Antigua vs U.S.A. Round Three
Published: Friday, June 24, 2005 Online-Casinos.com
ANTIGUA vs U.S.A. ROUND THREE
Islanders seeking strategic alliances
The Financial Times reported from London this week that the Caribbean island state
of Antigua and Barbuda is looking at “strategic alliances” with UK companies
to boost its online gambling industry, as it fights a clampdown from US authorities
who apparently consider internet betting to be illegal.
Antigua is keen to benefit from the recently passed UK Gambling Act as a possible
path that could bring more clarity to murky legal and trade controversies that
threaten the industry.
The island is one of several offshore tax havens used by internet gaming operators to avoid the regulatory perils of markets such as the US and to enjoy more lenient rates of tax.
“The UK wants to be a leader in internet gaming,” said Kaye McDonald, a director of Antigua's Financial Services Regulatory Commission. “We're looking at all future implications of the UK law in consultation with online gaming operators.”
Antigua has tried to attract online gaming operators keen to target the US market. In the next 12 months the Caribbean island state says it is to form a marketing corporation to represent the internet gaming industry as well as tourism and financial services.
“My guess is that if you're a listed company [in the UK] and you want to take bets from outside the UK then this is why Antigua is offering its services,” said Peter Dubens, the chairman of UKbetting, a British-domiciled internet gaming operator that is listed on the UK market. The company has not established an offshore operation and would not target the US market until the legality of the industry had been clarified, he added.
In a double-edged ruling, the World Trade Organisation found that some of the US measures (on moral protection grounds) were justified but ruled that they had not been applied fairly. However, Antigua contends that such prohibitions would have to be applied to all forms of “remote betting”, including horse racing and buying lottery tickets online, which are legal in some US states.
Antigua filed a complaint with the WTO in 2003 after seeing its online gaming industry decline by as much as 60 per cent.
Although US federal authorities consider internet gambling illegal, US gamblers account for 50-60 per cent of the $12bn global industry. Over the past decade US legislators have failed despite several attempts to pass a law that explicitly bans internet gambling, but the Department of Justice has stifled the industry by attacking banks that take credit card payments and media outlets that accept advertising from online gaming operators.
At the height of the industry, about 120 online gaming operators once did business in Antigua but that has fallen as low as 22 since the US crackdown. the FT report claims.
Mark Mendel, lead attorney for Antigua, accused the US of dragging its feet in complying with WTO rules and said the legal wrangling could continue for four or five years.
