It contends U.S. crackdowns against foreign betting sites are illegal and protectionist, since gambling for money is permitted in U.S. casinos and since online betting is allowed for state-regulated horse racing in the United States.

More details about the Antigua claim at Reuters.

The sat particularly badly with the island nation of Antigua, which complained to the WTO over what it saw as discriminatory trade practices. The WTO agreed and ruled against the United States back in April of 2007—a fact the US has more-or-less ignored. Gambling laws have always been a patchwork of contradictions; the federal government prohibits gambling across state lines but allows states to set their own laws when it comes to intra-state betting. Many states have laws that favor particular types of gaming over others; Kentucky has gone so far as to try to seize control of online gambling sites and makes no secret of its stance on horse racing. Taken as a whole, the US policy of simultaneously condemning and supporting gambling is uglier than the hypothetical love child of Janet Reno and Alan Greenspan.

The Bush Administration settled the initial Antigua complaint by offering the country concessions in other trade-related areas, but multiple European countries remain angry; the UK-based Remote Gambling Association has claimed that the US Department of Justice (DOJ) has discriminantly targeted certain websites while ignoring the operations of others. The European Commission reportedly plans to file its own complaint with the WTO. In the face of international bad feeling and an uncertain positive impact at home, it may be time for the UIGEA to fold its hand.

Source: http://arstechnica.com

The World Trade Organization says the island can impose US$21 million in sanctions against the U.S.

Finance Minister Errol Cort says officials will know in about three months whether a compromise agreement is feasible.

Court said Friday that officials agreed to extend a July 11 deadline after a U.S. delegation recently arrived in Antigua for another round of talks.

In December, the USTR provided a hint at the scope of the deals by revealing that they involved new U.S. WTO commitments for “warehousing services, technical testing services, research and development services and postal services relating to outbound international letters.”

“Americans have a right to know what kinds of trade concessions the U.S. government is granting other countries, especially when those deals have a significant impact on domestic policy and may be worth billions of dollars,” said Bonnie I. Robin-Vergeer, a Public Citizen attorney. “The Bush administration’s decision to withhold the agreement under the Freedom of Information Act (FOIA) has more to do with its desire to prevent public and congressional scrutiny of the settlement before it is enshrined in a new WTO schedule than it does with national security. FOIA requires the agreement’s release.”

According to Mark Mendel, Antigua and Barbuda’s attorney in its World Trade Organisation (WTO) dispute, the US is scheduled to put forward a proposal for the settlement of both aspects of the trade dispute by next Monday.

Mendel indicated that Antigua and Barbuda is adopting a wait and see approach to the proposal.

“I am assuming that if they are going to be good to their word, that they will have a proposal. It will be either a proposal or no proposal by the end of the month,” Mendel told the Antigua Sun yesterday.

Mendel revealed that despite the controversial US$21 million in sanctions against the US awarded by a WTO Dispute Settlement Body arbitrator last December, the pending proposal is expected to address aspects of the trade dispute which dealt with the United States’ failure to comply with the WTO’s ruling on access for Internet gaming operators.

It will also address the second aspect of the trade conflict, which stems from Antigua and Barbuda’s claim for compensation as the US seeks to withdraw from its commitment to provide market access to the sector under the WTO General Agreement on Trade in Services (GATS).

“Any settlement that we would do would be comprehensive. It would take in everything.

“They are (two separate issues) if we have to litigate them, but if we can settle something then it should all be settled in one go,” Mendel explained.

He indicated that the parties are not bound by the decision of the arbitrator if they come to a bilateral agreement.

“Between the two of yourselves, you can settle anything,” he said.

In response to a query from the SUN, Mendel said that Antigua and Barbuda has not put forward a proposal or guideline suggesting what it feels would be a reasonable settlement that it would be willing to accept:

“We’re just going to see what they come up with and then re-evaluate. We have no idea what they’re thinking.”

Earlier this year, Antigua and Barbuda filed a notice at the WTO requesting arbitration on the issue of the US declaration that it is withdrawing from its GATS commitment to allow trade access in respect of remote gaming.

“The U.S. has the right to address legitimate public policy concerns relating to Internet gambling, but discrimination against EU companies cannot be part of the policy mix,” said EU Trade Commissioner Peter Mandelson.

European companies claim a U.S. ban that forced them out of the lucrative American market discriminates against them in violation of WTO rules, while permitting domestic gambling companies, particularly those offering betting on horse races, to flourish.

This case is reminiscent of last years WTO case where Antigua and Barbuda took US to WTO court. The case become an embarrassment to Washington. Never had such a tiny nation brought a WTO complaint against the United States, which is one reason the dispute has implications well beyond the issue of gambling.In the Antigua case, and we can assume in the EU case as well, the companies complained that, before that ban, they had the right to operate under international trade laws, and that therefore the U.S. gambling ban U.S. violate WTO rules. In the end the WTO awarded Antigua and Barbuda the right to impose $21 million a year in sanctions on the United States in retaliation for the restrictions on online betting.

The Remote Gambling Association, which represents several European gambling companies, says the U.S. action is hurting their revenues and stock value as well as making them run the risk of substantial fines. It welcomed the EU’s decision to act on its complaint.

The U.S. underscored its battle against the industry when it arrested two British Internet gambling executives who were travelling through the United States in 2006.

The 2006 WTO ruling found the U.S. had the right to prevent offshore betting as a means of protecting public order and public morals. But it said Washington was breaking trade law by targeting online gambling without equal application of the rules to American operators offering remote betting on horse and dog racing.