The mouse that roared

A move by puny Caribbean island Antigua and Barbuda to get the World Trade Organisation (WTO) to refer the United States to a dispute panel over Internet Gambling is being compared to the ancient biblical battle of David and Goliath. In that contest of will, David slewed the giant Goliath with a rudimentary sling-shot. Whether Antigua and Barbuda will end up like David, countries worldwide are taking a keen interest in the battle as not many WTO members, far less, a small island developing state have shown courage in taking on the US. The European Union, Taipei, Canada, Mexico and Japan among others have expressed third party interest in the dispute.

“Before Antigua, they were not prepared to go forward but now that Antigua has gone forward showing our feelings that we have a right to go against the US — all these other countries are now coming on board,” said Antigua and Barbuda’s prime minister Lester Bird.
“In fact it is a great victory for Antigua and Barbuda to be able to get the WTO to agree that the US must answer the charges,” he said.
The WTO last month appointed a three man panel with B K Zuthshi of India as Chairman. The other two panellists are Virachai Plasai of Thailand and Richard Plender QC of the United Kingdom. Antigua and Barbuda’s Chief Foreign Affairs representative Sir Ron Saunders requested WTO Director-General Dr Supachai Panitchpakdi to appoint the Panel after talks with the US failed to agree on its composition. The Dispute Settlement Body (DSB) of the WTO authorised the establishment of a Panel to hear Antigua and Barbuda’s complaint after the country presented its case.

Antigua and Barbuda contends that a US ban on the cross-border supply of gaming and betting services from the island to the US violates US commitments under the General Agreement of Trade in Services (GATS) which seeks to create equal conditions of competition for domestic and foreign service suppliers. By blocking credit card transactions and penalising credit card companies and banks that facilitate transactions to the island, the US action has had a punishing effect on the industry in Antigua and Barbuda. The US has also suggested that organised criminals could abuse Internet gaming for money laundering and other criminal purposes. “We painstakingly pointed out that the way in which the industry operates, and is regulated, makes it impossible for such activities since the  operators could only accept funds by transfers which are traceable, and that winnings could only be paid to the accounts and addresses from which punters send money in the first place,” he said.

Under Antigua’s comprehensive regulatory framework that governs the activities of gaming companies checks are placed on the fairness of gaming systems; companies are required to identify and prohibit pathological gambling and they must enforce stringent “Know Your Customer” verification procedures. In addition, companies are required to maintain comprehensive records relating to all gaming and all financial transactions of each customer for a period of not less than six years. A third point raised by the US was that cross-border gambling and betting services are prohibited under US law “from domestic and foreign service suppliers alike.” “We pointed out that a ban on the cross-border supply of services has a very different effect depending on whether you are inside or outside the borders of the United States. “The GATS seeks to create equal conditions of competition for domestic and foreign service suppliers. In this context, we made the point that it is  not a reasonable argument to contend that a measure prohibiting cross-border supply has an equal effect on foreign and domestic service suppliers,” said the Senior Foreign Ministry Official.
“After all, the US domestic service suppliers are not crossing any borders when they supply the US market to the exclusion of others who are outside US borders.”

In its fourth submission, the US also flatly stated that cross-border gambling and betting services are not within the scope of the specific market access commitments that it made under the GATS. “The US made no attempt to substantiate this assertion. It was flatly made on a take-it or leave-it basis. It is important to note that in simply relying on its flat assertion that, in its view, cross border gambling and betting services are not within the scope of the market access commitments it made under the GATS, the US is trying to apply an amazing double standard,” Sir Ron asserted.
Since the WTO’s dispute machinery came into force in 1995, the US has been its most frequent user, haven taken 75 disputes to the DSB in which it was the complainant.