The WTO GATS and Gambling Policy
Latest on WTO Gambling Case
In 2005, the WTO appellate tribunal handed down a final ruling on the U.S-Gambling case, one of only two cases that have been decided exclusively on the GATS. Because the ruling clarified how the WTO interprets ambiguous GATS language, it is a watershed decision that shows how the tribunal may rule on future GATS cases.
Antigua, which has a significant Internet gambling industry, challenged U.S. remote gambling laws under GATS rules. The WTO decided that U.S. federal, state and local gambling laws and regulations are subject to GATS rules, despite the USTR's stated position that it never intended to commit gambling services. As a result of the WTO ruling, limits on the number of service suppliers (e.g. on the number of casinos), monopolies (e.g. monopolistic state lotteries) and exclusive service provider arrangements (e.g. Indian gaming compacts) are prohibited. The WTO also ruled that regulatory bans are considered a "quota of zero," which would put state bans on gambling at risk for a challenge at the WTO.
In response to this ruling, 29 state attorneys general wrote a letter to the U.S. Trade Representative (USTR) raising serious concerns about the implications of the ruling for state regulation of gambling in particular, and for state regulatory authority in general. Finally in 2007, the Bush administration made an unprecedented decision that it will withdraw the U.S. gambling service sector from World Trade Organization (WTO) jurisdiction. Although this was good news, the fact that this action will trigger major demands by other countries for compensation under WTO rules also highlights how the fast track negotiating system has enabled a series of trade pacts that undermine the public interest.
For More Information:
- Public Citizen News Release: Bush Administration Illegally Withholding Terms of Deal That Binds New Sectors of U.S. Economy to WTO Authority (5/19/08)
- Public Citizen News Release: Latest WTO Internet Gambling Ruling Favors Antigua, Shows Effects of Harmful, Overreaching Trade Agreements on Domestic Policy (12/21/07)
- Statement from Lori Wallach: Administration Proposal to Bind Sensitive U.S. Storage, Postal Service Sectors to WTO as Compensation to EU in Gambling Case Must Obtain Congress’ OK (12/17/07)
- Public Citizen News Release: Bush administration decision to withdraw U.S. gambling sector from WTO jurisdiction highlights hazards of fast track (5/4/07)
- Public Citizen News Release: WTO ruling on U.S. Internet gambling policies clears way for trade penalties (3/30/07)
- Public Citizen News Release: Final WTO Panel Upholds Ruling Against U.S. Internet Gambling Ban (4/7/05)
- Canadian Centre for Policy Alternatives: How the GATS Undermines the Right to Regulate (11/28/05)
- Canadian Centre for Policy Alternatives: The U.S.-Gambling Decision (12/04)