Vice Squad
Saturday, March 31, 2007
WTO Rules for Antigua Again

Imagine that you lose a civil case as a defendant, and the court orders you to abate a nuisance, say, by ceasing to engage in some activity. You don't stop, and the plaintiff returns to the court. You are asked to explain your failure to comply, and you say, basically, I thought I was always in compliance -- my activity did not constitute a nuisance. You wouldn't be surprised if the court mentions that your contention was already rejected in the original trial.

Well, that is essentially what has happened in the World Trade Organization dispute between Antigua in the US. The US was found to be engaged in discriminatory behavior by allowing some domestically-based internet betting on horse racing, while preventing Antigua-based firms from offering a similar service to US bettors. The US was supposed to alter its legislation to eliminate the discriminatory treatment, but it did no such thing -- rather, when hauled back into the WTO dispute process the US claimed that its rules had always been non-discriminatory. (The one piece of new US legislation that was connected to internet gambling was the October 2006 attempt to curtail web betting by targeting payment intermediaries. But horse racing was explicitly exempted, precisely to protect the existing domestic trade.) On Friday, the WTO announced that it did not find the US-non-argument to be compelling. The decision was widely expected, in part because of an unauthorized leak of an interim report in January.

The original dispute was a near-complete victory for the US. Antigua had targeted all forms of internet gambling, but only prevailed in the case of horse racing because of the legal internal trade in the US. This small bone that the WTO tossed to Antigua was more than the US was willing to tolerate, it seems.

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