Gaming dispute costing Antigua millions

ST. JOHN’S, Antigua, Thursday April 28, 2011 – Prime Minister Baldwin Spencer has revealed that the United States’ failure to comply with a World Trade Organisation (WTO) ruling on online gaming is hurting Antigua and Barbuda financially – and significantly so – not only though lost earnings and jobs but because it has forced the country into an expensive legal battle.

And he has made it clear that all options are being considered to resolve the dispute, including going outside the WTO for satisfaction.

Spencer was speaking yesterday at the opening of a two-day summit convened at the Sandals Grande Resort to discuss the status of the disagreement with the US and to seek support from players in the international gaming industry.

During the late 1990s, Antigua and Barbuda was the largest gaming jurisdiction in this hemisphere, employing over 3,000 people and contributing 6-8 percent to gross domestic product (GDP). The Prime Minister noted that in 2000 alone, the sector paid in excess of EC$35 million (US$12.96 million) in wages and salaries. 

“Our quarrel with the United States is not a moral or political issue, but one of economics.”  –Prime Minister Baldwin Spencer

“However, post intervention of US laws and WTO decision, employment in the sector today registers approximately 440 employees. License fees today are below EC$2 million (US$740,740) from a high of EC$20 million (US$7.4 million) in the late 1990’s,” he said. 

“I can further go on to demonstrate the loss of revenue to businesses and private individuals who provided services to the Internet Gaming companies, rented homes and office space among others. The cost of pursuing this matter at the WTO has been astronomical.”

Although resolute that the US must open up its domestic remote gaming industry to fair international competition, as the WTO ruled it should, the Prime Minister was quick to note that the summit was not about making an enemy of America, but about the economic survival of the people of Antigua and Barbuda and finding a fair and sustainable resolution for stakeholders in the industry.

“My government enjoys the longstanding, cooperative and mutually beneficial relations in a wide range of areas, including crime and security, that exist between Antigua and Barbuda and the United States. However, it must be clear and unambiguous that the current actions of the United States is hurting our small economy, which is struggling to survive not only in a competitive world as it relates to trade, but during the worst economic recession experienced by mankind in over 50 years,” Spencer said.

“Our quarrel with the United States is not a moral or political issue, but one of economics.”

Ball in Antigua’s court

The dispute with the US dates back to 2003 when the Government of Antigua and Barbuda requested consultations regarding measure preventing cross-border supply of gambling and betting services.

It reached the point where Antigua and Barbuda made a complaint to the WTO about the US government’s actions. The WTO ruled in the Caribbean island’s favour but the organisation’s appeals body somewhat narrowed that ruling in April 2005, arguing that various state laws argued by Antigua and Barbuda to be contrary to the WTO agreements were not sufficiently discussed during the course of the proceedings to be properly assessed by the panel. 

However, the appeals panel also ruled that the Wire Act and two other federal statutes prohibiting the provision of gambling services from Antigua to the US violated the WTO’s General Agreement on Trade in Services (GATS). 

The matter went to the WTO’s Dispute Settlement Body which ruled in March 2007 that the US was in fact not in compliance with a ruling against prohibitions on internet gambling. 

In June of that year, Antigua and Barbuda filed a claim with the WTO for USD$3.4 billion in trade sanctions against the US, along with a request for authorization to ignore US patent but the trade body only granted Antigua and Barbuda US$21 million in annual trade sanctions against the US, as compensation for damages.

Since then the two sides have been trying to negotiate a settlement that is acceptable to both parties but have had no success.

Prime Minister Spencer said that while Antigua and Barbuda remains committed to the guiding principles which led the country to signing on to the WTO, compliance with the organisation’s rules, regulations and rulings have been of very little benefit to the twin-island nation.

“I therefore ask, has the time come for Antigua and Barbuda to commence its fight outside of the WTO? This we must consider and consider seriously,” he told the participants.

“The ball now is in our court. All options are now on the table.”

At the end of the summit, it’s expected that there will be a plan devised for ultimate resolution on this dispute and the gaming industry generally in Antigua and Barbuda.

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