The Antigua-US World Trade Organization Dispute

World Trade OrganizationIn the online gambling industry, you generally come to accept that there are going to be a lot of lawsuits, sanctions and other legal actions taken simply because there is no international governing body that sets standards for the industry. Along these lines, the rules and approaches are completely different in different parts of the world.

The Antigua WTO Dispute - The Beginning

Since 2003, what's likely to be the longest-running dispute of this kind, and one that's lasted for about two-thirds of the life of the online gambling industry itself, has been between Antigua and the United States through the World Trade Organization. It started in early 2003 when Antigua went against the United States and their ban against online gambling services. This ban is largely due to the Interstate Wire Act of 1961, which was used at the time to assert that online gambling was illegal in the US on a federal level (which has since been changed, only to complicate the issue). Since this dispute began, there have been many turns of events.

WTO Rules in Favor of Antigua (2004)

In 2004, the World Trade Organization ruled in favor of Antigua. The finding showed that the United States' policies against online gambling were not only shooting themselves in the foot, since players were gambling online anyway without the US getting any tax revenue, but that it actually violated multiple international treaties. This ruling, while major in theory, didn't amount to much after the United States almost completely ignored Antigua's attempts to negotiate an end to the issue. The ruling in favor of Antigua wasn't actually announced publicly until almost the end of the year after negotiations broke down (or actually, never really started) between the two countries.

US Appeal Denied (2005)

The United States tried to appeal the finding in 2005. Oral arguments were given, and the World Trade Organization upheld their finding in April. This appeal was important because it clarified exactly what was wrong with the USA's online gambling ban in terms of international treaties, and it narrowed what the issues were down to very specific pieces of information. The most important of these were that the US were violating free trade agreements and that they could not use moral arguments (against gambling) to justify their breaking of these agreements.

The US Proceeds to Do Nothing Except Pass the UIGEA (2006)

The United States had until April 2006 to change their gambling laws, and they did nothing. By June 2006, Antigua had complained again to the WTO that something needed to be done about the United States failing to comply with their rulings. The US then passed the Unlawful Internet Gambling Enforcement Act in late 2006, which created even more barriers to gambling on the Internet, and that really showed how much the United States cared about Antigua and the World Trade Organization.

By March 2007, more findings were found in favor of Antigua. It was found that the US was still out of compliance after having done nothing to resolve the matter, and the United States did not have the right to argue the case again, which it had planned to do.

Withdrawing Commitment and Settlement (2007)

Under the treaties that the US was violating, there was grounds for withdrawing commitment for the free trade in particular industries, and the US took that option to withdraw their commitment for free trade in the arena of online gambling. However, for them to do that, they are supposed to make arrangements to provide compensation for the parties that would provide those services for the missed trade opportunities.

After the US announced their plans, things didn't go as they had hoped. Several countries, including the entire European Union, lined up against them to file claims asking for compensation. This was the last major update in the case, and there are still no resolutions to these claims for compensation even today.

Antigua on the Offensive (2012-2014)

Tired of the stalling from the United States and the lack of willingness of the WTO to do anything else to help them, Antigua took matters into their own hands. They passed changes to their copyright laws that would allow them to offer up downloads of intellectual property (music, computer programs, movies, etc.) from companies and individuals in the United States to offset the cost of the lack of free trade to them. No royalties would be paid to the US companies in this plan, and while it strongly irritated a number of people and companies whose intellectual property would be available because of this fight, the US still continued to do nothing.

Fast-Forward to Today (2016)

The World Trade Organization had given Antigua the legal right to collect up to $21 million from the United States (and this is in addition to what other countries were ruled in compensation). The United States never paid a dime, but they've recently made an offer to Antigua to settle the matter. No public details of the offer have been released, but it's very interesting to see that they're offering to settle a matter that's been 13 years in the making in an industry they've shown little to no interest in regulating on a national scale.

After almost a decade and a half of a struggle, it's looking like this matter might finally be resolved. However, if history is any indication, it's just as likely that things could explode with this fight dragging out for another 13 years.

Update July 2016

The Prime Minister of Antigua, Gaston Browne addressed the nation on July 25, 2016, presenting his position regarding the long standing WTO dispute with the United States as well as the failure for the parties involved to resolve the situation. He stressed the lack of commitment and responsiveness by the United States, as well as reiterating what the nation has lost in terms of jobs and revenue to both individuals and the national treasury. As is understandable, their patience is wearing thin. The US appears as a bully, elbowing the small island nation aside.

St. Johns has announced a new proposal for resolving the dispute via posted notice on the WTO website. The nation seeks $100 million in a settlement, though they have lost more than $200 million in revenue since the United States rescinded their position on free trade with online gambling. Browne pointed out that while Antigua has suffered great loss, the USA actually benefited from all of the fines and penalties paid to them by the gambling businesses they prosecuted.

Browne has instructed Sir Ronald Sanders, the nation’s Ambassador in Washington DC to resume negotiations on the matter. Browne has expressed that if the US should remain uncommitted to a solution and continue to demonstrate that through unreasonable proposals, then the country will have no choice but to impose enforcement options that have been authorized by WTO. Such options include Antigua’s right to suspend protections of US intellectual property rights. While Browne has expressed that this would not be his preferred method to resolve issues, they are done playing around and waiting for the United State to just brush them and their concerns aside, and they will consider the options afforded to them by the WTO in the interest of fairness.

Source: TrinidadExpress

Update March 2018

In the wake of Hurricane Irma’s devastation to the island of Barbuda, Antigua and Barbuda asked the US to settle the almost 13-year-old dispute to help offset the recovery costs. They feel somewhat helpless given their small stature compared to the US, one of the world’s greatest powers. Antigua and Barbuda denied a proposal that only saw the US pay out roughly $2 million, when they claim they are owed upwards of $200 million. The countries have threatened to stop protecting US intellectual property rights, even going so far as to set up websites facilitating illegal downloading and streaming of US based content. A similar case happened with Brazil back in 2010 when they were allowed to suspend payment of US intellectual property rights. This led to the US finally paying back what was owed in trade losses. Antigua and Barbuda were hoping to avoid this type of conflict because they don’t want US copyright holders to lose out on what they’re owed, but they understand this may be the only way to get the US’ attention.

The US claimed they offered several alternative solutions that were ignored, but representatives from Antigua and Barbuda quickly refuted those claims. In fact, the same reps said that the US saw a trade surplus with the 2 countries to the tune of $2 billion. Antigua and Barbuda want this issue resolved so they can get on track to rebuilding the areas affected by Hurricane Irma, preferably before the next hurricane season comes around.

Sir Ronald Sanders is still leading the crusade to claim what Antigua and Barbuda feel is rightfully theirs. This latest news comes out of a World Trade Organization summit held in Geneva towards the end of 2017. It is unclear what the US response to his latest outcry was, but one thing is certain, the countries have not been paid out yet.