WASHINGTON (AFP) - Antigua and Barbuda beat long odds as the World Trade Organization confirmed its ruling that a ban in the United States on Internet gambling violates global trading rules.
The Geneva-based WTO, in a report released Wednesday, held that the US ban on web gambling is effectively an unfair trade barrier that hurts the gaming industry of the tiny Caribbean nation.
US prohibitions on Internet gambling "are inconsistent with US obligations" under the 1995 General Agreement on Tariffs and Services (GATS), the WTO panel wrote in Geneva, affirming an interim decision in March.
An effective US ban on online gambling represents an "arbitrary and unjustifiable discrimination between countries" or a "disguised restriction on trade," the WTO wrote.
Richard Mills of the office of the US Trade Representative (USTR) called the decision "deeply flawed" and pointed out that Washington "clearly intended to exclude gambling from US services commitments" when the agreements were negotiated.
"We will vigorously appeal this deeply flawed report to the WTO Appellate Body and remain confident in the basis for reversing this panel report," he said.
A senior US trade official, speaking on condition of anonymity, said that if the US appeal fails, Washington may simply revise its commitment under the GATS agreement to exclude gambling.
"The parties do retain rights to make changes under GATS," the official said.
The WTO panel ruling acknowledged that Washington may have intended to exclude gambling from the treaty but that Internet gambling is covered under the services agreement of global trade agreements.
"We have, therefore, some sympathy with the United States' point in this regard," the WTO panel wrote.
"However, the scope of a specific commitment cannot depend upon what a member intended or did not intend to do at the time of the negotiations."
A patchwork of regulations in US states regulate gambling, while federal laws ban any form of "interstate" betting activity. US Justice Department officials contend that any Internet gambling is illegal, but prosecution has been spotty.
But Antigua argued, and the WTO agreed, that since many forms of wagering are permitted in the United States -- such as casino gambling in Las Vegas and elsewhere and horse track betting -- that a ban on gambling from "remote" gambling from the Internet was discriminatory.
The senior US official rejected this argument, saying, "I don't think it's fair to say because there's gambling in Las Vegas it undermines a ban on Internet gambling, where you could have minors participating."
The official added that because this ban applies to US and non-US gaming operators, "Antigua and Barbuda is not being treated any differently from any US company."
In addition to its argument that gambling should not have been considered among services covered, Washington also maintained that the treaty allows each member country latitude in regulating "public morals."
But the WTO wrote that the arguments from Washington carry less weight because of the wide variety of gambling options that are legal in the United States.
"The types of games offered from Antigua are the same as those offered in the United States and all involve the winning or losing of money. The only differences are the origin of the services and the suppliers and the mode of supply (cross-border as opposed to commercial presence)," the WTO said.
11/10/2004 - 20:24 GMT - AFP