A David & Goliath Battle for the Right to Gamble in the International Marketplace

A Battle for the Right to Gamble

The game of Russian Roulette between America and the small island nation of Antigua has reached its peak stemming from the United States’ continued efforts to block online gambling. Although Las Vegas and Atlantic City are American gambling meccas, online gambling is illegal in the United States with federal law prohibiting citizens from using online gambling services.
The World Trade Organization intervened to attempt to level the playing field between the island nation who heavily relies on its proceeds from online gambling as a source of revenue for its economy. The court found that the United States violated General Agreement on Trade in Services (“GATS”) because it adopted “measures” that interfered with its obligation to provide free trade in betting and gambling services with Antigua. Antigua specifically highlighted three federal laws (1) the Wire Act of 1961, 18 U.S.C. §1084 (“Wire Act”); (2) the Travel Act, 18 U.S.C. §1952 (“Travel Act”); and the Illegal Gambling Business Act, 18 U.S.C. §1955 (“IGBA”) that specifically violated GATS.
The WTO after determining that the U.S. prohibitions against international online gambling violated existing international trade agreements allowed Antigua & Barbuda to suspend U.S. copyrights in Antigua as compensation. This authority is going to cost America upwards of $21 million per year effective from April 2006. Antigua, eager to implement this judgment, has already established a “WTO Remedies Implementation Committee” which will develop and oversee the process of enforcing the WTO authorization. The committee was created with the mission of “harvesting benefits” from the suspension of United States intellectual property rights as sanctioned by the World Trade Organization
This is an example of a non-superpower standing up to the United States government and declaring that they have had their interests violated. Although the United States has its own interests that it wishes to further with these laws do to the interwoven nature of our economy due to World Wide Web as a marketplace; the United States should have taken into consideration the domino effect on foreign nations that it’s policy would create. This shows further proves the importance of third party entities that have the ability to impartially adjudicate claims between nations. Do you believe that the WTO fairly ruled in this matter? Was there a better remedy than the one implemented?

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Photo Courtesy of calvinayre.com

 

 

2 comments

  1. While this WTO ruling is impressive, I am not sure this is the appropriate precedent for the organization to set with regards to online gambling. Each party in a dispute has their interests in mind when submitting arguments to the WTO. Antigua has a vested interest in their digital gambling industry due to the obvious revenue generated, however economic benefits are just one of the factors the WTO can balance before issuing a ruling. The US also has many interests behind its regulation prohibiting online gambling. Online gambling has made the ability to regulate who is gambling extremely difficult. Is the person legally able to gamble? Is the money used for gambling purposes from illegal activity? It seems as if the WTO failed to take into consideration the moral consequences of this decision before issuing their ruling. I would like to know exactly which copyrights were suspended as a remedy for the dispute. 21 million is just a drop in the bucket for the US, but the decision does signify a converse attitude towards American work product and could lead to more issues in the future.

  2. While I understand that the WTO is trying to create a “stable trading climate” by removing barriers to trade between countries, there are sovereignty issues that are at stake as well. I think it is important that governments are able to regulate markets in their country’s own borders. There is a balance here between free corporate activities of businesses and the interests of United States citizens. It is important that State policy reasons for making certain commercial activities illegal are legitimate and not just justifications for government corruption.
    Opening world trade to commercial activities could lead to privatization of services generally considered public. Some people believe this may create opportunities for positive competition. Ultimately competition should lead to the most productive version of these services.

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