On March 30th 2007, the Geneva-based WTO (World Trade Organization) handed down its latest ruling in the ongoing dispute between Antigua/Barbuda and the USA over legality of U.S. Internet gambling restrictions.

At issue was an April 2005 WTO verdict against U.S. prohibitions on online betting. The WTO then ruled that the United States was violating the General Agreement on Trade and Services (GATS) by allowing Americans to make interstate bets on horse races over the phone or the internet with American racebooks while denying qualified foreign entities (namely enterprises in other WTO member jurisdictions) access to the U.S. market for the same services.

What followed is pretty much what you'd expect: the U.S. basically ignored the WTO ruling; Antigua filed a complaint; the U.S. appealed, claiming that they had already complied with the 2005 ruling; and the WTO handed down it's recent verdict which stated, "The panel concludes that the United States has failed to comply with the recommendations and rulings of the (WTO's) DSB (Dispute Settlement Body)."

In other words, they're standing behind the original ruling and Antigua's assertion that the U.S. is failing to cooperate. The U.S. has until May 30 to comply, meaning the U.S. must either work to ban interactive wagers on interstate horse races or open the American market to qualified foreign racebooks.

"So what?" you might ask yourself. Why won't the U.S. simply ignore this second WTO ruling, like they did the first time around? Well they certainly will appeal this recent ruling, which they have full rights to do under WTO trade dispute guidelines, but it's unlikely that that will change anything. The conditions for the current ruling still exist—U.S. excluding international involvement in online betting, U.S. non-compliance with WTO rulings, etc.—so it's difficult to imagine that the WTO will reverse itself when basically nothing has changed insofar as the dispute is concerned.

So, appeals aside, why should anyone care? I'm not the first to say this but the bottom line is that the U.S. may have backed itself into a corner. Historically, the WTO has been quite pro-American in its judgements on international trade disputes between the U.S. and other WTO members.

Japan lost to the U.S. on carbon steel and apples; Taipei lost a steel dispute; Canada lost on beef but won a judgement on lumber (which the U.S. ignored); Mexico lost over beverage taxes; and the European Union has lost several disputes concerning several European countries.

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