All Bets Are Off(line): Antigua's Trouble in Virtual Paradise

University of Miami Law School Institutional Repository University of Miami Inter-American Law Review 4-1-2004 All Bets Are Off(line): Antigua's Trouble in Virtual Paradise Caroline Bissett Follow this and additional works at: http://repository.law.miami.edu/umialr Part of the International Law Commons Recommended Citation Caroline Bissett, All Bets Are Off(line): Antigua's Trouble in Virtual Paradise, 35 U. Miami Inter-Am. L. Rev. 367 (2004) Available at: http://repository.law.miami.edu/umialr/vol35/iss2/6 This Comment is brought to you for free and open access by Institutional Repository. It has been accepted for inclusion in University of Miami InterAmerican Law Review by an authorized administrator of Institutional Repository. For more information, please contact . COMMENT ALL BETS ARE OFF(LINE): ANTIGUA'S TROUBLE IN VIRTUAL PARADISE I. INTRODUCTION The tiny twin-island nation of Antigua and Barbuda recently sparked a debate with the United States over U.S. restrictions affecting the cross-border supply1 of offshore Internet gambling2 and betting services, charging that the restrictions violate free trade commitments made by the United States under the General Agreement on Trade in Services (GATS). The dispute is in response to measures such as the Unlawful Internet Gambling Funding Prohibition Act,4 which would outlaw credit-card payments to Internet casinos in attempt to block offshore gambling sites from reaching American customers who are expected to spend over $2 billion dollars on some 1,800 offshore gambling sites in 2003. 5 To a small state like Antigua, being cut off from this kind of market could have severe economic ramifications. 1. GATS: Objectives, Coverage, and Disciplines, availableat http://www.wto.org/ english/tratop-efserv.e/gatsqae.htm (last visited Feb. 15, 2004) (Cross-border supply is defined to cover services flowing from the territory of one Member into the territory of another Member as opposed to consumption abroad, which refers to situations where a service consumer moves into another Member's territory to obtain a service). 2. Internet gambling involves any activity that takes place via the Internet and includes placing a bet or wager, generally defined by U.S. courts as any activity that involves a prize, consideration, and chance. A prize is anything of value chance is usually determined by assessing whether chance or skill predominates and consideration is something of value, such as money, that a person must pay to enter. Internet Gambling: An Overview of the Issues, A Report to the House Committee on Financial Services and Subcommittees on Financial Institutions and Consumer Credit,and Oversight and Investigations,GAO 03-89, Dec. 2002,at 1, n. 1, available at http: / /www.gao.gov/cgi-bin/getrptGAO-03-89. 3. United States- Measures Affecting the Cross-Border Supply of Gambling and Betting Services, WT/DS285/2 (June 3, 2003) [hereinafter U.S.-Measures Affecting the Cross-Border Supply]. 4. H.R. 2143, 108th Cong. (2003), available at http://thomas.loc.gov/; S. 627, 108th Cong. (2003), available at http://thomas.loc.gov/. 5. Internet: Senate Panel Approves Antigambling Bill, N.Y. TIMES, Aug. 1, 2003, at C5, availableat http:f/query.nytimes.com/gst/fullpage.html?res=9BODE6DF123EF 932A357BCOA9659C8B63 (last visited Feb. 15, 2004). 368 INTER-AMERICAN LAW REVIEW A. [Vol. 35:2 Globalizationand trade in services In this era of globalization and interdependence, a country's economic well being has become increasingly more dependent on outside forces.6 Although interdependence may increase a nation's wealth, every country has become vulnerable to international market forces and is impacted by the economic and social actions of other countries.7 Service providers must comply with multiple regulations, often prohibiting a practice in one place while permitting it in another! External and internal market access should be unified to ensure that the benefits of free market access are not precluded by internal or domestic trade regulations.' This idea of unity is reflected in the scope of the market access commitments made by the World Trade Organization (WTO) members under the General Agreement on Trade in Services (GATS).'1 The GATS emerged in January 1995 in the Uruguay Round and was inspired by many of the same objectives as its trade in goods counterpart, the General Agreement on Tariffs and Trade (GATT).1 Both agreements aim to create a credible and reliable system of international trade rules, ensure non-discrimination or fair and equal treatment for all Members, stimulate economic activity through binding trade policies, and promote development and trade by progressive liberalization. 2 The GATS is one of the only sets of multilateral rules governing national measures affecting trade in services and contains both general obligations binding on all 144 WTO members and specific national schedules of 13 commitments. 6. Yair Aharoni, Changing Role of Government in Services, in CHANGING ROLES at 16 (Yair Aharoni et al. eds., 1997). 7. Id. at 17. 8. Kalypso Nicolaidis and Joel P. Trachtman, Liberalization, Regulation, and Recognition for Services Trade, in SERVICES TRADE IN THE WESTERN HEMISPHERE 44 (Sherry M. Stephenson, ed., 2000). 9. GUIDE TO THE GATS: AN OVERVIEW OF THE ISSUES FOR FURTHER OF STATE INTERVENTION IN SERVICES IN AN ERA OF OPEN INTERNATIONAL MARKETS, LIBERALIZATION OF TRAnDE IN SERVICES 4 (WTO Secretariat ed., 90-411-9775-3, 2000). 10. Id. 11. GATS: Objectives, Coverage, and Disciplines, available at http://www.wto.org/ englishltratop e/serv_elgatsqae.htm (last visited Feb. 15, 2004). 12. Id. 13. GATS: Fact and Fiction at http:/www.wto.org/englishltratop-e/serv-e/gatsfactfiction_e.doc, available at http://www.wto.orglenglislhtratop-e/serv-e/gats-fact fictione.htm; see General Agreement on Trade in Services, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1B, LEGAL INSTRUMENTS-RESULTS OF THE URUGUAY ROUND vol. 31,33 I.L.M. 44 (1994) 2004] TROUBLE IN VIRTUAL PARADISE B. U.S. bill as a possible violation of GATS 369 The proposed U.S. ban on the use of credit cards and other financial instruments for Internet gambling effectively bans the supply of any offshore gambling and betting services to the United States, yet it continues to allow traditional brick-and-mortar casino gambling, horse and dog racing, lotteries, and other gambling services within its borders. 4 It is an internal regulation that acts primarily as an external trade barrier, closing off the U.S. gambling and betting services market from foreign providers. The United States identifies public morality and money laundering concerns as the legislative basis for the bill, but primarily cites public policy and morality as the grounds for exemption from its GATS commitments." Whether these grounds can exempt the United States from its specific free trade and non-discrimination commitments in this industry will soon (...truncated)