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WTO Final Decision - WOW!!

The World Trade Organization issued it’s Final Decision today in the case brought by Antigua and Barbuda against the United States. While we’ll certainly have more to say shortly, the WTO emphatically rejected the United States feeble argument that it had complied with the WTO’s previous decision to halt discriminatory treatment of remote gambling operators located in foreign countries. The WTO identified not only the sanctioned operations of horsebetting sites like which are permitted to operate in the U.S., but also pointed out that the U.S. Congress, in passing the UIGEA signed in October 2006, also permitted remote gambling to be conducted by wholly intra-state operators, which also was found to be discriminatory.

While many have argued that the U.S. can fix this problem by simply outlawing interstate wagering on horseracing, which we believe is highly unlikely, the problem is not so simple. For instance, the U.S. would also have to preclude all intra-state wagering, which was a critical exception in UIGEA included in deference to states rights advocates who insisted that individual states be able to determine what activities are permitted within their boundaries. The expansive impact of this decision, and the chaos which it throws upon current law enforcement efforts to combat the “evils” of internet gambling, will be neither easily nor quickly solved.

Maybe, just maybe, the U.S. will see the perils of it’s current course of conduct, and begin to study whether they can establish a workable mechanism for regulating the online gambling industry. Our belief is the national gaming industry in the U.S. will eventually demand nothing less.

The official text as issued by the WTO can be found here from the site. All previous filings in the case can be found in the Official Annex to the decision at the website.

More comments and observations to come.

Add comment March 30th, 2007

WTO Decision - Yet Another Perspective

Yet another perspective on the WTO decision in the Antigua case has been written. This time in the form of an Op/Ed piece at BASIS Online, the website of the Division on Addictions at the Cambridge Health Alliance by Marc Mendel, one of the attorneys who represented Antigua in the WTO dispute. While there have been arguments back and forth as to whether the U.S. or Antigua won, Mr. Mendel is understandably in the camp arguing that “the United States lost, and lost big.”

Mr. Mendel argues, with some validity in our view, that to comply with the WTO decision without giving Antigua access to the online gaming market in the U.S., the U.S. must prohibit all domestic remote gambling. To just deal with betting on horseracing, which some have focused on, misses the point. So, assuming Antigua isn’t granted access to the U.S. markets, I suspect Mr. Mendel would believe that on-property wireless remote betting being introduced in Las Vegas should be considered domestic remote gambling which must be prohibited by the U.S. in order to comply with the WTO ruling. Interesting. The complete article can be found at BASIS Online.

Add comment October 26th, 2005

Simulcast Conference Update No. 2

Greg Avioli, Executive VP, Legislation and Corporate Planning, NTRA this morning provided interesting comments on the likely response of the U.S. to the WTO decision which found the U.S. in violation of it’s international commitments to free trade in gaming services. He is one of the folks who thinks the U.S. “lost” the WTO case, though many have argued that the U.S. won. The losing postion of the U.S. is made clear by the fact that the U.S. is under mandate by the WTO to correct it’s discrimination in gaming services by April 2006, or face sanctions. Mr. Avioli was quite direct in saying that he didn’t think any of the three alterantives he saw as a possible resolution would occur.

The first, quickly dismissed, was that the U.S. Congress would amend the Interstate Horseracing Act to preclude U.S. operators from offering online horse betting. We agree this option is very unlikely. The second, that the U.S. legislature would open online gaming to all markets, was similarly quickly dismissed. We agree even more emphatically, as it has been 7+ years of failure at the U.S. level to pass legislation which would seek to prohibit online gaming, they are hardly going to turn around and specifically allow it. The third option presented by Mr.Avioli was that the U.S. would withdraw gaming services from their international commitments, and then be required to replace the online gaming industry current commitments with a service of equal value. Seems unlikely to us as well.

So, he concludes by figuring that the U.S. will do nothing by April, 2006 and then Antigua will be able to push for sanctions, which he figures no one is going to worry about anyways. That is, until more significant trading partners, like the UK or the EU, take the same position as Antigua. That will present a very different problem!

Add comment October 4th, 2005