Antigua Online Gambling Judgment Could Place US WTO Representative In Bad Spot

According to the Washington Post, it is Jay Cohen, the one time sportsbook operator that the United States needs to thank. Apparently their awkward predicament with the minuscule Caribbean islands of Antigua and Barbuda with respect to the World Trade Organization were brought about by him.

At the present time, Antigua and Barbuda, with their population of 69,000, seem to be winning. Not only has the issue become an embarrassment for the United States, but it may even hurt it economically. Although it is not quite over, according to the Post article, the entire United States may have to give in to the complaint of a country whose entire payout could probably fir into the Rose Bowl.

This all started back in 2002, according to the Post article "Against All Odds,” when Cohn was jailed by U.S. prosecutors for maintaining an Internet gambling site. The site was registered in the Caribbean island nation of Antigua and Barbuda. It was shortly after this that he was informed that this treatment might in fact be in violation of global trade rules. It was at that time the Cohen encouraged the Island state to bring a complaint against the United States for its actions at the World Trade Organization.

It was back in 1998 that United States federal prosecutors brought charges against several operators, including Cohen, with having violated a law that goes back to the 60s that has to do with gambling using the phone-line. Thinking at that time that such a law could not possibly apply to Antigua, Cohen landed on United States soil and was promptly imprisoned for running a gaming site in Antigua.  

He thought at the time that no judge would accept this charge but he was convicted by a jury and given a jail sentence of 21 months. Before his entering a prison in Nevada he received a letter suggesting that this was a violation of trade agreements.

Contacting a lawyer he found out that he had grounds for action against the court sentence.
Several years previously the United States had agreed in a trade treaty to open the United States market to global competition with regard to cultural, recreational and sporting services.

Cohen contacted Antigua which filed a complaint in his behalf, saying that the country was obligated to protect the jobs of its citizens.

The United States used the defense of having to protect public moral and order, knowing that members of the World Trade Organization are permitted to ban the dissemination of goods that are deemed to be a threat to the social order, like for instance the right of a Moslim country to ban liquor imports.

United States trade representatives countered by saying that law enforcement and consumer concerns are attached to gambling in general. The hole in the argument of the U.S. came about by the fact that in some states online betting on horse races is allowed along with lotteries and other forms of chance such as for example, the U.S. sites, Xpressbet.com and Youbet.com.

Antiguans saw this as being blatantly hypocritical saying that the United States was in violation of a trade principle that is referred to as "national treatment," a principle requiring that foreign and domestic good and services be treated equally.

To ban overseas sites, the Antiguans argued, the United States would have to do the same for local sites. still the United States Congress has not been willing to pass a comprehensive ban, partly because of the fact that phone and Internet wagers are required by horse racing.

The WTO rolled against the United States and after an appeal reduced the verdict the final judgment stated that unless the United States outlaws all forms of online domestic gambling, Antigua is the winner.

Currently the Bush administration has been working at attaining legislation making all forms of Internet gambling illegal, but the horse racing industry has been blocking it. 

Now the government is pointing to Justice Department testimony that claims that all Internet wagering crossing state lines, and that includes wagering on horses, is in violation of existing laws. The horse racing industry did not accept it but the government is using that statement to argue that it is not in violation of the trade laws and that it treats all online gambling equally. This has only led to Antigua’s requesting that the WTO declare Washington as being in violation of its ruling. It is generally expected that Antigua will win again.

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