PHA-Exchange> WTO ruling on internet gambling

[Claudio]

>From David Legge

From: "Ellen Gould" <ellengould at telus.net>

"Members' regulatory sovereignty is an essential pillar of the progressive liberalization of trade in services, but this sovereignty ends whenever rights of other Members under the GATS are impaired." 
WTO Panel, "United States - Measures Affecting the Cross-border Supply of Gambling and Betting Services", November 2004

Highlights of the US - Gambling Decision

The recently released WTO panel decision - "United States - Measures Affecting the Cross-border Supply of Gambling and Betting Services" - ruled in favour of Antigua's complaint that US prohibitions on Internet gambling were a violation of US cross-border market access commitments under the GATS. The panel also decided that the US failed to justify its Internet gambling prohibitions as "necessary" because it had refused to consult with Antigua on what steps Antigua could take to address US concerns.

Media reports are presenting this case as a David versus Goliath contest, proof that WTO dispute settlement can work for small countries.  In fact it is a win for the extremely powerful international gaming industry including its most dominant players in the US.  US transnational gambing firms that have sought US deregulation of Internet gambling saw their stock prices go up after the panel decision leaked out.  A spokesman for the giant US gambling conglomerate, MGM Mirage, told the Wall Street Journal, "I'm going to send Antigua a thank you note." 

The US is stuck - it cannot withdraw the commitment, it cannot comply with the panel ruling, and so it has made a multi-billion dollar trade concession that it has to hope other WTO members will ignore.  This will act like an elephant in the room in the GATS negotiations.
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