Antigua-Barbuda to file compensation claim for US web gambling ban

Antigua-Barbuda to file compensation claim for US web gambling ban

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By Warren Giles

LONDON, England (Bloomberg):  Antigua and Barbuda will file a claim for compensation from the US for a ban on Internet gambling, its lawyer said after the Caribbean nation won a complaint at the World Trade Organization.

The value of any compensation is "a massive unknown and one of the reasons it’s a very poor idea for the US," Mark Mendel, Antigua’s legal counsel, said in a telephone interview Tuesday. "One route for us is filing a claim for compensation, which we will do, and we will also continue on the WTO track because the US has a commitment and it could be years until they’re allowed to withdraw that."

The US moved May 4 to "clarify" its commitments to the WTO, saying that opening of its market to offshore Internet gambling was "never intended" to be part of pledges made when joining the Geneva-based arbiter in 1994.

Compensation may be calculated based on loss of income for the 32 registered online casinos in the island nation of 80,000 people. Income has fallen to $130 million a year from $1 billion among Antigua’s online casinos in 2000, when earlier US restrictions on online gaming were imposed, the government says.

The country developed Internet gambling to boost a tourism-dependent economy after several hurricanes in the 1990s.

Antigua, the smallest nation to ever take a case at the WTO, says it’s entitled to compensation for its losses. The government estimates that Americans spend $10 billion a year in online bets.

Under WTO rules, a country can withdraw commitments to open its market in services to foreign investors. It can’t opt out of tariff cuts. The US must negotiate with any countries that object to the move and want to withdraw any of their commitments or force other changes in US rules as compensation.

The WTO ruled that the US ban on offshore Internet gambling was illegal on March 30.

"No one involved in" negotiating the 1994 global trade accord which created the WTO "could possibly have thought that the United States would make a market access commitment on cross-border gambling" because international wagers "by wire transmission" have been illegal since "at least the early 1960s," the US said in a statement to a meeting of ambassadors at the WTO on Tuesday.

Antigua says its head of offshore gaming met with US officials in 1997 to discuss how to improve regulations and supervise the industry. "If a ‘mistake’ had been made, why not tell us then?" Antigua said in a statement to the same meeting in Geneva.

The US Congress, then controlled by Republicans, passed legislation last September that curbs financial payments from banks to offshore Internet casinos that are illegal under US law. The law was aimed at shutting down the payment system for Internet gambling and caused betting sites such as SportingBet Plc to cease US operations or sell them for nominal amounts.

"While the withdrawal of a commitment might be at least understandable if the US possessed a strongly anti-gambling culture," said Mendel, "this is certainly not the case here."



Caribbean Net News: Antigua-Barbuda to file compensation claim for US web gambling ban

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