Below are three press releases:
1. Antigua claiming victory: online gambling is legal!
2. U.S. claiming victory: online gambling is not legal!
3. Antigua claiming surprise at U.S. victory claim
My own humble effort at decrypting this is here:
http://news.com.com/2100-1030_3-5658636.html
-Declan
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ANTIGUA WINS WTO GAMING RULING
April 7th, 2005 (Antigua) - The World Trade Organization (WTO) appellate
body today upheld a ruling in favour of Antigua in the trade dispute
with the US regarding cross-border online gambling. This is a landmark
victory for Antigua as the first, and smallest, WTO member to defeat the
United States, the largest member, in this well-respected international
trade court.
“The impartial dispute resolution machinery of the WTO has functioned as
we had expected,” says Mark Mendel, lead legal counsel for Antigua’s
case. “Justice has been served and potential compliance issues facing
various US corporations and the US Department of Justice will now be
resolved in a manner favorable to fair and responsible international
commerce.”
Reacting to rumours to the effect that the US is claiming victory in the
case, Mr. Mendel noted “the Appellate Body recommended that the WTO
cause the US laws to be brought in conformity with the GATS. The ruling
also notes that the US laws in effect discriminate against foreign
commerce. Unless the US wants to repeal all of its laws that currently
permit any form of domestic remote gambling and also adopt laws to
affirmatively prohibit it in all forms country-wide, they will have to
provide Antigua fair access.”
The WTO ruling is anticipated to pave the way for new media
opportunities for Antiguan gaming operators. Previously US companies
such as Citibank, Chase Manhattan, Bank of America, Clear Channel
Communication, Discovery TV, Yahoo and MSN were discouraged from
conducting financial transactions or broadcasting advertisements
involving online gaming products. The WTO determination is expected to
end subpoenas or threats of prosecution from the United States Justice
Department to US companies who choose to do business with Antigua
offshore gaming companies. “This is a country-specific ruling,” says
Mendel, “but it may have far-reaching implications.”
In the ruling, the Antiguans argued that it is inappropriate to treat
businesses that conduct transactions online as if they are unequal to or
somehow less credible than traditional brick-and-mortar operations.
Additionally, it was underscored that it is inappropriate for the US
government to assume an industry lacks integrity in the absence of
objective evidence.
The US now faces compliance issues that will require the United States
government to thoughtfully address its approach to on-line gaming rather
than simply prohibiting it altogether. Mendel states that this WTO
ruling will ultimately result in US companies making accommodations to
Antiguan gaming operators.
“At the end of the day,” said Mendel, “we expect that major internet
search engines, including Google and Yahoo, financial institutions and
credit card service providers will be required to accept advertising
from Antiguan internet gaming sites as they do currently with US gaming
interests, including hundreds of American casinos and state lotteries.”
For further information please contact: Jools Moore or Joslyn Tinker
+44 (0) 207 395 0500
From the US to the UK: 011 44 207 395 0500
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http://ustr.gov/Document_Library/Press_Releases/2005/April/U.S._Internet_Gambling_Restrictions_Can_St_as_U.S._Wins_Key_Issues_in_WTO_Dispute.html
U.S. Internet Gambling Restrictions Can Stand as U.S. Wins Key Issues in
WTO Dispute
04/07/2005
WASHINGTON - The United States won an important victory today when the
World Trade Organization (WTO) Appellate Body sided with the United
States on key issues in a challenge to U.S. laws on internet gambling.
"This win confirms what we knew from the start – WTO Members are
entitled to maintain restrictions on internet gambling," said Acting
U.S. Trade Representative Peter F. Allgeier. "We are pleased that the
Appellate Body has agreed with our position that the U.S. gambling laws
at issue here protect public order and public morals. By reversing key
aspects of a deeply flawed panel report, the Appellate Body has affirmed
that WTO Members can protect the public from organized crime and other
dangers associated with Internet gambling. This is also a victory for
the federal and state law enforcement officers and regulators who
protect the public from illegal gambling and its associated risks of
money laundering and organized crime."
"U.S. restrictions on internet gambling can be maintained," Allgeier
said. "This report essentially says that if we clarify U.S. internet
gambling restrictions in certain ways, we’ll be fine."
The Appellate Body found that the concerns addressed by the three U.S.
federal gambling laws at issue in this dispute "fall within the scope of
‘public morals’ and/or ‘public order’" under an exception to WTO rules
for trade in services. It merely found that, for this exception to
apply, the United States needs to clarify one narrow issue concerning
internet gambling on horse racing. USTR will be exploring possible
avenues for addressing this finding. USTR will not ask Congress to
weaken U.S. restrictions on internet gambling.
The next step in the process is for the WTO’s Dispute Settlement Body to
formally adopt the panel and Appellate Body reports within 30 days.
There is no further appeal.
Background
This dispute concerns Antigua’s allegation that U.S. state and federal
laws prohibiting the cross-border supply of gambling services (e.g.,
Internet and telephone gambling) are inconsistent with U.S. obligations
and our schedule of specific commitments under the General Agreement on
Trade in Services ("GATS"). Antigua argued that the United States
violated the market access provisions of the GATS by barring supply of
gambling services on a cross-border basis – such as supply of gambling
services by Internet from Antigua-based websites.
The Panel released a final report to the parties on May 25, 2004. The
parties suspended the panel proceedings for settlement negotiations from
June through October 2004. The final panel report was made public on
November 10, 2004.
In today’s report, the Appellate Body reversed key aspects of the
panel’s finding that U.S. federal laws did not meet the requirements for
application of WTO exceptions for "public morals" and "public order." As
a result, the Appellate Body found that U.S. laws qualify for these
exceptions, except that the United States must clarify a narrow issue
relating to Internet gambling on horse racing. The Appellate Body also
found that Antigua failed to prove that any of the state laws at issue
were inconsistent with WTO rules. However, the Appellate Body found that
the United States made a GATS market access commitment for gambling
services during the Uruguay Round.
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ANTIGUA SURPRISED BY US VICTORY CLAIMS IN WTO CASE
April 7th, 2005 (Antigua) - Antigua today expressed surprise at claims
of victory by US trade representatives in the online gaming WTO case
between the two countries.
“The Appellate Body recommended that the WTO cause the US laws to be
brought in conformity with the GATS,” said Mark Mendel, lead legal
counsel for Antigua, reacting to US claims of victory in the case. “The
ruling also notes that, in effect, the US laws discriminate against
foreign commerce. Unless the US wishes to repeal all of its laws that
currently permit any form of domestic remote gambling and adopt laws to
affirmatively prohibit it in all forms country-wide, then they will have
to provide Antiguan online gaming companies fair access to the US market.”
The WTO Appellate Body clearly upholds key elements of the initial
ruling in favor of Antigua. However, the US has interpreted the ruling
as allowing the US ban on foreign online gambling activity to remain in
place. Although a portion of the initial ruling was reversed by the
appellate group, the overall result remains substantially the same – in
Antigua’s favor.
Evidence of the Antigua triumph is further indicated by the Panel’s
findings that the US made a commitment with respect to gambling and
betting services under the General Agreement on Trade in Services (or
“GATS”); that key federal laws are contrary to those commitments and
violate the “market access” provision of the GATS; and that the US did
not meet its complete burden of proof under its claimed Article XIV
“morals” defense to Antigua’s claims.
The US has said that the WTO reversed a number of important rulings. In
fact the only substantive part of the report that the Appellate Body
reversed was the finding that the lack of consultations between the US
and Antigua meant that the US had not met the “necessity” burden under
Article XIV.
However, the Appellate Body ruled that the US had not met their burden
of proof, under the second part of Article XIV. The US failed to show
that their laws were not discriminatory in practice. In failing to
present a valid argument in respect of the second part of Article XIV,
their defence has been deemed to fail overall in the eyes of the WTO.
-ends-
For further information please contact: Jools Moore or Joslyn Tinker
+44 (0) 207 395 0500
From the US to the UK: 011 44 207 395 0500
Jools Moore
Cancan Communications
4 Flitcroft Street
London WC2H 8DJ
T. +44 (0) 20 7395 0509
M.+44 (0) 771 773 4606
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