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The tiny Caribbean island nation of Antigua & Barbuda rocked the international trade world when its complaint against the United States on 'cross-border supply of gambling services' was accepted by the World Trade Organization. 

In the last decade scores of on-line casinos set up shop in Antigua. The subsequent crackdown by the United States against offshore gambling operators took a toll on the island nation's economy.  Antigua took its case to the WTO dispute resolution body--and won.  States were seriously alarmed by the WTO ruling because states have enormous scope to set their own gaming-sector laws.

The United States, the WTO Appellate Body concluded, had made a GATS commitment to open up its 'gambling services' market.  The U.S. argued that the commitment was made inadvertently. 

In any case, the U.S. decided to withdraw its commitment, as is allowed under the GATS.  But withdrawing a commitment also means compensating nations affected by its removal--setting in motion a new set of disputes and counter-claims that are still being worked through today.

The US-Antigua case is an important story about the broad reach of the GATS and the difficulty of foreseeing where challenges might come from.  (On-line gambling hadn't even been invented when the GATS was negotiated.)  This was also the first GATS dispute where the 'public morals' exception became a critical factor in the case.

States have generally supported the withdrawal of the U.S. commitment on "other recreation services--gambling".  Meanwhile, Congress is still trying to get information from USTR about what was included in the 'compensatory adjustment' that resulted from its withdrawal.

Utahn On Gambling: Count Us Out
Worried that national and international deals could force Utah's hand to accept online gambling, state lawmakers are pushing a resolution that urges Congress to ensure that gambling laws remain in the realm of states' rights.
The WTO Gambling Decision:
In a decision released on April 7, 2005, the WTO Appellate Body held that U.S. gambling laws are subject to challenge under the General Agreement on Trade in Services (GATS), but the WTO concluded that most federal restrictions on Internet gambling are justified by the “public morals” exception of GATS. This holding reverses a lower WTO panel which had sided with Antigua in November 2004. In its original complaint in 2003, Antigua challenged nine federal laws and 84 state laws (in all 50 states).

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