* Gaming Firms Plan Counterattack *

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Tiny Antigua is center of international pressure on ‘protectionist’ U.S. online gambling law.
October 6, 2006

The center of the online gambling universe has shifted to tiny Antigua, which has emerged as the industry’s best option to overturn or amend a U.S. law that makes online gambling illegal.



It’s a long shot, but the industry will attempt to bring additional international pressure on the United States on the grounds that the law is protectionist and discriminatory (see Net Gambling Feels Aftershocks).



The chief executive of United Kingdom-based Sportingbet, Nigel Payne, is currently on the 108-square-mile island conferring with the Antiguan government. Many of the large online gambling firms licensed in Antigua are also in touch with the government.



The Antiguan government is in the process of amending its complaint to the World Trade Organization to include the latest U.S. law, which the government believes is at odds with a 2005 ruling made by the WTO. The WTO ruled in Antigua’s favor in the trade dispute with the U.S.



The WTO ruled last year that the U.S. has inconsistently applied gaming laws so as to prejudice foreign countries, in violation of the General Agreement on Trade in Services (GATS). Both the U.S. and Antigua are GATS signatories.



The Antiguan government is charging that the new U.S. online gambling law, the Unlawful Internet Gambling Enforcement Act of 2006, is similarly protectionist and discriminatory, and adds more weight to its side of the dispute.



“The new law underscores our position that the U.S. is just passing laws that further entrench their discriminatory measures, and they are not allowing Antigua market access pursuant to the commitment that they made,” said an Antiguan government official who requested anonymity.



Pyrrhic Victory

Antigua and Barbuda, a twin-island nation, is home to 44 online gaming licensees, of which 17 are legal and regulated online gambling firms headquartered in the country.



“We have very strong money-laundering and anti-terrorism guidelines,” said the government official. “Our gaming companies are subject to the same sort of requirements and regulations as our financial institutions. They have to be audited externally.”



The U.S. has claimed victory in the WTO outcome, in part because of the dense, diplomatic language that is standard in these rulings. But most observers agree that the WTO has clearly ruled against the U.S.



However, a victory for Antigua could be Pyrrhic. If the U.S. decides to ignore or reject the WTO ruling, Antigua could impose sanctions against the U.S., but the move would likely hurt Antigua far more than it would the U.S. Additional international pressure is the preferred reaction for Antigua.



The Antiguan government, through its U.S. ambassador, formally protested the bill on Thursday with the U.S. State Department. The country’s Prime Minister, Hon. Baldwyn Spencer, sent a letter of protest to U.S. President George W. Bush.



“The U.S. government wants to enjoy the benefits of the WTO, but it does not want to be obligated by the tenets of international law when it rules against it,” the official said.



Contact the writer: CMedford@RedHerring.com