But then there is nothing run-of-the-mill about the case that Mr.
[Mark] Mendel, a Texan who was born and raised in Southern California,
has been waging against his own government before the World Trade
Organization, the body in Geneva that sets the ground rules for global
trade. It is a clash that at once challenges Washington’s effort to
prohibit online gambling while simultaneously testing the ability of
the W.T.O. to enforce its own standards.
The dispute stretches
back to 2003, when Mr. Mendel first persuaded officials in Antigua and
Barbuda, a tiny nation in the Caribbean with a population of around
70,000, to instigate a trade complaint against the United States,
claiming its ban against Americans gambling over the Internet violated
Antigua and Barbuda’s rights as a member of the W.T.O.
Antigua
is best known to Americans for its pristine beaches and tourist
attractions like historic English Harbor. But the dozens of online
casinos based there are vital to the island’s economy, serving as its
second-largest employer.
More than a few people in Washington
initially dismissed as absurd the idea that the trade organization
could claim jurisdiction over something as basic as a country’s own
policies toward gambling. Various states and the federal government,
after all, have been deeply engaged for decades in where and when to
allow the operation of casinos, Indian gambling halls, racetracks,
lotteries and the like.
But a W.T.O. panel ruled against the
United States in 2004, and its appellate body upheld that decision one
year later. In March, the organization upheld that ruling for a second
time and declared Washington out of compliance with its rules. ...
[N]ot complying with the decision presents big problems of its own for
Washington. That’s because Mr. Mendel, who is claiming $3.4 billion in
damages on behalf of Antigua, has asked the trade organization to grant
a rare form of compensation if the American government refuses to
accept the ruling: permission for Antiguans to violate intellectual
property laws by allowing them to distribute copies of American music,
movie and software products, among others. ...
In April 2005,
the trade body gave the United States one year to comply with its
ruling, but that deadline passed with little more than a statement from
Washington that it had reviewed its laws and decided it has been in
compliance all along. The case is now before an arbitration body
charged with assessing damages.
One reason for all the
interest is the David-and-Goliath aspect of the case. Another is that
the dispute, as the trade organization’s first to deal with the
Internet, is likely to serve as a major precedent in establishing rules
of commerce in an online age and dealing with such prickly issues as
China’s attempts to block online content it finds offensive.
Yet another reason the fraternity of trade lawyers and experts are so
closely watching the case, Mr. Van Den Hende said, is “that the U.S. is
not behaving as one would expect.”
“One day they’re out there
saying how scandalous it is that China doesn’t respect W.T.O.
decisions,” he said. “But then the next day there’s a dispute that
doesn’t go their way and their attitude is: The decision is completely
wrong, these judges don’t know what they’re doing, why should we
comply?” ...
Washington responded to Antigua’s complaint by
claiming it was within its rights to seek to block online gambling on
moral grounds, just as any Muslim country would be within its rights
under international trade agreements to ban the import of alcoholic
beverages. The W.T.O. rejected this argument as inconsistent with
American policy.
The general rule in the world of
international trade agreements is that a country must treat foreign
goods and services in the same manner as it treats domestic ones. The
United States, the trade body found, permits online wagering through
sites like Youbet.com, a publicly traded company that allows visitors
to place bets at horse racing tracks around the globe.
And, of
course, some form of casino gambling is legal in more than 30 states,
and even local governments advertise gambling services when states
encourage people to buy a lottery ticket.
“This isn’t a case
of forcing gambling on a population that has decided they don’t like
it,” Mr. Mendel said. “This is the world’s biggest consumer and
exporter of gambling services trying to prohibit a small country from
developing its economy by offering these same services. And we find
that deeply hypocritical.”
Indeed, despite all the obstacles
Washington has imposed, including making it a crime for banks and
credit card companies to handle Internet gambling payments, millions of
Americans still manage to play poker and place sports bets online. Many
more would certainly do so if the obstacles were removed.
