Friday, May 25, 2007Contact: Keith Chamblin, NTRA
1 (859) 621-1120
US withdrawal of WTO committments on gambling confirmed

During Tuesday's regularly scheduled meeting of the World Trade Organization (WTO) Dispute Settlement Body (DSB), the DSB adopted the decision of a WTO arbitration panel after the United States confirmed that it had taken steps to formally withdraw its global trade commitment to open the U.S. market to foreign providers of gambling and betting services. The commitment had been made to the WTO during the Clinton Administration as part of the General Agreement on Trade in Services (GATS).

This is a great day for the parimutuel industry, Alex Waldrop, President and CEO of the National Thoroughbred Racing Association (NTRA), said on Tuesday. As a result of the withdrawal by the United States of its GATS commitment, the WTO will no longer play a role in the global debate on U.S. regulation of gambling services over the Internet. The NTRA has monitored this case for over two years, and we have argued from the outset that the GATS commitment should be withdrawn. Today's decision validates our long-held position.

The decision by the U.S. to withdraw its WTO commitments on gambling services effectively means that the U.S. will no longer have an international obligation to allow foreign investors to provide gambling services either cross-border, through a foreign Internet site, or through a commercial presence in the United States, such as a casino or racino.

The WTO issue surfaced two years ago in the form of a complaint by Antigua, which was seeking access to U.S. Internet gaming markets. In reviewing Antigua's case, the WTO determined that the U.S. was not in compliance with WTO standards calling for consistent applications of trade guidelines, and that the U.S. had discriminated between off- and on-shore Internet wagering operators, to the detriment of Antigua.

Tuesday's developments could represent the final step in the long-standing legal proceeding between Antigua and the United States. Antigua has procedural rights to secure permission from the WTO to retaliate against the United States, but it appears that the U.S decision to withdraw its WTO market access commitments on gambling services will neutralize the value of those rights.

The United States withdrawal of its WTO market access commitments does not require the U.S. to make any changes in current laws or practice, nor is it anticipated that the U.S. Government will make any changes as a result.