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Arbitrators to settle Antigua, U.S. dispute
Antigua and Barbuda officially submitted its request for $3.44 billion in compensation from the United Stated to the World Trade Organization this week. The amount is what the tiny island nation believes will make up for the loss of online gambling revenue from the United States.
The United States and Antigua and Barbuda have been locked in this battle for years now in the WTO dispute. Antigua and Barbuda had the trade regulation body look into U.S. policies for online gambling because it believes the country is violating trade regulations.
The WTO ruled in favor of Antigua and Barbuda in 2005, stating that U.S. online gambling laws that restrict or ban the business violate trade regulations it agreed to when joining the WTO.
When the United States didn't change its laws to comply with the ruling, and then also further restricted online gambling by passing the Unlawful Internet Gambling Enforcement Act (UIGEA) late in 2006, the WTO once again issued a report in early 2007 saying the nation was still not in compliance.
That ruling opened up the option for countries to seek compensation from the United States for the damage done to the online poker, casino and sports betting operations that run from within their borders.
Antigua and Barbuda is a centre for offshore Internet gaming operations, attracting large numbers of U.S. residents to its online poker, casino, and other betting games and services.
According to Forbes, Antigua has been promoting gambling and other kinds of Internet commerce to move the country away from relying so much on the tourism industry.
There are 32 online casinos licensed in the nation, which employ about 1,000 people and generate around $130 million in annual revenue.
Though tiny, the Caribbean nation was hit hard as at least one of the major betting operations on its soil was forced to shut down its U.S.-facing business and also faced prosecution in the United States.
However, the United States has already responded to the $3.44 billion compensation claim saying it is "patently excessive."
"In particular, the level sought by Antigua and Barbuda is several times higher than Antigua and Barbuda's annual Gross Domestic Product of all goods and services," the United States said in a statement in a WTO Dispute Settlement Body meeting.
The country lodged an arbitration request this week objecting to the level of sanctions being asked for and procedural issues.
While the U.S. "accepts" the outcome of the WTO rulings, it is also working to change its agreement with the WTO to exclude online gambling.
According to the Caribbean Net News, a trade source said the arbitration process normally takes about two months.
Because Americans account for 80% of the estimated $12 billion generated by online gambling around the world, the nation may also face sanctions from other countries. Several have already shown their support for Antigua and Barbuda and announced their intentions to seek compensation as well.
Australia, Canada, Costa Rica, European Communities, India, Japan and Macao have all said they plan to seek compensation.