26-09-2007 Internet gambling experts say the WTO could require the US to pay $100 billion in trade compensations

While Judge Mary Cooper of the US District Court of Trenton, New Jersey, said she expects to rule within the next 30 days in the iMEGA case against the UIGEA, Naotaka Matsukata, a senior policy advisor with Alston & Bird and former director of policy planning for the United States Trade Representative Robert B. Zoellick, invited the United States to quickly resolve the trade dispute around internet gambling as it could result in trade compensation penalties in excess of $100 billion.

"The $3.4 billion claim by Antigua and the much larger claim of potentially over $100 billion by the seven economies seeking compensation are some of the largest penalties in the history of the WTO," stated Matsukata. "This is by far the most significant WTO case ever and its implications for both the U.S. and the EU are enormous. Given the size of the U.S. gaming market, both the potential benefit for European industry and the corresponding potential damage to U.S. companies is unprecedented."

Matsukata also said the US decision to withdraw gambling from its commitments to the WTO General Agreement on Trade in Services could undermine its negotiating credibility and risks discrediting the WTO as a rules based institution.
"How many other countries may decide to follow suit by similarly 'clarifying' previously made commitments that may now be politically difficult or economically unpopular to fulfill?" asked Matsukata, who also indicated Barney Frank's Internet Gambling Regulation and Enforcement Act as a possible solution to the US noncompliance with the WTO, considering that it would eliminate the rationale for potentially harmful compensation concessions to a number of countries.

Clive Hawkswood, CEO of the Remote Gambling Association, said regulation would also ease what the United States says are its concerns about money-laundering and consumer protection.

In related news, social policy charity CARE has called on the European Union to do everything in its power to cooperate constructively with the US following its offer of compensation for trade loss resulting from the American ban on internet gambling.

Daniel Boucher CARE’s director of parliamentary affairs, stated: "Countries banning internet gambling should not be deemed to be ‘protectionist’ but rather free traders in a moral, ‘social environment’ friendly framework. Far from seeking compensation for the US ban on internet gambling, we believe that the EU and other forward thinking nations should introduce a similar ban."