U.S. May Face WTO Challenge Over Gambling Crackdown

The U.S. could soon face a World Trade Organization dispute settlement panel if owners and operators of illegal, offshore gambling websites follow through on threats made recently.

According to Reuters, the government of Antigua, which had three illegal poker sites shut down, is considering action.

"I don't think there's another country in the world that puts people in jail for engaging in trade that's lawful under international law," Mark Mendel, the Caribbean government's legal advisor, told Reuters. "It's as if Antigua would put Americans in jail for selling pineapples."

After the sites were shut down, the owners of all three were charged with accounts of fraud totaling $3 billion.

U.S. regulators allowed to other websites resuming gaming activities, but only after they agreed to ban potential U.S. customers.

If taken to the WTO by the Antigua government, it could put American laws outlawing gambling into question. In years past, the Antigua government has taken similar actions to the WTO, which has found the U.S. laws to be in violation of international trading standards.

For Antigua, the gambling industry is the second largest employer behind the tourism industry. The country claims that U.S. restrictions on gambling are costing it billions of dollars each year. WTO officials, however, found the number to be closer to $21 million.

Still, by finding that the regulations materially harmed the Antigua gambling industry, the country was allowed to impose countervailing measures against the U.S. In retaliation, they suspended intellectual property rights protections in the same amount.

Now they are considering going back to the WTO, asking for a dispute settlement panel, and imposing even steeper retaliatory measures.

"They're not defrauding anybody. They're not stealing money from anybody. They're just trying to run their businesses," Mendel said.

April 25^th, 2011

Source: economyincrisis.org