US failed to comply with Internet ruling, WTO says


Sun, Apr 01, 2007 - Page 11

The US has failed to comply with a ruling that it illegally restricts Internet gambling sites based overseas, the WTO said on Friday, opening the door to possible commercial sanctions unless Washington changes its rules governing online betting.

In a 215-page decision, a three-member WTO compliance panel sided with Antigua and Barbuda in ruling that Washington had failed to change legislation that unfairly targets offshore casinos. The Geneva-based trade referee has said Washington can maintain restrictions on online gambling as long as its laws are equally applied to US operators offering remote betting on horse racing.

Shares in UK gaming stocks rose after the announcement. Leisure & Gaming PLC closed up 11 percent at US$0.38, while PartyGaming PLC was 4.5 percent higher at US$1.02 and 888 Holdings PLC rose 3 percent to US$2.46.

"It vindicates all that we have been saying for years about the discriminatory trade practices of the United States in this area, and we look forward to the United States opening its markets," Antiguan Finance Minister Errol Cort said in a statement.

Washington claimed victory in the WTO's initial ruling two years ago because the body recognized its right to prevent offshore betting as a means of protecting public order and public morals. But the US acknowledged on Friday that the latest decision was a setback.

"The compliance panel did not agree with the United States that we had taken the necessary steps to comply with the WTO recommendations," said Gretchen Hamel, a spokeswoman for the office of the US Trade Representative.

However, she said: "Nothing in the panel's report undermines the broad, favorable results that the United States obtained from the WTO in April 2005."

Washington has yet to say if it will appeal the compliance panel's findings. A final ruling upholding Antigua's claims would allow the twin-island nation to seek trade sanctions on the US for its failure to comply.