Antigua Gives US End-of-Year Ultimatum on Online Gambling Dispute

Posted on: December 3, 2016, 12:57h. 

Last updated on: December 3, 2016, 12:57h.

Antigua-US online gaming trade dispute
Gaston Browne, Prime Minister of Antigua and Barbuda believes the US owes his country over $250 million and that the time for talk is over. (Image: Caribbean 350)

The tiny Caribbean island nation of Antigua and Barbuda has been engaged in a David and Goliath trade war with the United States for the past 15 years over online gambling, and now it appears its patience is finally wearing thin.

Whether this will register on the consciousness of its all-powerful neighbor remains to be seen, but David has a potent stone in his sling, one he has so far refrained from using for the best part of a decade.

This week, Antigua gave the United States an ultimatum: pay us what we are owed, or we will take it by other means.

Back story needed? OK, here goes.

Landmark WTO Ruling

Antigua was the first jurisdiction to create a framework for online gambling regulation, back in 1994 when the industry was in its supreme infancy. To put that into perspective, the first ever real-money online casino bet wasn’t enacted until 1996.

Meanwhile, a beneficial tax regime for the nascent industry, plus millions of dollars of investment in tech infrastructure, soon began drawing the pioneers of online gaming to the islands’ shores. By 2000, the islands had 93 online gambling licensees that were turning in $7 billion in revenue.

But a crackdown on online gambling from the US in the early noughties, and on sports betting in particular, quickly decimated the industry on the islands. By 2002, without the ability to market to US citizens, the number of operators had dropped to 38 and, by 2003 over 80 percent of those licensees had left.

Antigua looked to the World Trade Organization (WTO) for help, and perhaps as much to its own surprise as anyone’s, it won.

The WTO ruled that the US stance violated the General Agreement on Trades and Services (GATS), an international treaty designed to remove barriers to trade, drawn up by the WTO in 1995, and signed by the US.

The WTO ruled in favor of the islands in 2004, and again in 2007 following the passage of UIGEA.

Pirates of the Caribbean

The WTO awarded Antigua $21 million in damages annually, dated back to 2004, which means that the US’s debt now stands at over $250 million. Except that the US refuses to acknowledge it.

The WTO has also granted Antigua recourse to collect its dues by offering it royalty-free digital downloads of US intellectual property to its citizens, things like music, films, TV shows and books.

Until now, the islands have preferred to negotiate their way to a settlement, but this strategy has proved fruitless, and according to Prime Minister Gaston Browne, the time for talk is over.

“Antiguan and Barbudan workers and their families are yet to see the US compensate our country for the sum of US$21 million per year since 2007 that the WTO ruled is due to our country,” he said.

“If an appropriate and beneficial settlement is not reached with the US by year-end, the government will be compelled to take action to enforce the suspension of copyright on the sale of US intellectual property, consistent with the award of the [WTO].”