August 19, 2005

WTO Gives U.S. Until April to Change We Gambling Law

GENEVA -- A World Trade Organization arbiter on Friday gave the United States until April 3 to comply with a ruling that a ban on Internet gambling services offered by Antigua violates the body's rules.

U.S. officials had sought a July deadline.

United States Trade Representative's Office press secretary Neena Moorjani said on Friday the USTR would examine the ruling and do its best to accede to the timeframe.

But she said the change would not necessarily loosen U.S. restrictions on Internet gambling.

The arbiter's decision was the latest stage in a long-running "David against Goliath" case brought by Antigua & Barbuda, a small Caribbean nation that has invested heavily in the electronic gambling industry to boost its economy and job opportunities.

A WTO dispute panel and an appeals body both found largely in favor of Antigua's complaint over the ban, which has kept U.S. banks and major Internet search engines from doing business with gambling firms on the island.

The arbiter, German trade expert Claus-Dieter Ehlermann, said he recognized the U.S. task would be difficult due to the highly regulated nature of Internet gambling and betting in the United States, but was not convinced a July deadline was needed.

Antiguan officials say they are confident the United States will conform, but trade diplomats say Antigua could do little if the legislative changes were not made on time, or at all, other than press the case further within the WTO.

"The United States has already announced its intention to comply with the WTO findings," the USTR's Moorjani said.

"USTR will not ask Congress to weaken U.S. restrictions on Internet gambling. We had asked for 15 months to comply as it was our reasonable and realistic estimate of the necessary amount of time. But we are studying the arbitrator's award and will do our utmost to comply," she added.

WTO countries whose trade partners are found to have failed to implement dispute rulings can be authorized to impose sanctions, usually in the form of extra tariffs, on goods or services from the offending nations.

But small economies often find retaliating against larger ones rebounds on themselves, as in a dispute when the European Union was found to have failed to change its banana import rules in line with a decision in a case brought by Ecuador.