United States did absolutely nothing to stop domestic remote gambling, but thumbed its nose at the WTO by passing the UIGEA and then announcing it was in compliance with the WTO ruling. Clearly the U.S. government knew that this ploy would not work, but was just trying to buy time.

So what's next? The U.S. can appeal one more time, as they will almost certainly do, but by June or July they will be out of appeals and will be forced to make a decision. Their options are to ban all remote gambling in the United States, open their doors to Antiguan sportsbooks and casinos or continue to ignore the ruling and suffer the consequences. Clearly stopping all remote gambling in the U.S. will not happen. The horse racing industry, which lobbied so hard for the provisions given it under the Interstate Horse Racing Act, will not just relinquish those rights in an effort to appease the government. It is also highly unlikely that the U.S. will simply open its doors to Antiguan gambling companies given all the rhetoric it spouted in the past about morals. One thing the United States clearly has a problem doing is admitting defeat, particularly against countries it considers its inferiors. Thus, the likely option the U.S. will choose is to ignore the ruling, announce the WTO is wrong and essentially say "do to us as you will." It wouldn't be the first time the U.S. has chosen this route, as it ignored several rulings by the WTO in favour of Canada with regards to the softwood lumber dispute. And in the end Canada gave the U.S. many concessions to simply end the ongoing fight.

Unlike with Canada, however, the U.S. has a big problem in just ignoring the WTO ruling with regards to Antigua. Japan, Chinese Taipei, the European Union, Canada and Mexico all reserved the right to participate in the panel as an interested third party and the reason seems obvious. Each of those countries (The EU representing several European countries) had disputes with the United States at one time or another, in which the WTO ruled in favour of the United States to the chagrin of those other countries. With Japan this related to carbon steel and apples; with Chinese Taipei it related to steel; with Canada it related to beef among other areas and very recently the U.S. won a WTO dispute against Mexico over beverage taxes. And with regards to the European Union, the United States won several disputes with European countries. Each of those other countries abided by the WTO decision and complied with the ruling. In fact the United States has by far and away been the biggest benefactor of WTO rulings, and Antigua could be a test case to see what the United States will do if the roles are reversed. If the U.S. chooses to just ignore the WTO ruling favouring Antigua, then the other countries may decide from the U.S.'s actions that WTO rulings are not applicable and as a result may just decide to stop abiding by the previous findings.

Furthermore, countries may also be interested to see what can be done against the United States in a case where the U.S. ignores rulings. There has been much talk that under the rules of the WTO, Antigua may be able to override U.S. copyright laws and intellectual property rights in an effort to enforce compliance. Clearly Antigua would prefer this as a last resort, but should they do so it may give fodder to other small countries to do the same. Without doubt this should have American companies quaking in their boots. After all, why would companies bother to spend time and money developing products in the United States if they get no copyright protection to ensure a profit? It would also make the WTO appear as a toothless tiger, which in the end would hurt the United States the most.

It is uncertain how the U.S. will proceed, but one thing is for sure: Simply disregarding the WTO ruling would be a big mistake by America.

04-01-2007
Hartley Henderson
Majorwager.com
henderson@majorwager.com


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PostPosted: Wed Apr 04, 2007 8:42 pm 
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WTO Criticizes U.S. Internet Gambling Restrictions

The organization said the U.S. ban is acceptable only if restrictions are placed equally on domestic practices, including off-track betting on horse races.

By K.C. Jones
InformationWeek

April 4, 2007 06:26 PM


The World Trade Organization claims the United States is not complying with an earlier ruling on Internet gambling.

A compliance panel issued a report last week suggesting the United States failed to comply with a dispute settlement body's earlier recommendations and rulings, while unfairly restricting online casinos.

The panel stated that the U.S. ban on Internet gambling is acceptable only if restrictions are placed equally on domestic practices, including off-track betting on horse races.

The islands of Antigua and Barbuda sought the ruling from the WTO, saying the U.S. online gambling ban has hurt its economy.

The Caribbean country successfully argued that the United States is violating trade agreements by making exceptions for off-track betting.

Some have argued that the U.S. banned Internet gambling, not to protect Americans but to promote real-world casinos in places like Las Vegas.

U.S. Rep. Barney Frank, a Massachusetts Democrat, has said he is considering legislation to repeal the ban.

The ban makes it illegal for U.S. banks and credit card companies to process gambling payments.


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PostPosted: Tue Apr 17, 2007 2:41 pm 
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WTO expects US to implement Internet gaming ruling

Tuesday April 17 2007
ANTIGUA SUN


Director-General of the WTO, Pascal Lamy, speaking to a closed session of a meeting with Caricom Ministers of Trade last week, observed that the preservation of the rules-based multilateral trading system on which the WTO is based, would ensure that, over time, the US would move to implement the rulings and recommendations of the WTO Dispute Settlement Body (DSB).

Responding to a question from Antigua & Barbuda’s Minister of Finance and the Economy, Dr. Errol Cort, who wanted to know how the WTO intended to ensure that the rights of its smallest members were treated in the same manner as its largest, Lamy opined that it was in the best interest of the major trading nations of the world to ensure that the organs of the WTO were seen as fully functional and, in the case of its dispute settlement system, that its rulings and recommendations were respected and fully implemented.

Lamy also noted that, in his view the US had unfailingly implemented the rulings and recommendations of the DSB in all instances, even in those cases where such rulings had gone against it. This, he noted, was incumbent upon all WTO members if for no other reason but to ensure the integrity of the organisation’s institutions.

Meanwhile, Reuters news service has reported that the Chairman of the US Congress Financial Services Committee, Massachusetts Democrat Barney Frank, planned to introduce a bill within the next two weeks to end a ban imposed last year on online gambling in the United States.

The bill in question, which would face an uphill battle, is intended to repeal the ban on the use of credit cards. According to the legislation that was signed into law by President Bush last year, credit card firms are forbidden from taking money for bets on online sites.

“We will be keeping a close watch on developments surrounding the anticipated introduction of the Frank Bill, on which we anticipate that there will be no major progress in the near term,” Minister Cort stated.

“However, my government is of the view that it is a step in the right direction, given that the current law has had a deleterious effect of online gaming everywhere to the point where the European Union’s Internal Market Chief, Charlie McCreevy, has hinted that he may challenge the ban at the WTO,” he added.

The meeting in Jamaica between Caricom trade ministers and the director-general of the WTO was also attended by Permanent Representative to the WTO Ambassador Dr. John Ashe, Permanent Secretary Ambassador Colin Murdoch and Trade Co-ordinator Ambassador Dr. Clarence Henry.
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