So Who Really Won In The WTO Dispute?
Published: Friday, April 08, 2005 Online-Casinos.com
SO WHO REALLY WON IN WTO DISPUTE?
Antigua and The USA both claim victory
Both sides in the USA vs Antigua WTO dispute were claiming victory yesterday
following the release of the long awaited appeal hearing on Antigua's claim that
US restrictions on Internet gambling went against its WTO agreements.
According
to the Associated Press assessment, the United States can keep some restrictions
on Internet gambling, the World Trade Organisation appeals panel found, but it
also concluded that some U.S. legislation discriminates against foreign operators.
Both sides — the twin-island nation of Antigua and Barbuda in the Caribbean
and the United States — claimed victory in the dispute over whether Washington
should drop prohibitions on Americans placing bets in online casinos.
In
its 138-page report, the appeals panel said the United States had demonstrated
that the 1961 Wire Communications Act — which was written to cover sports
betting by telephone and has been used to intimidate some Web site operators —
"...was necessary to protect public morals or maintain public order."
But the panel found against Washington in another respect, saying it failed
to show that the Interstate Horseracing Act was applied equally to foreign and
domestic remote betting services. Unequal application of the law would contravene
international trade rules.
Mark Mendel, legal counsel for Antigua in the
case, said the WTO ruling means U.S. authorities will have to treat Antiguan online
casinos in the same way as traditional gambling outlets.
"At the
end of the day, Antigua continues to win," Mendel said. "It is clear
cut. We won on all the major points."
But acting U.S. Trade Representative
Peter Allgeier said the United States had won the case and was entitled to maintain
its restrictions on Internet gambling.
"We are pleased that the appellate
body has agreed with our position that the U.S. gambling laws at issue here protect
public order and public morals," Allgeier said. "U.S. restrictions on
Internet gambling can be maintained. This report essentially says that if we clarify
U.S. Internet gambling restrictions in certain ways, we'll be fine," Allgeier
said.
There is no further appeal to the ruling. Mendel said that although
the ruling relates only to Antigua, the precedent may have far-reaching implications.
From initial assessments, one thing is clear - despite its claims to victory
the US will have to "tweak" or as the representative said "clarify"
some of its laws in terms of the ruling.
The appellate body reversed the
initial panel decision when it found that the United States could use federal
gambling laws to "protect public morals or maintain public order."
That interpretation allows the United States to be exempted from WTO rules
for trade in services, the U.S. Trade Representative said.
But in order
for the exception to apply, the appellate body said the United States needs to
"clarify" rules under the Interstate Horseracing Act, a federal law
that several states have used to legalise Internet gambling on horse racing.
Attorneys for Antigua said it will be difficult for the United States to use
a morals defence because it already allows Internet gambling on horse races.
Antigua's lead attorney, Mark Mendel, acknowledged the possibility of the
United States merely tweaking federal laws and said his client was willing to
start the "whole process" over if the changes were insufficient. "But
we'd like to see a negotiated compromise that allows Antiguan operators to provide
limited services in the U.S. that are subject to supervision," said Mendel
Further negotiation therefore seems to be the most likely option.
Antigua
filed the case before the WTO in 2003, contending that U.S. restrictions on Internet
gambling violated trade commitments the United States made as a member of the
148-nation WTO.
U.S. trade officials disagreed, saying that negotiators
involved in the Uruguay Round of global trade talks, which created the WTO in
1995, clearly intended to exclude gambling.
