U.S. Slow to Change Internet Gaming Laws

A dispute over Internet gambling between the United States and the tiny Caribbean nation of Antigua and Barbuda threatens to be renewed, as the deadline for U.S. legal changes has arrived. After Antigua won its World Trade Organization case, forcing the United States to regulate, not merely outlaw, Internet gambling, the issue seemed settled. But American law hasn't changed in accordance with the ruling. Antigua is contemplating its options.

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MELISSA BLOCK, host:

This is ALL THINGS CONSIDERED from NPR News. I'm Melissa Block.

Today is a big day for the tiny Caribbean nation of Antigua and Barbuda. A few months ago, Antigua won a case against the U.S. at the World Trade Organization. The subject, Internet gambling.

Today is the day the U.S. is supposed to come into compliance with world trade rules, but so far the U.S. is showing no sign of changing its laws on Internet gambling, so Antigua is contemplating its options.

NPR's Adam Davidson has been following this story and joins us now. And Adam, explain what the U.S. was doing that the WTO said was illegal.

ADAM DAVISON reporting:

They were breaking the cardinal rule of international trade law, at least according to the government of Antigua. The U.S. was saying that foreign companies, like companies from Antigua and other countries, were not allowed to provide Internet gambling services to American citizens. But American companies could provide gambling services, specifically horseracing betting, through the Internet to U.S. citizens. And according to the World trade law, you cannot allow American companies to do something that you don't allow foreign companies to do.

BLOCK: Well how did it come about that this tiny Caribbean country took on the U.S. before the World Trade Organization?

DAVIDSON: I really think of this story as sort of the little lost suit that could. It all starts with a bookie from Long Island named Jay. Jay Cohen started this company. He moved to Antigua specifically to get away from the U.S. anti-gambling laws, created the World Sports Exchange, which became a very successful company selling gambling services to Americans, primarily.

And one day he was back home visiting his family on Long Island and he got arrested. He went to trial and was found guilty and ended up, of all places, in a prison in Las Vegas. And while he was there he was very bored, he was very bitter, and one day he got a letter. He said it was an insane, rambling letter from some crazy guy who had heard about him. But in this crazy letter, the man suggested that Jay sue the U.S. government under WTO rules, and this triggered something.

Jay called his college roommate, who was a lawyer, who had never done anything having to do with world trade law. Somehow his college roommate was able to convince the Antiguan government to let him represent them. They went to World Trade Organization Court and they won.

BLOCK: Well, Jay Cohen has clearly got a stake in all this. Who else could be affected?

DAVIDSON: Well, it certainly does affect the gambling industry. I mean, sports betting, when you add the many companies all over the world that are interested in Internet gambling you're talking about many billions of dollars. But the real concern about this case is the long-term implications for world trade law.

One concern is that the U.S. made a mistake in the way the U.S. wrote its gambling laws. Basically, the U.S. accidentally allowed the WTO to rule over its own domestic gambling laws. What this has done is sent a chill through many countries who have thought, well, if the U.S., the most powerful country in the world, can make a mistake, we probably all could make mistakes.

The other issue that concerns at least some people is that the U.S. is effectively saying we don't care about world trade law. We are big and strong and Antigua is small, and so we're going to allow mite to be right rather than law to be right.

BLOCK: Well does Antigua have any trade weapons in its arsenal that it can use against the United States here?

DAVIDSON: Well what it would normally do is just impose sanctions on certain U.S. goods. But of course, Antigua is a tiny country. It can't really have an impact on the U.S. in that way. So Antigua is exploring violating U.S. copyright protections. In other words, Antigua, in retaliation to the U.S., would flood the U.S. with knock-offs of movies and software and music. The Americans say that's illegal, Antigua will never get away with it. But Antigua is clearly trying to figure out what slingshot this David could use against the U.S. Goliath.

BLOCK: NPR's Adam Davidson in New York, thank you.

DAVIDSON: Thank you Melissa.

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