Antigua/Barbuda Patience Wearing Thin On US iGaming Dispute

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Wednesday, August 31st, 2016 | Written by Lucy Brown

This month, Antigua and Barbuda sent a clear message to the U.S. that it had run out of patience waiting for the money that the World Trade Organization (WTO) says that it owed them, with Prime Minister of Antigua and Barbuda, Gaston Browne, stating:

“We will make further efforts to negotiate an acceptable solution with the US, but, like every other citizen and resident of our nation, our patience is wearing then.”

But will the U.S. take heed of the warning made by the tiny island nation ? It’s hard to say.

How Much is Owed?

Antigua and Barbuda claims to have generated around $21 million in annual iGaming revenues before the U.S. government decided to target gambling companies based on the island nation who had been offering their products stateside. During the decade long dispute which followed, Antigua and Barbuda claims to have lost around $200 million in revenues, with the WTO subsequently granting the island the right to reclaim $21 million of that sum by selling copyrighted material made in the U.S.

Economic Impact

During the 1990s, Antigua and Barbuda began attracting online casino operators due to their liberal regulations. Within just a few years, the online gambling industry had become a mainstay of the island nation, and in 2000 the country made $1.7 billion from the economic output derived from online gambling. By 2001, the earnings had skyrocketed to $2.4 billion, with more than 1,000 residents of Antigua and Barbuda employed in the online gambling trade. As Carl Roberts, former High Commissioner of Antigua and Barbuda to the UK, stated back in 2013:

“What was once a multi-billion dollar industry in our country, employing almost 5% of our population has now shrunk to virtually nothing.”

Background to Dispute

The U.S. and Antigua/Barbuda have maintained an online trade agreement that basically states that companies located in the U.S. and in the Caribbean country are free to sell to and provide services to citizens of the other nation; however, in 2006, the U.S. passed the Unlawful Internet Gambling Enforcement Act (UIGEA), making the offshore gambling sites based in Antigua and Barbuda illegal. Those sites had been restricted to American players, and key executives for some of the companies based in Antigua and Barbuda and the companies themselves have been prosecuted by the U.S. for attempting to offer illegal online gambling to Americans.

Antigua and Barbuda maintains that this violates the trade agreement and that the U.S. has cost them billions in tax revenue, while the U.S. says that it is within its rights to ban online gambling. In a court decision, however, the World Trade Organization court sided with Antigua and Barbuda and ordered the U.S. to pay $21 million in damages and to stop restricting access to the sites.

Flagrantly Ignoring the Regulation

The U.S. has not done anything to address the situation with Antigua and Barbuda since the ruling was handed down. The sites remain blocked and even in states where online casinos are now legal, the access has not been restored. Because the U.S. has ignored the WTO’s decision, the court has given Antigua and Barbuda permission to stop sending payments from the sale of copyrighted material to musicians, writers, film studios and others in the U.S. until they have recouped the amount of the losses.

So far, Antigua and Barbuda has continued to act in good faith and hold off on this extreme measure, as ultimately, it would be the creative people who produced the work that would be penalized under this scenario.

Patience Running Out

Last week, the Prime Minister of Antigua and Barbuda, Gaston Browne, openly said that if the U.S. does not make a move to right the wrong soon, he will move forward as the WTO court suggested. This is sure to catch the attention of performers and film studios. Maybe it will only be through their protests that the U.S. will finally come to the table to work things out with Antigua and Barbuda. Commenting on the proposals for solving the dispute so far put forward by the U.S. government, Gaston explained:

“We will never accept any one-sided agreement in which they treat us with contempt, and in which they fail to settle the issue in [a] meaningful manner. We’re hoping that as a result of that proposal we’ll be able to come to a mutually satisfactory agreement.”