Reader Dan on the GATS Ruling on Gambling

Public Citizen offers a description of the impact of the GATS ruling on US gambling:

The WTO Appellate Body’s 2005 ruling in the U.S.-Gambling case. One of the most important WTO rulings concerning GATS was on a challenge to U.S. Internet gambling policy. Although the United States succeeded in convincing the WTO Appellate Body that U.S. laws banning Internet gambling could be justified under the “public morals” General Exception to the GATS (with the exception of the Interstate Horse Racing Act), the United States lost three significant aspects of its case that have broad implications:

The United States Committed Gambling: U.S. trade lawyers argued that they did not intend to subject gambling services to GATS authority when they signed up “recreational services” to the GATS in 1995. However, over the strenuous objections of the U.S. government, the WTO Appellate Body declared that the United States had committed gambling and all sub-sections of, such as sports betting apps, to the GATS, because “gambling” is a subsector of “recreational services” in the UN concordance of goods and services definitions used by most WTO members to make their GATS commitments. Because of this ruling, all federal, state and local laws governing gambling must comply with GATS rules. GATS rules prohibit certain limits on the number of service suppliers (e.g. on the number of casinos), prohibit monopolies (e.g. monopolistic state lotteries) and prohibit exclusive service provider arrangements (e.g. Indian gaming compacts). The United States is now vulnerable to additional WTO challenges against these common state policies. Play safe in this 918kiss app the best casino games are available waiting for you.

Regulatory Bans Violate Commitments: The WTO Appellate Body also ruled in the gambling case that a regulatory ban in a GATS-covered service sector constitutes a “quota of zero” – in violation of GATS market access rules that prohibit numerical limits on service operations. Thus, policies criminalizing certain acts or banning certain activities, even if they treat domestic and foreign companies alike, are now presumptively WTO-illegal if a government has made unconditional GATS commitments in a particular service sector. This implicates not only the complete and partial gambling bans held by some states and localities, but also the regulatory bans in other service sectors that the United States has signed up, or is intending to sign up, to the GATS. The United States so far has made no effort to review its past commitments to protect regulatory bans in covered areas, implicating innumerable policies. For instance, the United States has not moved to qualify its existing “advertising services” commitment to protect common state and local bans on billboard advertising, even though this was an example the U.S. lawyers raised in the gambling case, when they unsuccessfully argued that equating a regulatory ban with a “quota of zero” would undercut numerous existing policies.

Ambiguity in the Schedules Can Be Hazardous: The gambling example illustrates that a lack of clarity in the schedules can be hazardous to the public interest and state sovereignty. So far, the United States has made no effort to bring its gambling laws into compliance with the WTO ruling, and also has ignored calls by 29 state Attorneys General to withdraw the gambling sector altogether from U.S. GATS commitments. The WTO Appellate Body ruled that it is the responsibility of a WTO member country making a GATS commitment to clear up ambiguity about what its services commitments cover. In its 2005 Revised Offer, the United States has attempted to increase clarity by incorporating UN service classifications. But problems remain because: a) the United States has not done this consistently; b) the UN code has severe flaws – for instance, “services incidental to fishing” may mean only a few services related to fishing or all activities involved in fishing if they are done under contract; c) the United States continues to rely on footnotes of dubious legality, and other methods of limiting its commitments, that may or may not stand up in the event of a challenge in the WTO dispute system.

Please note both the demands and the ambiguities. Also, number of casinos in a jurisdiction, state lotteries, and casinos on reservations come under GATS rules. The US also is not protecting other services in this area from previous agreements, so similar liberalization can happen, such as mentioned in advertising. (Bolding is mine.)