Antigua & Barbuda may get chance to market online gaming to US

"I think it gives us a chance to have market access, which is what we've really been wanting all these years," Antigua counsel Mark Mendel said.

Antigua & Barbuda’s attorney in the country’s seven-year-old gaming dispute with the United States last week said the US Department of Justice’s reversed opinion on what forms of Internet gaming were covered by the Federal 1961 Wire Act should lead the way to a resolution of the matter.

Until now, the Justice Department had held that the Wire Act makes intrastate online gambling illegal. Its new interpretation, written by Justice Department attorneys in response to requests for clarification from New York and Illinois, concluded that the law instead specifically outlaws such wagering on sports, not nonsports gambling (such as lotteries and poker) within states or even across state borders.

Reacting last week to the US assistant attorney general’s view on the matter, Antigua’s counsel Mark Mendel stated, “I think it is a very, very positive development. Personally, I think this would be a great time to go back to the US government and say, in light of all the things that have happened, now there is no excuse for the US government not to deal with Antigua in a fair way and in a way that allows us to reap the benefits of the victory we got at the World Trade Organisation (WTO). All the excuses they’ve used in the past are now completely gone.”

The memorandum opinion of the department was delivered on September 20, 2011, but only made public last Friday, just ahead of a long holiday weekend. The opinion regarding the issue was sought by the two states for clarification on the lawfulness to use Internet and out-of-state transaction processors to sell lottery tickets to in-state adults.

The Justice Department subsequently concluded “interstate transmissions of wire communications that do not relate to a sporting event or contest fall outside the reach of the Wire Act.”

Mendel’s interpretation is that it brings a new chapter to the dispute, in that the US “will still say (their) laws prohibit other countries from offering these services to (their) citizens but that can’t stand. If they allow it within their own country then they have to allow it from other countries.”

The expert on finance law and offshore trading added that Antigua & Barbuda’s refusal to allow the US to change their treaty obligations means “this will be a great time for Antigua since we are the beneficiary from that (WTO) ruling … I think this is a great time to go in there and say, ‘now you’ve said this,’ there needs to be room in there for us.”

The WTO decision to which Mendel referred came in 2004, when a panel ruled against the US, saying that by banning US citizens from participating in Antiguan online gaming activities it was in breach of its commitment to free trade in betting and gambling services in its schedule of commitments to the General Agreement on Trade in Services (GATS). A year later its appellate body upheld the decision.

However, the US did not comply with the ruling and in early 2005 the WTO gave the country one year to adhere. As a result of the ban, the twin island claimed annual damages of us$ 3.44 billion, but was subsequently awarded the right to levy us$ 21 million in sanctions on US patents, copyrights and other intellectual property.

The deadline passed and nothing changed as the US maintained it had been acting according with its own laws.

With the support of the ruling, Mendel said, “The whole goal of the case was to allow us to offer these services fairly to American consumers and I think what this probably does, if we play our hand right and go about it in the proper way, I think it gives us a chance to have market access which is what we’ve really been wanting all these years.”