Online Gambling

The Mouse That Would Not Die

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The World Trade Organization dispute over America's gambling laws, which seemed to be petering out last month after Antigua and Barbuda received a modest arbitration award and the E.U., along with Japan and Canada, reached separate settlements with the U.S., is heating up again. The $21-million-a-year award that Antigua won last month was compensation for the U.S. decision to shut foreign operators of gambling websites out of the the American market while continuing to permit some forms of domestic online betting. That protectionist policy, the WTO found, violated a U.S. trade commitment covering gambling services. Now Antigua and Costa Rica, both of which are home to online gambling businesses, have asked the WTO to arbitrate their dispute with the U.S. regarding its attempt to unilaterally withdraw that commitment. Reuters explains:

Washington announced in May last year it would withdraw gambling from the services it opened up under a 1994 world trade deal.

Under WTO rules the United States then had to offer comparable access in other services to any of the WTO's 151 members who sought it, prompting the current dispute.

The European Union has said it reached an agreement with the U.S. over access to postal and courier, research and development and storage and warehouse services in compensation.

Washington has reached similar deals with Japan and Canada.

But no agreement has been reached with four other countries seeking compensation— Antigua, Macau, Costa Rica and India.

According to the Safe and Secure Gambling Initiative, a pro–free trade group representing foreign gambling businesses, "The arbitration filing makes it possible for the E.U. to reconsider its settlement with the U.S. and join the arbitration proceeding, opening up a new phase in the Internet gambling trade dispute." Also keeping the issue alive: The Remote Gambling Association wants the E.U. to file a WTO complaint about the U.S. government's discrimination against foreign gambling businesses, which it treats like criminal gangs.

The U.S. determination to maintain its unfair, inconsistent policy regarding gambling not only abrogrates the right of adults to spend their money as they see fit in the privacy of their homes. It also undermines the integrity of the WTO. The unprecedented decision to unilaterally withdraw a trade commitment, which Rep. Shelley Berkley (D-Nev.) calls "the trade equivalent of taking our ball and going home," is bound to invite imitation by other governments that find it inconvenient to keep their promises. And if they decide to follow the U.S. lead by selectively retracting commitments they've made, on what grounds will the U.S. be able to object?