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WTO online gaming negotiation deadline extended

WASHINGTON, DC -- (PRESS RELEASE) -- Yesterday's deadline to negotiate settlements the U.S. must pay the European Union and seven other trading partners as part of a World Trade Organization (WTO) violation related to Internet gambling has been extended to December 14. This extension of time to reach agreement also provides Congress further opportunity to avoid paying trade concessions worth an estimated $100 billion by regulating Internet gambling through legislation.

The Internet Gambling Regulation and Enforcement Act, introduced by U.S. Representative Barney Frank (D-MA), would regulate Internet gambling and bring the U.S. into compliance with WTO trade agreements by effectively creating a level playing field among domestic and foreign Internet gambling operators.

The WTO Internet gambling trade conflict is by far the most significant WTO case in history and the implications are enormous. "Failure by the U.S. to meaningfully engage in the compensation talks puts at risk U.S. negotiating credibility and undermines the institutional process of the WTO," said Naotaka Matsukata, a senior policy advisor with Alston & Bird and former director of policy planning for U.S. Trade Representative Robert B. Zoellick. "With potentially up to $100 billion in damages at stake, there remains a significant threat to certain U.S. industries if the matter is not resolved in a timely manner."

The WTO previously ruled, in response to a dispute filed by the Caribbean island nation of Antigua and Barbuda, that the U.S. unfairly prohibits foreign Internet gambling operators from accessing the U.S. market, while allowing domestic companies to legally accept online bets. In response, the Office of the U.S. Trade Representative announced the U.S. intention to withdraw its commitments to the WTO, thus allowing the United States to keep closed its markets to offshore based internet gambling operators. The European Union, Japan, India, Canada, Australia, Costa Rica, Macao originally joined Antigua and Barbuda in requesting talks to discuss compensation with the U.S. resulting from this trade agreement violation. Australia later dropped its claim, while Japan reached a deal with the U.S., the terms of which have not been made public. If the U.S. does not settle with each country by December 14, trade concessions will be determined by WTO arbitration.

"The USTR should seriously engage with the U.S. Congress to consider legislative solutions provided by the Frank bill, which would bring the United States into compliance with the WTO on the internet gambling case and eliminate the rationale for potentially significant economic compensation concessions to the EU and a number of other countries," commented Matsukata.

Momentum has been building for the Internet Gambling Regulation and Enforcement Act, with more members of Congress co-sponsoring the legislation. "Additional support for the Frank bill provides encouragement that the U.S. can avoid a major trade clash and paying billions in trade compensation and penalties," said Jeffrey Sandman, spokesperson of the Safe and Secure Internet Gambling Initiative. "Congressional action now to regulate Internet gambling can provide a responsible policy solution that would allow the U.S. to comply with WTO requirements. It would also give all Americans the right to make up their own mind whether to gamble online."

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