European Think Tank Forum on WTO Internet Gaming Dispute

2007 October 10, Jonny Vincent

A leading European think tank will be holding a forum to discuss the groundbreaking World Trade Organization internet gambling dispute.

The Centre for the New Europe, a leading Brussels-based think tank with a special interest in matters involving free markets and open trade, will be sponsoring a forum on Wednesday where discussions will focus on the ongoing dispute between the US and WTO members over the United States' withdrawal from their WTO commitments relating to online gambling.

The mainstream media have begun to pick up the story, as the dispute is looming as the largest in WTO history. According to analysts, the US could be facing claims of up to $100 billion from the EU and other WTO members because of illegal trade restrictions the UIGEA has placed on global gaming operators.

The tiny Caribbean island nation of Antigua was victorious over the US earlier this year at the WTO, which ruled the US violated its treaty obligations by excluding Antiguan online gambling operators while allowing domestic operators to offer online gaming to US residents. Instead of complying with the WTO ruling, the Bush Administration took the unprecedented step of withdrawing from their commitments, exposing themselves to compensation claims from WTO members.

All 151 WTO members were allowed to seek compensation from the US and the EU, along with India and five other nations, have filed notice that they intend to seek compensation.

A PRNewswire report quoted Nao Matsukata, a former Bush Administration trade official, as saying: "This is by far the most significant WTO case ever and its implications for both the US and the EU are enormous. This is also a watershed moment for the WTO because a major world power is thumbing its nose at the institution and disregarding its obligations."

Speakers at the forum will include:

• Stephen Pollard – President of the Centre for the New Europe
• Nao Matsukata – former director of policy at the office of the US Trade Representative
• Lode Van Den Hende – trade specialist at Herbert Smith who represents European gaming interests
• Dr. Sallie James – trade policy specialist at the Cato Institute (major think tank in Washington, D.C.

Already, a number of publicly listed European gaming operators such as PartyGaming and 888 Holdings have lost billions of dollars in revenue as a result of the US withdrawing from their commitments. At the same time, US giants Yahoo! and Las Vegas Sands Corporation have entered the online gaming market in Europe.

The previous largest WTO dispute was a $4.3 billion tax issue between the US and Europe which was resolved by the US adjusting its tax code. Unless the matter is settled (possibly through US Congressional ratification of the IGREA bill), the dispute will be settled through WTO arbitration.

The online gaming dispute has wider implications for global internet commerce. It is the first WTO case supporting a small nation's right to create a globally valuable sector on the internet. US search engine giant Google has suggested it will use the WTO to press China over their government's decision to bar Chinese internet users from accessing certain internet sites using the Google search function.