U.S. to Appeal WTO Ruling on Gambling

The United States vowed Wednesday to defend its ban on cross-border Internet gambling by appealing a World Trade Organization ruling that favored the tiny Caribbean nation of Antigua.

U.S. trade officials said it was highly unlikely that the U.S. would lift its ban even if it lost its appeal.

Washington, as a last resort, could use its right under WTO rules to unilaterally revise its commitments to the organization and make clear it never intended to open its market to Internet gambling, a senior U.S. trade official said.

The decision to appeal was announced in Washington and Geneva as the WTO issued the text of the ruling in which a three-person panel found earlier that U.S. laws banning cross-border gambling on the Internet violate free-trade agreements.

“This panel report is deeply flawed,” a spokesman for U.S. Trade Representative Robert B. Zoellick said in a statement.

Details of the ruling emerged in March, when a preliminary finding was sent to the two parties involved for their comments. Both agreed then to resume talks to try to find a settlement, but the discussions failed.

In its original complaint filed in July last year, the twin-island state of Antigua and Barbuda, one of the smallest economies in the 148-nation WTO, said the U.S. law would hit hard an industry that creates a hefty chunk of its revenue.

The law bars residents of the United States, the world’s biggest single economy, from betting in cyberspace through offshore casinos, a growth industry in Antigua.

U.S. officials say the law, which bans payment for bets by credit cards or checks issued by U.S. banks or by bank transfers, is part of an effort to protect vulnerable sections of society from the dangers linked to gambling.

But Antigua argued that Washington had not listed Internet gambling as an area that it wanted to keep out of a 1994 global agreement on free trade in services.

Antigua, which has a population of 67,000, says that the industry provides jobs for about 3,000 young people who would otherwise be on the streets or have to emigrate, and that taxes on its revenue help run health and education services.

The U.S. appeal will be studied over the next three to four months by the WTO’s appellate body. A decision may come by March.

A senior U.S. trade official, who spoke on the condition of anonymity, said that although it was true that U.S. commitments to open its service-industry market included “other recreational services,” the U.S. never intended that to include activities such as Internet gambling.