Antigua Considers Using WTO Mediator to Resolve US iGambling Dispute

After Antigua and Barbuda took its online gambling case to the World Trade Organization (WTO) in 2003, the Caribbean state was awarded $21 million in annual compensation related to discriminatory laws applied by the US. Fifteen years later, however, the country’s bill has now run up to around $315 million, and with no sign of the US abiding by the decision, Antigua and Barbuda has said that it is fast “losing all hope” of a resolution and may pursue mediation on the issue, instead. As Antiguan ambassador Ronald Sanders told the WTO’s Dispute Settlement Body (DSB) last Friday:

“After a long period of exhausting attempts to engage the United States, Antigua and Barbuda is now contemplating, once again, of approaching the (WTO) Director-General.. to join in seeking a mediated solution that would bring much-needed relief after these arduous 15 years of damage to our economy.”

Online Gambling Case

Having taken its case to the WTO in 2003, Antigua received a favorable ruling by the organization in 2008. The country was subsequently given the right to secure the $21 million in annual compensation it was owed by manufacturing and selling intellectual property owned by US firms without having to pay them royalties.

Nevertheless, the island country has opted not to take such a potentially damaging step, despite making a number of past threats to the contrary, as Antigua and Barbuda is concerned that the US may retaliate by cutting off the other essential aid it provides the country in retaliation. As a result, Antigua has lacked the leverage to enforce its settlement victory, opting instead to voice its hope that “a sense of justice and fairness” would ultimately prevail.

US Resistance

Last week, Antigua and Barbuda told the WTO’s Dispute Settlement Body that it is currently seeking trade losses amounting to $315 million dating back to 2003. In the past, the US has dismissed previous calls for compensation, though, asserting that the country was opposed to online gambling on moral and religious grounds. Needless to say, these claim have been dismissed out of hand by the WTO, especially considering the USA’s own lucrative and long-standing gambling industry.

In a further act of defiance, the US defied obligations deriving from the General Agreement on Trade in Services (GATS) by introducing the Unlawful Internet Gambling Enforcement Act in 2006. The Act soon resulted in the crippling of online poker and gambling markets across the world, with Antigua particularly affected as at its peak iGambling accounted for around one third of the country’s GDP.

While UIGEA resulted in numerous less than reputable operators also being forced out of business, at the same time many more reliable operators, too, found themselves similarly cut off from the US market. This in turn resulted in Antigua’s economy suffering a significant blow as gambling operators relocated and refocused their marketing efforts elsewhere.

Ongoing Dispute

The WTO has increasingly been criticized for promoting a weak dispute settlement that has little ability to enforce its judgements, especially in the case of smaller nations without sufficient leverage to hold over bigger powers. This has subsequently led to situations such as the one currently experienced by Antigua in which the US is not prepared to honor its WTO obligation, despite the amount being sought representing less than 0.1% of its annual GDP.

Making the point, Antiguan ambassador Ronald Sanders said that his country has an obligation to “act in the interest of all” by ensuring all principles and rules of the WTO are upheld. By contrast, the US continues to assert that the two previous settlement offers it made demonstrated its willingness to engage, even though the sums offered are generally considered pittances and bad-faith offers. Commenting upon the latest attempt by Antigua to move the situation forward, U.S. Ambassador Dennis Shea stated:

“For these reasons [repeated offers], Antigua’s decision to place this matter on the agenda today appears to be a political statement, rather than an effort to engage on a resolution of this dispute.”