Monday, December 24, 2007
WTO rules in online gambling case US-Antigua

Last Friday, a WTO panel defined the level of compensation that the United States has to give island state Antigua & Barbuda for restricting online gambling. The amount was set at an annual US$ 20 million, which is only a small fraction of the US$ 3,4 billion claimed by Antigua.

The current compensation ruling is the consequence of a basic ruling of 2004 that condemned the US' ban on online gaming. In the WTO agreememt of the early nineties, the US erroneously committed to this market opening by using the wrong service classification codes to describe the services for which it was opening its markets.

In the mean time, the US has corrected this mistake by withdrawing its WTO commitments on gambling and it is in the final stages of providing a few WTO member states a compensation for this withdrawal.

The case with Antigua now also runs to its end, with the US having to pay a seemingly small price for its online gaming ban. In addition, the practibility of the measure still has to be seen. Antigua is allowed to get the US$20 million compensation through violating copyright protections on US goods like films and music. The value of these products will be subject to disputes and the distribution of them will also be less obvious than with their "regular" version.