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US Fights WTO Over Internet Gambling

20th November

The tiny Caribbean island nation of Antigua and Barbuda holds the cards in a dispute over Internet gambling that could ultimately cost the United States billions of dollars.

If arbitration efforts fail, Antigua and other aggrieved parties, including the European Union, could begin exacting sanctions as early as next month over the U.S. decision to withdraw from a World Trade Organization accord recognizing the legality of Internet gambling.

Antigua is seeking sanctions worth $3.4 billion, and has suggested it might claim that sum by becoming a harbor for pirated intellectual property such as movies and musical recordings. Total sanctions claimed by the EU, India and other countries approach $100 billion, although the United States, in negotiations, contends that appropriate levels of compensation would be far less.

In 2002 the EU threatened to impose $4 billion in sanctions after the WTO ruled that a U.S. law granting tax breaks to exporters was illegal. The threat was withdrawn after Congress repealed the law in 2006.

Financial Services Committee Chairman Frank earlier this year introduced a bill that would lift bans on online gambling for properly licensed operators. Licenses would include protections against underage gambling, compulsive gambling and money laundering.