Insights: The US-Antigua WTO Settlement

It's a very complex case, so we've asked our experts to tell us what they think about the decision and what it means -- particularly to the parties they represent. What follows is the second installment in a series of WTO "Insights" pieces, which began earlier this month. Click here to read the first installment.

Clive Hawkswood: The trend over the last few years has been for the industry to have great hopes that some treaty (i.e. General Agreement on Trade and Services) or piece of case law (i.e. the Gambelli case in the European Court of Justice) will ride to our rescue and unpick the web of irrational and protectionist rules that seek to keep us at arm's-length from various markets, including the United States.

We should have learned by now that success will not come in leaps and bounds, but instead by a gradual chipping away at the industry’s opponents who may not have great arguments when it comes to logic or fairness, but do have the advantage of being sovereign states or having the direct support of those states.

From that standpoint it will always be an unequal struggle and we should salute any triumph no matter how small; but because those triumphs rarely meet our aspirations they do tend to be treated with disappointment.

That is why there were such mixed responses to the WTO ruling involving Antigua. Antigua bid high and had a low settlement imposed on it. It was still a lot higher than the U.S. Trade Representative had suggested it should be. Does that make it good or bad? In a way, it doesn’t matter because as an industry we now have to take it and put it to best use.

The sums involved won’t bring any U.S. administration to its knees, but the principle at least was fully supported by the WTO, and that is an important brick in the wall.

At the same time the United States sought to withdraw its commitments under GATS, and that meant it had to offer concessions to its trading partners in order to get their agreement. One of those was of course the European Union, and we were fortunate to have in place a commissioner, in the shape of Peter Mandelson, who saw the inequity of the U.S. position and was willing to say so publicly.

The deal that was eventually reached between the United States and the European Union was well below our expectations, but interestingly the EU officials involved felt that they had held out for a good deal. As ever, it’s a question of perception.

The bottom line for the Remote Gambling Association was that the United States had got off lightly, so we cast around for ways to keep the fight going. Aside from the usual lobbying efforts, the best legal route open to us was to lodge a trade barrier complaint with the European Commission.

This opens up a slightly different front and allows us to focus much more on the selective and discriminatory prosecutions pursued by the U.S. authorities. We believe we have a strong case and at the time of writing we are waiting to hear if the Commission will launch a full enquiry on our behalf. If they do so and it eventually finds in our favor, then they will take the case to the WTO (unless some settlement can be reached before then).

In short, it would be wrong to judge any of these initiatives in isolation, but taken together they are making it very hard to keep the regulation of online gambling off of the U.S. political agenda. They have served to raise fundamental questions about the nature of international trade and the reliability of the United States as a trading ally. These are issues that will prompt greater debate in the United States and will hopefully lead to an increasing number of U.S. politicians asking why the credibility of the country and its economic well-being are being brought into question just to keep reputable, well regulated gambling companies out of the US market.

Antigua’s efforts have certainly not been wasted and neither has ours. We just need to remember that we won’t hit the jackpot every time, but, as any good gambler will tell you, it’s always better to have a small win than no wins at all.

Clive Hawkswood is Chief Executive of the United Kingdom's Remote Gambling Association, which represents the interests of some of the industry's most well-known companies. Formerly, Clive was head of the Betting & Racing Branch at the Department for Culture, Media & Sport (DCMS). This is the Government department that, from June 2001, has had responsibility for the British gambling laws and policies. Prior to that the Home Office had held these responsibilities and while there Clive had spent time in both the Gambling Section and the Horseracing Policy Team. Earlier in his career he also spent several years working in the bookmaking industry. He is closely involved with the review of Britain's current gambling laws and has taken the lead on all related betting and remote gambling issues.