U.S. faces sanctions for gaming ban
December 23, 2007 - 0:0
The U.S. faces $21m (£10.6m) in annual trade sanctions as a result of its online betting ban, the World Trade Organization (WTO) has ruled.
Antigua and Barbuda was awarded the right to impose sanctions that target U.S. services, copyrights and trademarks.Laws passed in the U.S. in October 2006 effectively made it illegal for foreign internet gaming firms to trade there. But in March the trade body delivered a final ruling saying that the U.S. online betting ban was illegal.
Antigua had hoped to impose $3.4b in retaliatory measures against the U.S .and the amount awarded was described as a token gesture, given the massive size of the U.S. economy.
The U.S. said that Antigua's claim was excessive and more than three times the size of Antigua's entire economy.
""The United States is pleased that the figure arrived at by the arbitrator is over 100 times lower than Antigua's claim,"" said Sean Spicer, a spokesman for U.S. Trade Representative Susan Schwab.
Antigua, a former British colony of about 800,000 people, had been promoting electronic commerce as way to end the country's reliance on tourism, which was hurt by a series of hurricanes in the late 1990s.
Piracy risk
The Caribbean nation is the smallest country to litigate a case successfully in the WTO's 12-year-history.
The case had drawn the attention of U.S. industry because Antigua has threatened to target U.S. trademarks and copyright, which could make the nation a safe haven for intellectual property piracy.
The ruling could ""establish a harmful precedent for a WTO member to affirmatively authorize what would otherwise be considered acts of piracy, counterfeiting or other forms of ... infringement"", the U.S. said.
The U.S. and Antigua cannot appeal against Friday's decision. Mark Mendel, the lawyer who led the case for Antigua, said that the country was unlikely to violate U.S. copyrights. ""Antigua doesn't want to negate American intellectual property rights. They don't want to sell ... DVDs and copies of Microsoft Office.""
Last year the U.S. stopped U.S. banks and credit card companies from processing payments to online gambling businesses outside the country, effectively killing off the market for overseas gambling firms.
About half of the world's online gamblers are based in the U.S., and the market is estimated to be worth $15.5b.
The WTO ruling said the U.S. was breaking trade law by targeting online gambling firms, without equal application of the rules to U.S. firms offering online betting on horse and dog racing. Earlier this week, the EU said the U.S. would offer its member countries trade concessions as compensation for its refusal to lift internet gambling laws.
(Source: BBC)