It’s U.S. vs. Antigua in Internet war

Nov 16, 2004 6:40 AM

Reminiscent of America’s "war" with Grenada, the U.S. is now embroiled over Internet gambling with the tiny twin-island nation of Antigua and Barbuda.

One of the smallest economies in the 148-nation World Trade Organization, Antigua won a WTO ruling that the U.S. has violated international trade agreements by banning Americans from gambling over the Internet.

The WTO’s ruling requires the U.S. to bring state and federal laws into conformity with its commitments to the WTO.

U.S. officials have said they would appeal the ruling to the WTO’s Appellate Body. A determination should be announced in three to four months.

Even if it loses its appeal, the U.S. won’t change its commitment against Internet gambling, officials said. Instead, U.S. trade officials would revise its agreements with the WTO and make clear it never intended to open its market to Internet gambling.

The dispute over online gambling arose earlier this year after the U.S. tightened controls that hinder Internet betting. Those measures include banning bets via credit cards, bank transfers or checks issued by U.S. banks.

Antigua claims its economy has been adversely affected by the U.S. crackdown. In its complaint, Antigua said the number of licensed casino operators has plummeted from 119 in 1999 to only 28 today, and the number of Antiguans who earn their living in the gaming industry has dropped from 3,000 to about 500.

Moreover, Antigua claims the U.S. ban on Internet gambling is hypocritical because of the vast amount of legal gambling in the country. Its complaint submitted that nearly 70 percent of all Americans have gambled at least once, and that legal gambling in the U.S. has surpassed $600 billion annually.

One licensed casino operator lauded the WTO ruling and was hopeful it would soften the U.S.’s stance against online betting.

"The WTO ruling is the greatest opportunity we have to get beyond the United States’ knee-jerk hypocrisy to gambling," said Dennis Rose, senior vice president of CasinoFortune.com, an Antigua-based online casino. "America is missing out on tremendous tax revenues by keeping gambling operators offshore, despite the fact that industry analysts estimate that over five million Americans gamble online."

Rose said CasinoFortune has about two million American customers. Most of them, he said, are middle-class white females. He refused to say how much money they bet, or CasinoFortune’s yearly win amount.

Antigua didn’t release revenue figures for its gaming industry. But the country’s overall gross national product is about $750 million, which would place it at about the 1,700th rung of Forbes 2000.