Antigua & Barbuda

Description:
Antigua, differently from other Caribbean jurisdictions, has succeeded in developing comprehensive guidelines and requirements applicable to the licensing process and operation of internet gambling sites. However, the monthly reviews and random checks were not enough to discover that one of their largest licensed operators, BetonSports, was practically broke when indicted by the US Department of Justice on racketeering, conspiracy and fraud charges in June 2006. When eight months later in February 2007, the Financial Services Regulatory Commission (FSRC) announced that it was going to supervise the process for the collections of funds owed to BetonSports by financial processors, it was probably too late. Thousands of US customers are still waiting to receive their funds from BetonSports despite the online sportsbook reached an agreement with US prosecutors in November 2006 that included a promise to return funds to American customers.

Antigua has been at the forefront of the battle to open the US market to offshore gambling operators. In 1998, Jay Cohen, founder of Antigua-based World Sports Exchange (WSEX), was the only one of 14 owners and managers of sports betting sites in the Caribbean, charged on conspiracy to illegaly transmit bets over the internet and telephone, to return to the United States and fight the case in court. In 2000, Cohen become the first (and remains the only) United States citizen to be convicted in US Federal Court for violation of the Wire Act for operating an online betting site from a jurisdiction where it was legal and regulated.

In 2003, Antigua requested the Dispute Settlement Body of the World Trade Organisation to examine whether certain measures adopted in the United States with respect to the cross-border supply of gambling and betting services were consistent with the United States' commitments and obligations under the General Agreement on Trade in Services (GATS). On November 2004, a WTO panel ruled that the US actions to prohibit cross-border gambling services offered by Antiguan operators violated the US committments to international free trade. In April 2005, the WTO Appellate Body upheld the previous ruling, adding that when it came to betting on horse racing, there appeared to be discrimination between foreign and local operators. Later in August 2005, a WTO arbitrator established that the United States had unitl April 2006 to adapt their legislation implementing the WTO recommendations and stopping discrimination against foreign betting operators. But on April 2006, the United States informed the WTO they were already in compliance with the recommendations and rulings of the Dispute Settlement Body based on a statement of the US Department of Justice that views the existing US legislation as prohibiting the interstate transmission of bets, including those on horse races. Later in July 2006, Antigua submitted a recourse requesting the WTO to find that US legislation such as the Wire Act, the Travel Act and the IGBA remained in violation of the United States' obligations under the GATS agreement and that the United States did not take measures to comply with the recommendations and rulings of the DSB. In the following months, both Antigua and the United States submitted new arguments to the WTO. In March 2007, Antigua also announced an overhaul of the Interactive Gaming and Interactive Wagering Regulations to reinforce its compliance and commitment to international best practices and best-known industry standards. Then on 30 March 2007, a three-member WTO compliance panel said the United States ignored the recommendations of the WTO's Dispute Settlement Body noting that a flourishing remote account wagering industry exists in the United States in ostensible legality, despite US claims that it prohibits all remote gambling throughout the country. At this point it become obvious that the Unites States had either to ban domestic operators offering account wagering services on horse racing across state borders or open the market to online gambling sites licensed in Antigua. The United States' coup de theatre came in May when the Trade Representative's office said the Antigua's dispute at the WTO was based on the wrong assumption and took advantage of a drafting error made by the United States, which never intended to include gambling when the GATS agreement was signed back in 1993. The Unites States announced to have started a process to withdraw gambling from the GATS agreement. Although WTO member nations are required to compensate trading partners for lost business opportunities before they are allowed to withdraw service sectors, at this point it seems unlikely that the United States will reconsider their decision.

Licensing authority:
Directorate of Offshore Gaming

Website:
http://www.antiguagaming.gov.ag

Contact:
complaints@antiguagaming.gov.ag

Resources:
The Antigua-US Wto dispute over internet gambling
WTO dispute settlement
Antigua Online Gaming Association