Update on WTO GATS, gambling, and Antigua

The Register provides an update to the tiny Antigua case.

The case originated back in 2003 after the prosecution of Jay Cohen, an expatriate American who ran a sportsbook out of Antigua called the World Sports Exchange, and ended up doing time in a federal prison – in Las Vegas, of all places – for violation of the Wire Act. The high profile prosecution led the Antiguan authorities to file a formal complaint with the WTO, because the US continued to allow US companies to offer various forms of remote domestic gambling while aggressively prosecuting Antiguan companies under legislation originally drafted to fight the mob. A fuller treatment of the case can be found here, but, suffice to say, the WTO sided with the Antiguans.

The ramifications of that defeat are still rippling around the world, and major American trading partners such as the EU and Japan have begun lining up behind the Antiguans in defense of WTO principles. Potential damages are really starting to pile up – the AP reported today that EU online gambling firms are pressing for $100 bil in damages.

Traditional trade sanctions would do little for a small country like Antigua, so the WTO rules allow smaller countries the option of suspending their own WTO commitments, and the Antiguans have been threatening to suspend their intellectual property obligations to the US. That in turn ultimately caught the attention of powerful Silicon Valley and Hollywood interests, and last week the mainstream American press suddenly discovered that something important was happening.

Antigua filed a claim with the WTO for $3.4 bil to compensate the little island nation for the economic fallout resulting from repeated American legal attacks on Antigua-based internet gambling providers. The US has countered with an offer of – ahem – $500,000. The EU, however, is the largest and most dynamic online gambling market in the world, and the US is trying to buy that claim out by offering to liberalize such dynamic, hot-growth economic sectors as warehousing and storage services.

JohnA sent the link. The Register has links to past articles on the progression of the case if interested.

As industry chases entry into markets, notice the small ripples like Intellectual Property rights of a case like Antigua grows large when the crack in the dike is opened for bigger players, and the bargaining begins to widen openings. The US has of course played the same way.

Will the changes catch regular people off guard? I imagine most people in the revolutionary Renaissance and Enlightenment period missed the enormity of change as they went about making a living. Most of us do. Of course, what is actionable information in this regard?