U.S. Faces WTO Member Heat for Gambling StanceBoth Antigua and Barbuda and the European Union Want Compensation |
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The United States is about to face litigation from two World Trade Organization members because of its restrictive stance on online gambling.
Both the European Union and the Caribbean nation of Antigua and Barbuda will seek monetary compensation from the U.S. through the WTO because the U.S. has failed to comply with WTO rulings that say U.S. policy to restrict online gambling violates WTO free trade rules.
Antigua and Barbuda is asking for more than $3 billion in annual sanctions against the U.S. for stopping its residents from accessing online gambling sites located in the island nation. It's not known exactly what the E.U. will seek.
The case between Antigua and Barbuda has been going on since 2003. WTO panels have repeatedly told the U.S. that it's violating WTO agreements by working to prevent its residents from using online sites located in Antigua and Barbuda. Even after the final appeal failed earlier this year, U.S. officials told the WTO that it doesn't believe it's violating any trade agreements because when officials signed paperwork in 1994, they didn't realize that online gambling fell under rules that cover recreational activities.
Instead of complying with WTO rulings, the U.S. responded by stating it will modify the agreement to reflect its current stance. U.S. officials believe that by doing this, the U.S. is now complying with WTO rules.
WTO rules state that when a nation moves to revise agreements that already been signed, member nations can seek compensation if the revision directly affects companies located within their borders. Antigua and Barbuda asked all WTO members to seek compensation against the U.S. because of the maneuver.
Antigua and Barbuda's complaints were made before the Unlawful Internet Gambling Enforcement Act was signed into law by President George W. Bush in October.
The E.U., which goes under the WTO member name European Communities, has consistently pressured its member nations to allow its residents to access online gambling sites that are located within the E.U. Like the WTO, the E.U. considers online gambling a product that should not be restricted in countries that allow gambling.
This is the main reason the WTO ruled in favor of Antigua and Barbuda in its case. If the U.S. banned all forms of online gambling, particularly interstate horse betting, then the WTO would most likely have ruled against the island nation.
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