USA Maintains Withdrawal of Online Poker & Online Gambling from WTO GATS Treaty

The World Trade Organization (WTO) case that Antigua and Barbuda repeatedly won against the United States for blocking foreign online gambling operators from taking US customers continues to develop, as an interview with an anonymous trade official in the office of the United States Trade Representative (USTR) reveals in an article in the Antigua Sun last week.

The article reports that the US is most unlikely to change its policy of permitting only selective forms of US-based online gambling such as lotteries, fantasy sports and horse betting within its borders, and will continue to block foreign operators from taking US customers.

In the SUN interview, a trade official in the office of the USTR, who asked not to be named, said the US sees its current course to withdraw their General Agreement on Trade in Services (GATS) obligations to grant market access to Internet gambling companies as the best way of achieving closure on the issue.

"We are trying to clarify, by using Article 21 of the GATS agreement (General Agreement on Trade in Services) that our obligations should not extend to gambling," he said.

BILLIONS OF DOLLARS IN CLAIMS AGAINST USA

By withdrawing their trade obligations, an offshoot of this Article 21 process is that the US must reach settlements with all WTO member states which filed compensation claims for their online gambling related losses.

After the WTO formally adopted the ruling of its Dispute Settlement Body in May, declaring the US in continued violation of its commitments under the GATS and citing especially the restrictions the US placed on remote gambling under the Unlawful Internet Gambling Enforcement Act (UIGEA), Antigua and Barbuda called on the 150 members of the WTO to join it in filing compensation claims against the United States.

Billions of dollars in damage claims from nine countries have already been filed with the WTO.

In addition to Antigua and Barbuda claim which could exceed USD $7 billion, the European Union has filed a $15 billion claim against the US. Additional claims have been filed by Australia, Brazil, Canada, Costa Rica, India, Macao and Japan.

"We've been quite pleased, to date, that the members who have made claims seem to be approaching this issue with a sense of seriousness and realism and that they generally seem determined to reach a solution; and we continue to believe that this Article 21 process is really the path that is most likely to lead to a resolution of this issue," the trade official told the SUN.

This assessment conflicts with those of Antigua and Barbuda's WTO attorney Mark Mendel who, in an interview with the SUN shortly after meeting with US Article 21 negotiators at the beginning of August, dismissed the meeting as unproductive and accused the US team of calling the meeting simply so they could say they had met with Antigua and Barbuda. The USTR representative was also present at that meeting and told the SUN that on the other hand that the session was useful (click here for related article).

DEADLINES APPROACHING

The deadline for the conclusion of the Article 21 process is 22 September and that though extensions are possible, the USTR says that it is working towards a conclusion to the negotiation of resolutions by that period.

This withdrawal of GATS commitment is being treated as a separate, though connected issue, to the USD $3.4 million trade claim being pursued by Antigua and Barbuda at the WTO.

Last Friday, Antigua and Barbuda presented a written submission to justify its US$3.4 billion per year in trade sanctions claimed against the US. As Antigua and Barbuda's WTO attorney, Mark Mendel, explained it, the submitted paper described how Antigua and Barbuda came up with its damages. The US response to the submission, he said, is due on 19 September and then Antigua and Barbuda will get a chance to respond to the US position on 4 October.

"The decision is made by the same panel that we were before last time, which was very sympathetic to us and it will be issued on this issue before the end of November," Mendel explained.

The USTR official declined to comment on Antigua and Barbuda's submission, pointing out that there has been insufficient time to study it carefully, but the US continues to hold the position that the damages being claimed appear disproportionate.

"Our view is that the figure seems excessive, but we're going to have to study the economic methodology that's been put forward and we're going to have to have our own economists look at it and we will have a response to it," he said.

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