WORLD TRADE  
ORGANIZATION   
WT/DS285/R 
10 November 2004 
 (04-2687) 
 Original:   English 
  
 
     
 
UNITED STATES – MEASURES AFFECTING THE 
CROSS-BORDER SUPPLY OF GAMBLING 
AND BETTING SERVICES 
 
  
Report of the Panel  
  WT/DS285/R 
 Page i 
 
 
TABLE OF CONTENTS 
 
Page 
I. INTRODUCTION .................................................................................................................. ................ 1  
II. CONCLUSIONS REQUESTED BY THE PARTIES ......................................................................... 2  
III. ARGUMENTS OF THE PART IES ......................................................................................................  2 
A. FACTUAL ARGUMENTS  ..................................................................................................................... 2  
B. LEGAL ARGUMENTS  ....................................................................................................................... 15  
1. Applicability of the GATS ................................................................................................... 1 5 
2. As to whether the United States has undertaken a specific commitment on gambling 
and betting se rvices .......................................................................................................... .. 16 
3. The measure(s)  at issue ...................................................................................................... 31 
4. GATS Artic le XVI .............................................................................................................. . 51 
5. GATS Artic le XVII ............................................................................................................. . 58 
(a) "Likeness" of services and service s uppliers  ............................................................................. 58  
(b) Treatment no le ss favourable .................................................................................................. .. 88 
6. GATS Artic le VI ............................................................................................................... ... 95 
7. GATS Artic le XI ............................................................................................................... ... 97 
8. GATS Artic le XIV .............................................................................................................. . 99 
IV. ARGUMENTS OF THE THIRD PARTIES .................................................................................... 114  
A. CANADA  .............................................................................................................................. ......... 114  
B. EUROPEAN COMMUNITIES  ............................................................................................................ 120  
C. JAPAN  .............................................................................................................................. ............. 129  
D. MEXICO  .............................................................................................................................. .......... 131  
E. CHINESE TAIPEI  ............................................................................................................................ 1 31 
V. INTERIM SECTION ............................................................................................................... .......... 131  
A. PUBLIC RELEASE OF THE CONFIDENTIAL INTERIM REPORT  ........................................................... 131  
B. EDITORIAL /TYPOGRAPHICAL CHANGES  ........................................................................................ 133  
C. MEMBERS ' RIGHT TO REGULATE AND TO PROHIBIT GAMBLING AND BETTING SERVICES  ............... 133  
D. THE US SCHEDULE  ....................................................................................................................... 134  
E. MEASURES AFFECTING THE CROSS -BORDER SUPPLY OF TRADE IN SERVICES  ................................ 135  
F. ARTICLE XIV ........................................................................................................................... .... 135  
VI. FINDINGS ...................................................................................................................... .................... 136  
A. INTRODUCTION  ............................................................................................................................. 136 
1. Terms of reference of  this Pa nel ....................................................................................... 136  
2. Structure of this Panel Repo rt .......................................................................................... 136  
3. Interpretation of WT O provisions ..................................................................................... 137  
4. Burden of  proof................................................................................................................ . 138 
5. Judicial economy ..............................................................................................................  139 
6. Definitional issues ........................................................................................................... . 140 
(a) Definition of "gambling a nd betting se rvices " ........................................................................ 140  
(b) "Cross-border" and "r emote" supply ....................................................................................... 143  
B. HAS THE UNITED STATES UNDERTAKEN SPECIFIC COMMITMENTS ON GAMBLING AND 
BETTING  SERVICES ? ..................................................................................................................... 144  
1. Claims and main argument s of the pa rties ....................................................................... 144  
2. Assessment by the Panel ................................................................................................... 145  
(a) Method of interpretation to be  adopted by the Panel .............................................................. 145  
(b) Application of the general rules of tr eaty interpretation to this case ....................................... 147  
(i) Effective inte rpretation .................................................................................................. 147  
(ii) Ordinary meaning of the te rm ....................................................................................... 148  
(iii) ...  ordinary meaning ... in light of the co ntext ... ........................................................... 152  
1993 Scheduling Guidelines and W/120 as part of th e context ...................................... 153  
Interpreting the US Schedule in the context of document W/120 and the 1993 
Scheduling Guid elines ................................................................................................... 156  
Other Members' GATS Sc hedules as part of the context for the interpretation of the 
US Schedule .................................................................................................................. 159 
The US Schedule as context for the in terpretation of sub- sector 10.D ........................... 160  WT/DS285/R 
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(iv) ... ordinary meaning in light of th e object and purpose of the treaty.............................. 161  
(v) Conclusions under Article 31 of the Vienna Conventio n .............................................. 162  
(vi) Supplementary means of  interpre tation ......................................................................... 162  
Preparatory work ........................................................................................................... 16 3 
Cover-notes to US draft Schedu les during the Ur uguay Round  ............................... 163  
Other supplementary means of interpre tation ................................................................ 165  
US practice – USIT C Docume nt ............................................................................. 165  
(c) Conclusi on .................................................................................................................... .......... 168  
(d) Final comments ................................................................................................................ ....... 168  
C. THE MEASURE (S) AT ISSUE  ........................................................................................................... 169  
1. Claims and main argument s of the pa rties ....................................................................... 169  
2. Relevant WTO pr ovisions ................................................................................................. 170  
3. Assessment by the Panel ................................................................................................... 171  
(a) "Measures" being challenged .................................................................................................. 171 
(i) Legal standard relating to the identificat ion of the measures being challenged ............. 171  
(ii) Identification of "measures" by Antigua in this  dispute ................................................ 172  
(b) Can Antigua challenge a "total prohibition" on the cross-border supply of gambling and 
betting services under US law as a measure in and of itself in the present dis pute? ............... 176  
(c) Measures that the Panel s hould consider in determining whether the GATS has been 
violated ...................................................................................................................... ............. 180  
(i) Specific appli cations  ...................................................................................................... 18 1 
(ii) Practice ...................................................................................................................... .... 183  
(iii) Laws .......................................................................................................................... .... 184  
Laws referred to and/or discussed in An tigua's submissions but not contained in 
Antigua's Pane l request .................................................................................................. 187  
Laws contained in the Panel re quest but not discussed to an  extent that could enable 
Antigua to provide a prim a facie demons tration ............................................................ 188  
Laws contained in the Panel request and discussed in Antigua's submissions ............... 189  
Federal la ws ............................................................................................................. 189  
State laws ................................................................................................................. 19 0 
Colorado  ............................................................................................................ 190  
Louisian a ........................................................................................................... 191  
Massachuse tts .................................................................................................... 191  
Minnesota  .......................................................................................................... 191  
New Jersey ........................................................................................................ 192  
New York .......................................................................................................... 193  
South Da kota ..................................................................................................... 194  
Utah ................................................................................................................... 194  
(iv) Summary .......................................................................................................................  194 
(d) "Measures ... affecting trade in se rvices" ................................................................................ 195  
D. CLAIMS OF VIOLATION OF THE UNITED STATES ' MARKET ACCESS COMMITMENT UNDER 
ARTICLE  XVI OF THE GATS  ........................................................................................................... 196  
1. Claims and main argument s of the pa rties ....................................................................... 196  
2. Relevant GATS pr ovisions ................................................................................................ 197  
3. Assessment by the Panel ................................................................................................... 198  
(a) Introducti on .................................................................................................................. .......... 198  
(b) Interpretation and scope  of Article XVI .................................................................................. 198  
(i) The first paragraph of Article XVI ................................................................................ 198  
"None" inscribed under "Marke t Access Limi tations" ................................................... 199  
"Mode 1" and its inherent  "means of de livery" .............................................................. 202  
Restrictions with respect to certain services covered in a sector or sub-sector .............. 203  
(ii) The second paragraph of Article  XVI ............................................................................ 203  
(iii) The scope of the first and second  paragraphs of Article XVI ........................................ 205  
Ordinary m eaning .......................................................................................................... 205  
The context: the relationship between Articles XVI, XVII, XVIII, VI:4 and 5 ............. 205  
Object and purpose  of the GATS ................................................................................... 208  
(iv) Conclusi on .................................................................................................................... . 209 
(c) Interpretation of Article XVI:2 (a) and Articl e XVI:2(c) ......................................................... 209  
(i) Article XVI:2, subpa ragraph (a) .................................................................................... 209  
Service s uppliers ............................................................................................................ 209 
Illustrative or exhaustiv e list of lim itations ? .................................................................. 210  
"Limitations on the number of service suppliers in the form of numerical quotas" ....... 210  
Limitation on all or part of  a scheduled commitment .............................................. 211  
Limitation on one, several or all means of delivery under mode  1 .......................... 212  
(ii) Article XVI:2, subpa ragraph (c) .................................................................................... 212   WT/DS285/R 
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Limitations "expressed ... in  the form of  a quota" .......................................................... 212  
Service operations or service ou tput .............................................................................. 214  
Limitation on all or part of  a scheduled commitmen t .................................................... 214  
Limitation on one, several or all means of delivery under mode  1 ................................ 214  
(d) Application of the legal standard  to the facts of  this case ....................................................... 215  
(i) US commitment on ma rket access ................................................................................. 215  
(ii) Measures at issue ........................................................................................................... 2 15 
Federal laws .................................................................................................................. . 215 
The Wire Act ........................................................................................................... 215  
The Travel  Act ......................................................................................................... 216  
The Illegal Gambli ng Business Act ......................................................................... 218  
State laws .................................................................................................................... ... 220 
Colorado  .................................................................................................................. 220  
Louisian a ................................................................................................................. 220  
Massachuse tts .......................................................................................................... 221  
Minnesota  ................................................................................................................ 222  
New Jersey .............................................................................................................. 223  
New York ................................................................................................................ 224  
South Da kota ........................................................................................................... 225  
Utah ......................................................................................................................... 226 
Cumulative Effect of the Wire Act, the Travel Act (when read together with relevant state 
laws) and the Illegal Gambling Business Act (when read togeth er with the state laws of 
Louisiana, Massachusetts, South Dakota a nd Utah ) ...................................................... 227  
(iii) Conclusi on .................................................................................................................... . 227 
E. CLAIMS OF VIOLATION OF THE UNITED STATES ' NATIONAL TREATMENT COMMITMENT 
UNDER ARTICLE  XVII OF THE GATS  ............................................................................................... 228  
1. Claims and main argument s of the pa rties ....................................................................... 228  
2. Assessment by the Panel ................................................................................................... 228  
F. CLAIMS OF VIOLATION UNDER ARTICLE  VI OF THE GATS  .............................................................. 229  
1. Claims and main argument s of the pa rties ....................................................................... 229  
2. Relevant GATS pr ovisions ................................................................................................ 230  
3. Assessment by the Panel ................................................................................................... 230  
G. CLAIM UNDER ARTICLE  XI OF THE GATS  ...................................................................................... 232  
1. Claims and main argument s of the pa rties ....................................................................... 232  
2. Relevant GATS pr ovisions ................................................................................................ 232  
3. Assessment by the Panel ................................................................................................... 233  
H. DEFENCE UNDER ARTICLE  XIV OF THE GATS  ................................................................................ 233  
1. Claims and main argument s of the pa rties ....................................................................... 233  
2. Relevant GATS pr ovisions ................................................................................................ 234  
3. Assessment by the Panel ................................................................................................... 234  
(a) Introducti on .................................................................................................................. .......... 234  
(b) Measures at issue ............................................................................................................. ....... 235  
(c) Provisional justification und er Article XIV(a) ........................................................................ 236  
(i) The legal standard unde r Article XI V(a) ....................................................................... 236  
Measures ... to "protect public morals " or to "maintain public orde r" ............................ 236  
Measures "necessary" to protect public mo rals or to mainta in public order .................. 239  
(ii) Applying the legal standard under Article XIV(a) to the fact s of this  case .................... 241  
Are the challenged measures so as to "protect public morals" or to "maintain public 
order" within the meanin g of Article XIV(a)? ............................................................... 241  
Are the challenged measures "necessary" to pr otect public morals or to maintain public 
order? ........................................................................................................................ ..... 242  
Importance of interests or  values pr otected ............................................................. 243  
Contribution to e nds pursu ed ................................................................................... 244  
Trade impa ct ............................................................................................................ 244  
"Weighing and Ba lancing" ...................................................................................... 254  
Overall conclusion on whether the Wire Act, the Travel Act and the Illegal Gambling 
Business Act are provisionally jus tified under Articl e XIV(a)  ...................................... 254  
(d) Provisional justification und er Article XIV(c) ........................................................................ 255  
(i) The legal standard unde r Article XI V(c) ....................................................................... 255  
Measures to "secure compliance" with laws or regulati ons ........................................... 255  
"Laws or regulations which are not inconsiste nt with the provisions of this Agreement"
 .............................................................................................................................. ......... 256  
Measure "necessary" to secure complia nce with laws or  regulatio ns ............................ 256  
(ii) Applying the legal standard under Article XIV(c) to the fact s of this  case .................... 256  WT/DS285/R 
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What are the "laws and regulations" relied upon by the Un ited Stat es? ......................... 256  
Do the challenged measures secure co mpliance with the RICO statute? ....................... 258  
Existence of a measure that "secures co mpliance" with the RICO statute ............... 258  
"Necessity" of the measure take n to secure co mpliance .......................................... 259  
Overall conclusion on whether the Wire Act, the Travel Act and the Illegal Gambling 
Business Act are provisionally jus tified under Articl e XIV(c)  ...................................... 261  
(e) The chapeau of Article XIV ....................................................................................................  261 
(i) The legal standard under the chapeau of Ar ticle XIV .................................................... 262  
(ii) Application of the legal standard under the chapeau of Article XIV to the facts of 
this case ..................................................................................................................... .... 265  
Enforcement against local suppl iers ............................................................................... 265  
Video lottery terminals .................................................................................................. 267  
Interstate Hors eracing Act ............................................................................................. 268  
Nevada ........................................................................................................................ ... 269 
Letters from the President of the North American Association of State and Provincial 
Lotteries ..................................................................................................................... .... 270  
Conclusi on .................................................................................................................... . 270 
(f) Overall conclusion on Article XIV ......................................................................................... 271  
VII. CONCLUSIONS, CONCLUDING REMARKS AND RECOMMENDATIONS ......................... 271  
A. CONCLUSIONS  ..............................................................................................................................  271 
B. CONCLUDING REMARKS BY THE PANEL  ......................................................................................... 273  
C. RECOMMENDATIONS  .................................................................................................................... 273  
 
  WT/DS285/R 
 Page v 
 
 
LIST OF ANNEXES 
 
Annex A Working Procedures for the Panel in  United States – Measures Affecting the 
Cross-Border Supply of Gambling and Betting Services 
 
Annex B Request for Preliminary Rulings 
 
Annex C Panel's Questions to the Parties and Third Parties 
 
Annex D Request for the Establishment of a Panel by Antigua and Barbuda 
 
Annex E Laws relied upon by Antigua in claiming that the cross-border supply of gambling 
and betting services is prohibited in the United States  
Annex F Text of State laws that the Panel will consider in examining Antigua's claims 
 
Annex G List of exhibits submitted by the parties 
 
  WT/DS285/R 
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ABBREVIATIONS USED FOR DISPUTE SETTLEMENT CASES 
REFERRED TO IN THE REPORT 
 
SHORT TITLE  FULL TITLE  
Argentina – Footwear (EC)  Appellate Body Report, Argentina – Safeguard Measures on Imports of 
Footwear , WT/DS121/AB/R, adopted 12 January 2000, DSR 2000:I, 515 
Argentina – Hides and 
Leather Panel Report, Argentina – Measures Affecting the Export of Bovine Hides and 
the Import of Finished Leather,  WT/DS155/R, adopted 16 February 2001, DSR 
2001:V, 2021 
Argentina – Textiles and 
Apparel  Panel Report, Argentina – Measures Affecting Imports of Footwear, Textiles, 
Apparel and Other Items , WT/DS56/R, adopted 22 April 1998, as modified by the 
Appellate Body Report, WT/DS56/AB/R, DSR 1998:III, 1033 
Australia – Salmon  Appellate Body Report, Australia – Measures Affecting Importation of Salmon , 
WT/DS18/AB/R, adopted 6 November 1998, DSR 1998:VIII, 3327 
Border Tax Adjustments Report of the Working Party on Border Tax Adjustments, adopted 2 December 
1970, BISD 18S/97 
Brazil – Aircraft Appellate Body Report, Brazil – Export Financing Programme for Aircraft , 
WT/DS46/AB/R, adopted 20 August 1999, DSR 1999:VIII, 3327 
Brazil – Desiccated Coconut Appellate Body Report, Brazil - Measures Affecting Desiccated Coconut , 
WT/DS22/AB/R, adopted 20 March 1997, DSR 1997:I, 167 
Canada – Aircraft  Appellate Body Report, Canada – Measures Affecting the Export of Civilian 
Aircraft , WT/DS70/AB/R, adopted 20 August 1999, DSR 1999:III, 1377 
Canada - Aircraft Panel Report, Canada – Measures Affecting the Export of Civilian Aircraft, 
WT/DS70/R, adopted on 20 August 1999, as upheld by the Appellate Body Report, WT/DS70/AB/R, DSR 1999:IV, 1443 
Canada – Autos Appellate Body Report, Canada – Certain Measures Affecting the Automotive 
Industry , WT/DS139/AB/R, WT/DS142/AB/R, adopted 19 June 2000, DSR 
2000:VI, 2995 
Canada – Autos Panel Report, Canada – Certain Measures Affecting the Automotive Industry,  
WT/DS139/R, WT/DS142/R, adopted 19 June 2000, as modified by the Appellate Body Report, WT/DS139/AB/R, WT/DS142/AB/R, DSR 2000:VII, 
3043 
Canada – Dairy Appellate Body Report, Canada - Measures Affecting the Importation of Milk 
and the Exportation of Dairy Products , WT/DS103/AB/R, WT/DS113/AB/R, 
adopted 27 October 1999, DSR 1999:V, 2057 
Canada – Dairy 
(Article 21.5 – New Zealand 
and US II) Appellate Body Report, Canada – Measures Affecting the Importation of Milk 
and the Exportation of Dairy Products, Second Recourse to Article 21.5 of the 
DSU by New Zealand and the United States,  WT/DS103/AB/RW2, 
WT/DS113/AB/RW2, adopted 17 January 2003 
Canada – Periodicals Panel Report, Canada – Certain Measures Concerning Periodicals , WT/DS31/R 
and Corr.1, adopted 20 July 1997, as modified by the Appellate Body Report, WT/DS31/AB/R, DSR 1997:I, 481 
Canada – Wheat Exports and Grain Imports  Panel Report, Canada – Measures Relating to Exports of Wheat and Treatment 
of Imported Grain,  WT/DS276/12, circulated 21 July 2003 
Chile – Alcoholic Beverages Panel Report, Chile – Taxes on Alcoholic Beverages , WT/DS87/R, 
WT/DS110/R, adopted 12 January 2000, DSR 2000:I, 281 
Chile – Price Band System Appellate Body Report, Chile – Price Band System and Safeguard Measures 
Relating to Certain Agricultural Products , WT/DS207/AB/R, adopted 23 October 
2002 
  WT/DS285/R 
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SHORT TITLE  FULL TITLE  
Chile – Price Band System Panel Report, Chile – Price Band System and Safeguard Measures Relating to 
Certain Agricultural Products , WT/DS207/R, 3 May 2002, adopted 
23 October 2002, as modified by the Appellate Body Report, WT/DS207AB/R 
EC – Asbestos Appellate Body Report, European Communities – Measures Affecting Asbestos 
and Asbestos-Containing Products , WT/DS135/AB/R, adopted 5 April 2001 
EC – Bananas III Appellate Body Report, European Communities – Regime for the Importation, 
Sale and Distribution of Bananas , WT/DS27/AB/R, adopted 25 September 1997, 
DSR 1997:II, 591 
EC – Bananas III (US) Panel Report, European Communities – Regime for the Importation, Sale and 
Distribution of Bananas – Complaint by the United States , WT/DS27/R/USA, 
adopted 25 September 1997, as modified by the Appellate Body Report, WT/DS27/AB/R, DSR 1997:II, 943 
EC – Computer Equipment Appellate Body Report, European Communities - Customs Classification of 
Certain Computer Equipment , WT/DS62/AB/R, WT/DS67/AB/R, 
WT/DS68/AB/R, adopted 22 June 1998, DSR 1998:V, 1851 
EC – Computer Equipment Panel Report, European Communities – Customs Classification of certain 
Computer Equipment , WT/DS62/R, WT/DS67/R, WT/DS68/R, adopted 
22 June 1998, as modified by the Appellate Body Report, WT/DS62/AB/R, 
WT/DS67/AB/R, WT/DS68/AB/R, DSR 1998:V, 1891 
EC – Hormones Appellate Body Report, EC Measures Concerning Meat and Meat Products 
(Hormones) , WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, 
DSR 1998:I, 135 
EC – Poultry Appellate Body Report, European Communities – Measures Affecting the 
Importation of Certain Poultry Products , WT/DS69/AB/R, adopted 23 July 1998, 
DSR 1998:V, 2031 
EC – Sardines Appellate Body Report, European Communities – Trade Description of Sardines , 
WT/DS231/AB/R, adopted 23 October 2002 
EEC – Import Restrictions Panel Report, EEC – Quantitative Restrictions Against Imports of Certain 
Products from Hong Kong , adopted 12 July 1983, BISD 30S/129  
EEC (Member States) – 
Bananas I Panel Report, EEC – Member States' Import Regimes for Bananas , 3 June 1993, 
unadopted, DS32/R. 
EEC – Parts and Components Panel Report, European Economic Community – Regulation on Imports of Parts 
and Components , adopted 16 May 1990, BISD 37S/132 
Guatemala – Cement I Appellate Body Report, Guatemala – Anti-Dumping Investigation Regarding 
Portland Cement from Mexico,  WT/DS60/AB/R, adopted 25 November 1998, 
DSR 1998:IX, 3767 
India – Patents (US) Appellate Body Report, India – Patent Protection for Pharmaceutical and 
Agricultural Chemical Products , WT/DS50/AB/R, adopted 16 January 1998, 
DSR 1998:I, 9 
India – Patents (US)  Panel Report, India – Patent Protection for Pharmaceutical and Agricultural 
Chemical Products – Complaint by the United States , WT/DS50/R, adopted 
16 January 1998, as modified by the Appellate Body Report, WT/DS50/AB/R, DSR 1998:I, 41 
India – Autos Panel Report, India – Measures Affecting the Automotive Sector , WT/DS146/R, 
WT/DS175/R and Corr.1, adopted 5 April 2002 
Indonesia – Autos Panel Report, Indonesia - Certain Measures Affecting The Automobile Industry , 
WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/DS64/R and Corr.1, 2, 3 and 4, adopted 23 July 1998, DSR 1998:VI, 2201 
 WT/DS285/R 
Page viii  
 
SHORT TITLE  FULL TITLE  
Japan – Agricultural 
Products II Appellate Body Report, Japan – Measures Affecting Agricultural Products , 
WT/DS76/AB/R, adopted 19 March 1999, DSR 1999:I, 315 
Japan – Alcoholic Beverages I Panel Report, Japan – Customs Duties, Taxes and Labelling Practices on 
Imported Wines and Alcoholic Beverages , adopted 10 November 1987, 
BISD 34S/83 
 
Japan – Alcoholic 
Beverages II Appellate Body Report, Japan – Taxes on Alcoholic Beverages , WT/DS8/AB/R, 
WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, 97 
Japan – Alcoholic Beverages II Panel Report, Japan – Taxes on Alcoholic Beverages , WT/DS8/R, WT/DS10/R, 
WT/DS11/R, adopted 1 November 1996, as modified by the Appellate Body Report, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, DSR 1996:I, 125 
 
Japan – Film Panel Report, Japan – Measures Affecting Consumer Photographic Film and 
Paper,  Panel Report, WT/DS44/R, adopted 22 April 1998, DSR 1998:IV, 1179 
Korea – Alcoholic 
Beverages  Appellate Body Report, Korea – Taxes on Alcoholic Beverages , WT/DS75/AB/R, 
WT/DS84/AB/R, adopted 17 February 1999, DSR 1999:1, 3 
Korea – Dairy Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of 
Certain Dairy Products , WT/DS98/AB/R, adopted 12 January 2000, 
DSR 2000:I, 3. 
Korea – Dairy  Panel Report, Korea – Definitive Safeguard Measure on Imports of Certain Dairy 
Products , WT/DS98/R and Corr.1, adopted 12 January 2000, as modified by the 
Appellate Body Report, WT/DS98/AB/R, DSR 2000:I, 49. 
Korea – Procurement Panel Report, Korea – Measures Affecting Government Procurement , 
WT/DS163/R, adopted 19 June 2000, DSR 2000:VIII, 3541 
Korea – Various Measures on Beef Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled, 
and Frozen Beef , WT/DS161/AB/R, WT/DS169/AB/R, adopted 10 January 
2001, DSR 2001:I, 5 
Korea – Various Measures 
on Beef Panel Report, Korea – Measures Affecting Imports of Fresh, Chilled and Frozen 
Beef, WT/DS161/R, WT/DS169/R, adopted 10 January 2001, as modified by 
the Appellate Body Report, WT/DS161 /AB/R, WT/DS169/AB/R, DSR 2001:I, 
59 
Thailand – H-Beams Appellate Body Report, Thailand – Anti-Dumping Duties on Angles, Shapes and 
Sections of Iron or Non-Alloy Steel and H-Beams from Poland , 
WT/DS122/AB/R, adopted 5 April 2001 
Thailand – H-Beams Panel Report, Thailand – Anti-Dumping Duties on Angles, Shapes and Sections 
of Iron or Non-Alloy Steel and H-Beams from Poland , WT/DS122/R, adopted 
on 5 April 2001, as modified by the Appellate Body Report, WT/DS122/AB/R 
Turkey – Textiles  Panel Report, Turkey – Restrictions on Imports  of Textile and Clothing Products , 
WT/DS34/R, adopted 19 November 1999, as modified by the Appellate Body Report, WT/DS34/AB/R, DSR 1999:VI, 2363 
US – Carbon Steel Appellate Body Report, United States – Countervailing Duties on Certain 
Corrosion-Resistant Carbon Steel Flat Products from Germany , 
WT/DS213/AB/R and Corr.1, adopted 19 December 2002. 
US – Carbon Steel Panel Report, United States – Countervailing Duties on Certain Corrosion-
Resistant Carbon Steel Flat Products from Germany , WT/DS213/R and Corr.1, 
adopted 19 December 2002, as modified by the Appellate Body Report, 
WT/DS213/AB/R and Corr.1 
US – Certain EC Products Appellate Body Report, United States – Import Measures on Certain Products 
from the European Communities , WT/DS165/AB/R, adopted 10 January 2001, 
DSR 2001:I, 373  WT/DS285/R 
 Page ix 
 
 
SHORT TITLE  FULL TITLE  
US – Corrosion-Resistant 
Steel Sunset Review  Appellate Body Report, United States – Sunset Review of Anti-dumping Duties 
on Corrosion-Resistant Carbon Steel Flat Products from Japan,  
WT/DS244/AB/R, adopted 9 January 2004, as modified by the Appellate Body 
Report, WTDS244/AB/R 
US – Corrosion-Resistant 
Steel Sunset Review Panel Report, United States – Sunset Review of Anti-Dumping Duties on 
Corrosion-Resistant Carbon Steel Flat Products from Japan,  WT/DS244/R, 
adopted 9 January 2004 
US – Cotton Yarn Appellate Body Report, United States – Transitional Safeguard Measure on 
Combed Cotton Yarn from Pakistan , WT/DS192/AB/R, adopted 
5 November 2001 
US – Cotton Yarn Panel Report, United States – Transitional Safeguard Measure on Combed Cotton 
Yarn from Pakistan , WT/DS192/R, adopted 5 November 2001, as modified by the 
Appellate Body Report, WT/DS192/AB/R 
US – Export Restraints Panel Report, United States – Measures Treating Export Restraints As 
Subsidies, WT/DS194/R, adopted 23 August 2001 
US – FSC Appellate Body Report, United States – Tax Treatment for "Foreign Sales 
Corporations" , WT/DS108/AB/R, adopted 20 March 2000, DSR 2000:IV, 1619 
US – FSC Panel Report, United States – Tax Treatment for "Foreign Sales Corporations" , 
WT/DS108/R, adopted 20 March 2000, as modified by the Appellate Body 
Report, WT/DS108/AB/R, DSR 2000:IV, 1677 
US – FSC  
(Article 21.5 – EC) Appellate Body Report, United States – Tax Treatment For "Foreign Sales 
Corporations" – Recourse to Article 21.5 of the DSU by the European 
Communities , WT/DS108/AB/RW, adopted 29 January 2002 
US – FSC  
(Article 21.5 – EC) Panel Report, United States – Tax Treatment For "Foreign Sales Corporations" 
– Recourse to Article 21.5 of the DSU by the European Communities , 
WT/DS108/RW, adopted 29 January 2002, as modified by the Appellate Body Report, WT/DS108/AB/RW  
US – FSC  
(Article 22.6 – US) Decision by the Arbitrator, United States – Tax Treatment for "Foreign Sales 
Corporations" – Recourse to Arbitrati on by the United States under Article 22.6 
of the DSU and Article 4.11 of the SCM Agreement , WT/DS108/ARB, 
30 August 2002 
US – Gasoline  Appellate Body Report, United States – Standards for Reformulated and 
Conventional Gasoline , WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I, 3 
US – Gasoline  Panel Report, United States – Standards for Reformulated and Conventional 
Gasoline , WT/DS2/R, adopted 20 May 1996, as modified by the Appellate Body 
Report, WT/DS2/AB/R, DSR 1996:I, 29 
US – Hot–Rolled Steel Appellate Body Report, United States – Anti-Dumping Measures on Certain 
Hot-Rolled Steel Products from Japan , WT/DS184/AB/R, adopted 
23 August 2001 
US – Hot-Rolled Steel  Panel Report, United States – Anti-Dumping Measures on Certain Hot-Rolled 
Steel Products from Japan , WT/DS184/R, adopted 23 August 2001 as modified 
by the Appellate Body Report, WT/DS184/AB/R 
US – Line Pipe Appellate Body Report, United States – Definitive Safeguard Measures on 
Imports of Circular Welded Car bon Quality Line Pipe from Korea , 
WT/DS202/AB/R, adopted 8 March 2002 
US – Line Pipe  Panel Report, United States – Definitive Safeguard Measures on Imports of 
Circular Welded Carbon Quality Line Pipe from Korea , WT/DS202/R, adopted 
8 March 2002, as modified by the Appellate Body Report, WT/DS202/AB/R 
US – Offset Act (Byrd Amendment) Appellate Body Report, United States – Continued Dumping and Subsidy Offset 
Act of 2000 , WT/DS217/AB/R, WT/DS234/AB/R, adopted 27 January 2003 WT/DS285/R 
Page x  
 
SHORT TITLE  FULL TITLE  
US – Section 110(5) 
Copyright Act Panel Report,  United States – Section 110(5) of the US Copyright Act , 
WT/DS160/R, adopted 27 July 2000, DSR 2000:VIII, 3769 
US – Section 129(c)(1) URAA
  Panel Report, United States – Section 129(c)(1) of the Uruguay Round 
Agreements Act , WT/DS221/R, adopted 30 August 2002 
US – Section 211 
Appropriations Act Appellate Body Report, United States – Section 211 Omnibus Appropriations 
Act of 1998 , WT/DS176/AB/R, adopted 1 February 2002 
US – Section 301 Trade Act Panel Report, United States – Sections 301-310 of the Trade Act of 1974,  
WT/DS152/R, adopted 27 January 2000, DSR 2000:II, 815 
US – Section 337 Panel Report, United States Section 337 of the Tariff Act of 1930,  adopted 
7 November 1989, BISD 36S/345 
US – Shrimp Appellate Body Report, United States – Import Prohibition of Certain Shrimp and 
Shrimp Products , WT/DS58/AB/R, adopted 6 November 1998, DSR 1998:VII, 
2755 
US – Shrimp  
(Article 21.5 – Malaysia) Appellate Body Report, United States – Import Prohibition of Certain Shrimp and 
Shrimp Products – Recourse to Article 21.5 of the DSU by Malaysia , 
WT/DS58/AB/RW, adopted 21 November 2001 
US – Steel Plate Panel Report, United States – Anti-Dumping and Countervailing Measures on 
Steel Plate From India, WT/DS206/R, adopted 29 July 2002 
US – Sugar Waiver Panel Report, United States – Restrictions on the Importation of Sugar and 
Sugar-Containing Products Applied under the 1955 Waiver and under the 
Headnote to the Schedule of Tariff Concessions , adopted 7 November 1990, 
BISD 37S/228 
US – Tuna (Mexico) Panel Report, United States – Restrictions on Imports of Tuna , 3 September 1991, 
unadopted, BISD 39S/155 
US – Underwear Panel Report, United States – Restrictions on Imports of Cotton and Man-made 
Fibre Underwear , WT/DS24/R, adopted 25 February 1997, as modified by the 
Appellate Body Report, WT/DS24/AB/R, DSR 1997:I, 31 
US – Wool Shirts and 
Blouses Appellate Body Report, United States – Measure Affecting Imports of Woven 
Wool Shirts and Blouses from India , WT/DS33/AB/R and Corr.1, adopted 
23 May 1997, DSR 1997:I, 323 
 
  WT/DS285/R 
 Page xi 
 
 
LIST OF ABBREVIATIONS 
 
 AB Appellate Body 
 
CPC or CPC Prov. United Nations, Sta tistical Papers, Series M, No. 77, Provisional 
Central Product Classification , 1991 
 
CPC 1.1 United Nations, Central Product Classification Version 1.1,  
ST/ESA/STAT/SER.M/77/Ver.1.1, E.03.XVII.3, 2002 
 
DEA United States Drug Enforcement Administration 
 
DSB Dispute Settlement Body 
 
DSU Dispute Settlement Understanding 
 
FATF Financial Action Task Force on Money Laundering 
 
FBI United States Federal Bureau of Investigation 
 
GAO United States General Accounting Office 
 
GATS General Agreement on Trade in Services 
 
GATT 1994 General Agreement on Tariffs and Trade 1994 
 
NGISC United States National Gambling Impact Study Commission 
 
NAICS North American Industry Classification System 
 
RICO Racketeer Influenced and Corrupt Organizations Statute, codified at 
18 U.S.C. §§ 1961-1968 
 
SAA Statement of Administrative Action 
 
USITC United States International Trade Commission 
 
USITC Document United States International Trade Commission,  US Schedule of 
Commitments under the General Agreement on Trade in Services – 
With explanatory materials prepared by the US International Trade Commission 
 
USTR United States Trade Representative 
 
WTO Agreement  Marrakesh Agreement Es tablishing the World Trade Organization 
 
W/120 Services Sectoral Classification List:  Note by the Secretariat, 
MTN.GNS/W/120, 10 July 1991 
 
   WT/DS285/R 
 Page 1 
 
 
I. INTRODUCTION 
1.1 In a communication dated 13 March 2003, Antigua  and Barbuda (hereinafter also "Antigua") 
requested consultations with the United States, pur suant to Article 4 of the Understanding on Rules 
and Procedures Governing the Settlement  of Disputes (DSU) and Article XXIII  of the General 
Agreement on Trade in Services (GATS) regarding measures applied by central, regional and local 
authorities in the United States of America that affected the cross-border supply of gambling and 
betting services.1  Antigua attached to its communicati on an Annex listing US  Federal and State 
measures whose cumulative impact resulted, accord ing to Antigua, in making unlawful the supply of 
gambling and betting services on a cross-border basi s.  In a communication dated 1 April 2003, 
Antigua issued a communication containing a corrected Annex aiming at clarifying "some of the 
references to the US legislation" which were contained in the original Annex.2 
1.2 Antigua and the United States held consultations  on 30 April 2003, but these consultations did 
not resolve the dispute.  Consequently, in a co mmunication dated 12 June 2003, Antigua requested the 
DSB to establish a Panel.3  At its meeting on 21 July 2003, the DSB established a Panel pursuant to 
the request of Antigua in document WT/DS285/2, in accordance with Article 6 of the Dispute 
Settlement Understanding.  At that meeting, the pa rties to the dispute agr eed that the Panel should 
have standard terms of reference.  The term s of reference are, therefore, the following: 
"To examine, in the light of the relevant provisions of the covered agreements cited 
by Antigua and Barbuda in document WT/D S285/2, the matter referred to the DSB 
by Antigua and Barbuda in that document, and to make such findings as will assist 
the DSB in making the recommendations or in giving the rulings provided for in 
those agreements." 
1.3 On 15 August 2003, Antigua requested the Direct or-General to determine the composition of 
the Panel, pursuant to paragraph 7 of Article  8 of the DSU.  This paragraph provides: 
"If there is no agreement on the panelists within 20 days after the date of the 
establishment of a panel, at the request of  either party, the Director-General, in 
consultation with the Chairman of the DSB and the Chairman of the relevant Council 
or Committee, shall determine the com position of the panel by appointing the 
panelists whom the Director-General consid ers most appropriate in accordance with 
any relevant special or additional rules or  procedures of the covered agreement or 
covered agreements which are at issue in th e dispute, after consulting with the parties 
to the dispute.  The Chairman of th e DSB shall inform the Members of the 
composition of the panel thus formed no later than 10 days after the date the 
Chairman receives such a request." 
1.4 On 25 August 2003, the Director-General accordingly composed the Panel as follows: 
Chairman: Mr. B.K. Zutshi 
 
 Members: Mr. Virachai Plasai 
   Mr. Richard Plender  1.5 Canada, the European Communities, Japan, Mexi co and Chinese Taipei reserved their rights 
to participate in the Panel proceedings as a third party. 
                                                      
1 WT/DS285/1 – S/L/110, dated 27 March 2003. 
2 WT/DS285/1/Add.1 – S/L/110/Add.1, dated 10 April 2003. 
3 WT/DS285/2, 13 June 2003. WT/DS285/R 
Page 2  
 
1.6 On 5 September 2003, the Panel adopted  its Working Procedures (Annex A). 
1.7 On 17 October 2003, the United States made a request for preliminary rulings, pursuant to 
paragraph 11 of the Working Procedures.  On 20 October 2003, the Panel invited Antigua and 
Barbuda and the third parties to comment on th e US request (Annex B).  Antigua submitted its 
response on 23 October 2003, the European Comm unities and Japan on 24 October 2003.  Chinese 
Taipei, Mexico and Canada informed the Panel th at they would not submit any comments to the US 
request for preliminary rulings (Annex B).  On 29 October 2003, the Panel replied to the US request 
in a communication to the parties, with copy to the third parties on 29 October 2003 (Annex B). 
1.8 The Panel held the first substantive meeting w ith the parties from 10 to 12 December 2003.  
The session with the third parties took place on 11 December 2003.  The second substantive meeting 
was held on 26 and 27 January 2004.   
1.9 On 20 February 2004, the Panel issued the De scriptive Part of its Panel Report.  On 
27 February 2004, the parties and third parties provi ded their comments on the draft Descriptive Part. 
1.10 Factual and legal arguments by the parties are re flected in Section III.  In addition, Antigua 
and the United States have submitted a series of exhibits in support of their factual and legal 
allegations.  These exhibits have been considered by the Panel in its findings in Section VI below.  A 
list of these exhibits is contained in Annex G of th is Report.  Annex C to the Report contains written 
questions posed by the Panel to the parties durin g the first and second panel meetings, as well as 
questions posed to third parties during the first panel meeting. 
1.11 On 24 March 2004, the Panel transmitted its Interi m Report to the parties.  On 7 April 2003, 
the parties provided their comments on the Interim Re port.  None of the parties requested that the 
Panel hold a further meeting with the parties to re view part(s) of the Panel's Report.  On 16 April 
2003, the parties submitted further written comments on the comments that had already been provided 
on the Panel's Interim Report on 7 April 2003. 
1.12 The Final Report of the Panel was issued to the parties on 30 April 2004. 
II. CONCLUSIONS REQUESTED BY THE PARTIES 
2.1 Antigua and Barbuda  requests the Panel to find that th e United States' prohibition on the 
cross-border supply of gambling and betting services and its measures restrict ing international money 
transfers and payments relating to gambli ng and betting services are inconsistent with: 
(a) the United States' Schedule of specific commitments under the GATS;  and  
(b) Articles XVI:1, XVI:2, XVII:1, XVII:2, XVII:3, VI:1, VI:3 and XI:1 of the GATS. 
2.2 The United States  requests the Panel to reject Antigua and Barbuda's claims in their entirety. 
III. ARGUMENTS OF THE PARTIES 
A. F
ACTUAL ARGUMENTS  
3.1 Antigua  submits that a vast array of gambling and betting games and services are offered on 
a commercial basis in the United States and elsewhere.   These games can typically be categorized into 
one of the following three broad categories:  (i ) betting on the outcome of events in which the 
gamblers do not participate, such as sports contests (for example, horse races, soccer, American 
football, basketball, and cricket);  (ii) card ga mes involving monetary stakes (such as poker, black  WT/DS285/R 
 Page 3 
 
 
jack and baccarat);4 and (iii) random selection games which are games of chance based on the random 
selection of numbers or other signs and where the random selection is performed  by a machine or the 
casting of dice.  This type of gambling takes various  forms, including lotto, keno and bingo;  instant 
lotteries or "scratch card games";  gambling machines;  and "table games" such as roulette or "craps".  Antigua notes that "gambling," "gaming," "wagering"  and "betting" are different terms for the same 
basic activity.  While these terms are generally used  interchangeably by the industry and by Antigua 
in its arguments to the Panel, the industry typically refers to itself as the "gaming industry" and terms 
such as "gambling and betting" more often refer to the activity. 
3.2 The Antiguan government has taken steps since the mid 1990s to build up a primarily 
Internet-based, "remote-ac cess" gaming industry as part of its economic development strategy.  As the 
cross-border gaming industry in Antigua has devel oped and matured, the government believes that a 
standard business model has evolved that succes sful operators more or less conform to.
5  Antiguan 
regulation provides for two kinds  of gambling and betting licen ces  – interactive gaming and 
interactive wagering.  The gaming licence is for c asino-type, random selection and card games and the 
wagering licence is for sports betting.  Some operators possess both licences and players can access 
either type of service from one Internet site6, while other operators offer only one service.7  Casino 
game operators create "virtual casinos" on their we b sites with detailed graphics and enhancements 
designed to mimic land-based casino settings.  These sites offer a variety of card and dice games such 
as poker, black jack, craps and keno, as well as arcade -type games that provide virtual imitations of 
video poker terminals, slot machines and other ga mbling machines.  Because of the highly visual 
aspect of the casino-type games, these services are ope rated exclusively through Internet connection.  
The sports betting operators offer the chance to wager on the outcome of sporting contests in a 
number of different ways, such as straight wagers on  match results, transacting in futures markets in 
player performances, team performances and outco mes of political campaigns and other uncertain 
future events, and other forms of traditional as well as inventive methods of wagering.  All Antiguan 
sports book operators maintain an Internet web site on which players may place wagers, but many 
operators also make extensive use of telephone betting, as betting on contests or performances to 
occur in the future does not need to be visual and the events are independent of the operator's web 
site.   
3.3 With respect to player accounts and player due diligence, the gambling and betting service 
providers in Antigua offer what is called "account betting" where a player must fund an account with 
money before being able to enter into wagers.  The amount of a wager cannot exceed the funds on 
deposit in the account and players are not offered credit on which to gamble.8  If a wager is lost, the 
amount of the bet is taken from the player's account for the benefit of the operator.  If the player wins, 
the winnings are credited to the account.  To realize on their winnings players may request that all or any portion of the funds in their account are dire cted back to them.  In practice as well as by 
requirement of Antiguan law, winnings and the ba lance of deposits are transmitted back to the 
account from which the initial deposit came or, if th e deposit was by credit card, sometimes by credit 
back to the same credit card.  In  some cases, amounts are paid to players by cheque.  To open an 
account with an operator, prospective players typically  fill in a form and submit information directly 
on-line.  The precise information requested at the time of establishing a new account differs from site 
to site, but the basic objective is to obtain enough information regarding the new player to allow the 
                                                      
4 Antigua notes that, in the context of a casino these w ill often be referred to as part of a wider group of 
"table games" also including random select ion games such as roulette or craps. 
5 Antigua indicates that the discussion in paras. 3.2 and 3.4 is based upon the experience and the 
records of the Antiguan Directorate of Offshore Gaming.   
6 See, e.g., www.intertops.com; www.wsex.com. 
7 See, e.g.,  www.gamebookers.com; www.bingomania.net.  
8 Antigua notes that this is unlike many land-based casinos in the United States, which will offer some 
customers the ability to gamble on credit with funds adva nced by the casino.  Advancing of credit for gaming 
transactions is against Antiguan law. WT/DS285/R 
Page 4  
 
operator to perform its own due diligence into the id entity of a player.  While almost every operator 
will let a person open an account without the opera tor having gone through the due diligence process, 
funding an account and commencing gambling or bet ting on the account cannot be done without the 
completion of the process.  There are several common  methods used by players to fund accounts with 
Antiguan gaming operators.  These include payment by cheque drawn on a bank account or a bank 
certified or cashier's cheque, wire transfer, electronic transfer to money remittance service providers 
and credit card.  The methods used by operators to  perform due diligence on players differ from site to 
site, but all operators undertake some form of iden tity verification to come to a reasonable assurance 
of the identity of the player.  In addition to sa tisfying Antigua's regulatory requirements for identity 
verification, anti-fraud prevention motivates operators to  ensure identification.  A number of operators 
use commercially available databases where large amounts of information on persons can be found, 
including dates of birth and employment, criminal records, credit history and residential addresses.  
Operators can also easily determine the location of a player through the tracing of the Internet service 
provider number generated by the person's computer. 
3.4 Concerning fraud prevention, each Antiguan oper ator maintains an "anti-fraud" department 
with the objective of preventing abuses of the ga ming systems, collusion among players, financial 
fraud and credit card abuse, under age playing and other occurrences which can result in financial 
losses to the operator.  In general, anti-fraud depa rtments perform the identity checks on prospective 
players, investigate suspicious conduct and devel op strategies to deal with illegal or dishonest 
practices.  It is obvious to the government through its  oversight of the industry that with experience, 
operators have become extremely capable of discer ning potentially fraudulent or dishonest players or 
conduct in a number of ways and mostly by recogni sable patterns that have built up over the years.  
Under age gambling is expressly prohibited by Antig uan law.  Experience has shown that under age 
gambling with Antiguan operators is relatively rare for several reasons.  The first obstacle to gambling and betting by minors is the age verification that fo rms a part of the identification process.  A second 
material obstacle is the need to fund an account before any wagering can commence, which requires 
access to financial instruments su ch as cheques and a funded bank account, the ability to send funds 
by wire transfer from a funded bank account or acce ss to a valid credit card.  This is a significant 
barrier which most minors are unable to overcome, pa rticularly given the practice in the industry to 
either send winnings and deposits directly back to  the account from which deposits were received or 
crediting winnings directly back to the appli cable credit card – in essence denying the minor the 
ability to access any gaming rewards.  Another obstacle to play by minors is market driven – in the 
rare cases where minors have been able to gamble th e result has almost invariably been a refund to the 
parent or a credit back on a credit card.  Another method of restricting the ability of minors to wager 
on operator web sites can be imposed at the user's end.  In practice, many Antiguan operators provide direct links from their web sites to parental contro l providers such as "Cybersitter," "Net Nanny" and 
"Surf Watch."  Some specifically register themselv es with these parental control providers to ensure 
that access to their sites will be automatically blocked to subscribers.  Finally, it is a requirement of 
Antiguan law that operators display on their sites a warning of the addiction possibilities of gambling 
and information to assist compulsive gamblers.  In practice, this is usually done by a reference and link to organizations such as "Gamblers Anonymous ."  Furthermore, the government has found that 
the cross-border gaming industry in Antigua is gene rally adverse to gambling and betting by problem 
gamblers.  Not only do these people tend to be mo re problematic for operators – demanding credit and 
refunds and occupying a disproportionate amount of  personnel attention – but their conduct also 
frequently results in charge-backs on credit cards and reversals of financ ial transactions.  Most 
operators appear to be able to detect patterns of problem gamblers either at the sign-up stage (where 
the operators refuse to authorize funding of or pl aying on an account) or later on during the course of 
the relationship with the player, in which event the person's account will often be closed and the 
balance returned to the player. 
3.5 Antigua submits that, from a high of up to  119 licensed operators, employing around 3,000 
and accounting for around ten per cent of GDP in 1999,  by 2003 the number of operators has declined 
to 28, employing fewer than 500.  The government belie ves that material factor s in the decline of the  WT/DS285/R 
 Page 5 
 
 
industry are the increased standards of regulation in  Antigua and an increasingly aggressive strategy 
on the part of the United States to impede the oper ation of cross-border gaming activities in Antigua.  
Antigua's regulatory framework fo r the remote-access gaming industry  has two components. The first 
is the Gaming Regulations9, adopted on 22 May 2001, which set out, inter alia , requirements for 
operators to have valid licences, the applications for which are subject to rigorous scrutiny by the 
Gaming Directorate. The Gaming Regulations also : (i) forbid under age gaming; (ii) contain 
provisions aimed at promoting responsible gami ng (including rules requiring warnings of the 
addictive effects of gambling on operator's website s); (iii) oblige operators to conduct full identity 
verification checks on prospective players; (iv) prohibit the receiving of payments in cash; and 
(v) provide that funds can only come from prope rly verified accounts in regulated financial 
institutions and that, if possible, winnings must be  paid back to that sa me account.  Licensees are 
obliged to report all suspicious activities to the Di rectorate. The Directorate itself has investigatory 
powers under the Gaming Regulations, and oversees,  supervises and monitors licensees, key 
personnel and games offered by licensees.  In prac tice, these powers are regularly used. The Gaming 
Regulations also address standards in advertising, requiring, among other things, that advertising not 
be false, deceptive or misleading and not contai n indecent, pornographic or offensive content. 
3.6 The second component of the regulatory scheme in Antigua is the anti-money laundering 
efforts of the government, evidenced principa lly by the Money Laundering (Prevention) Act10, the 
Money Laundering Regulations11, the Money Laundering Guidelines12 and the actions of the Office of 
National Drug and Money Laundering C ontrol Policy ("ONDCP"). Antigua is a member state of the 
Caribbean Financial Action Task Force created under the auspices of the Financial Action Task Force 
on Money Laundering established by the G-7 in 1989. The Money Laundering Act is a 
comprehensive, up-to-date statute that crimina lizes money laundering and sets up the regulatory 
authority and powers of the ONDCP.  For a variety of reasons, Antigua does not consider the cross-
border gambling and betting industry in Antigua as particularly suscep tible to money laundering or 
other forms of financial or organized crime.  In particular, operators in Antigua are prohibited from 
taking cash from players and are required to establish th eir identity. This is in stark contrast to land-
based casinos and other gaming outlets in the Unite d States, where not only can players wager with 
complete anonymity but also gamble almost exclusively with cash.   
3.7 Antigua submits that commercial gambling is an  enormous industry in the United States. In 
1999 gamblers in the United States wagered more than US $630 billion in state-sanctioned gambling 
activities and lost US $50 billion in the process.13  In 1998, 68 per cent of Americans gambled at least 
once and 86 per cent of Americans have gambled at least once in their lifetime.14  In 1999, a federal 
commission, the United States National Gambling Impact Study Commission (hereinafter, "NGISC"), completed a lengthy detailed study on gambling in  the United States.  The NGISC concluded that: 
"Commercial gambling has become an i mmense industry.  Governments are now 
heavily involved and increasingly active in  pursuit of gambling revenues, either 
                                                      
9 Statutory Instruments Antigua and Barbuda, 2001 No 16, "The Interactive Gaming and Interactive 
Wagering Regulations of 2001". 
10 Acts of Antigua and Barbuda, No 9 of 1996. 
11 Statutory Instruments Antigua and Barbuda, 1999 No 35. 
12 The Money Laundering Guidelines for Financial Institutions  issued by the ONDCP under Section 10 
of the Money Laundering (Prevention) Act 1996, 9 September 2002. 
13 National Gambling Impact Study Commission Final Report  (Hereinafter "NGISC Final Report"), 
18 June 1999, p. 7-1, and Ge orge Will, "Gambler Nation," The Washington Post , 27 June 1999. 
14 Ibid., p. 1-1, citing National Opinion Research Center Gambling Impact and Behavior Study, Report 
to the National Gambling Impact Study Commission , 1 April 1999, p. 6. WT/DS285/R 
Page 6  
 
directly through state-owned lotteries and Native American tribal gambling or through the regulation and taxa tion of commercial operators.
15 
There was no single, overarching national d ecision to turn the United States into a 
world leader in gambling.  Rather, games of chance spread across the map as a result 
of a series of limited, incremental decisions made by individuals, communities, states 
and businesses.16 
In the next 25 years, gambling could, at its present rate of growth, become more and 
more like other common and legal, but some what restricted, business activities, such 
as the sale of alcohol or cigarettes. Of course, over time, the basic rules of our 
economic system would be expected to play a greater role in shaping the pattern of 
gambling, as the quasi-monopolistic circumst ances of the present are replaced by 
more routine competition."17 
3.8 Since 1999 state-sanctioned gambling in the United States has continued its expansion at an 
unprecedented rate, being available in 48 states and covering activities includ ing bingo, horse race 
betting and other sports gambling, commercial casi nos and state-operated lotteries.  The omnipresence 
of fully lawful, state-sanctioned gambling make s the United States the largest national gambling 
market in the world.  The US $630 billion in to tal amount wagered reported by the NGISC in 1998 
and 1999 excludes the most widespread and popular form of gambling in the United States: non-
sanctioned or "illegal" sports betting.  The NGI SC estimated that as much as US $380 billion in 
illegal wagers are placed annually by American  gamblers on professional and amateur sporting 
events.18 Despite the enormous growth of this non-sanc tioned gambling, the United States' efforts to 
crack down on illegal bookmakers in the United States have dwindled over the last 40 years. In the 
NGISC Final Report, the NGISC conc luded that illegal sports  betting in the United States is "easy to 
participate in, widely accepted, very popular, and, at present, not likely to be prosecuted."19 
3.9 Antigua further submits that many of the la rgest gaming companies in the world are of 
United States origin and many have overseas inte rests. These companies us e sophisticated remote 
computer technology to control and monitor overseas operations via the Internet.20  United States 
gambling operators are allowed to advertise without  restrictions throughout the United States. The 
NGISC described the advertising of lotteries in the United States as "deceptive", "misleading" and "manipulative."
21  United States casinos, such as in Nevada and Atlantic City (New Jersey), use 
sophisticated marketing techniques, including direct  marketing based on electronically collected data 
on the gambling behaviour of individual players.  For instance, Nevada's modern casinos, especially 
those on the main casino area in Las Vegas – the so-called "Las Vegas Strip" – are self-contained 
mini-cities designed to offer non-stop gambling.  For instance, the casino floor in the MGM Grand casino is over 170,000 square feet (approximately 16,000 square metres) a nd holds approximately 
3,200 slot machines, 164 table ga mes and a sports betting facility.
22  In order to attract customers, 
Nevada casinos widely advertise discount travel fa res, inexpensive hotel rooms, bargain meals, low-
                                                      
15 National Gambling Impact Study Commission Final Report – Executive Summary  (hereinafter, 
"NGISC Executive Summary"), 18 June 1999, p. 1. 
16 Ibid., p. 1. 
17 Ibid. , pp.1-2. 
18 NGISC Final Report, p. 2-14. 
19 NGISC Final Report, p. 2-14.   
20 Rod Smith, "Casino Industry Technology: Open Wide , New Progressive Slot System Lets Las Vegas 
Company Serve Russian Gamblers," Las Vegas Review Journal  (2 September 2003). 
21 NGISC Final Report, pp. 3-15, 3-16. 
22 Jason N. Ader, Bears Stearns 2002-03  North American Gaming Almanac , Huntington Press, 
Las Vegas, Nevada, p. 36.  WT/DS285/R 
 Page 7 
 
 
cost entertainment and other special events.23  Some casinos even offer free travel to preferred 
customers.  Under United States law, casinos are pe rmitted to advertise gambling in every state of the 
nation, even within states which do not permit casino gaming.24  One particularly successful 
marketing tool of the Las Vegas casinos is to offer entertainment in the form of shows by major stars, 
Broadway-style musicals, revue spec taculars and a variety of lounge acts.  All of this entertainment 
has a single purpose – to bring customers into the c asino.  Entertainment events that boost a casino's 
gambling winnings are frequently held over, wh ereas those which do not, regardless of how many 
tickets are sold, are generally discontinued.25  The Las Vegas-style casinos are made to keep visitors 
in the resort complex and near the tables and slot machines.26  Pathways through a casino are built to 
emphasize the gambling equipment rather than directing visitors to exits.27  Gaming equipment is 
carefully arranged in a compact layout to provide secluded, intimate gambling areas, with the 
gambling equipment the dominant décor on the casino floor.28  The gambling areas of casinos are also 
designed to detach visitors from their daily rout ine and release their inhibitions and conventional 
responsibilities.29  The unusual noise and visual effects of the casino floor purposefully create a 
sensation which heightens the thrill and pleasant tension of gambling.30   
3.10 Additionally, most casinos are open 24-hours a day and use a number of techniques to 
diminish a player's sense of time and money.31  There are generally no clocks or views to the outside, 
making it difficult for gamblers to know the time.32  The casinos convert cash into readily-expendable 
chips at gaming tables, which has the effect of detaching gamblers from their customary value of money.
33  To further encourage unchecked gambling, casi nos offer free alcoholic beverages to anyone 
who is gambling.34  For ready access to cash, casinos house ba nks, automated teller machines, credit 
card cash machines and offer lines of credit on the casino floor.35  Gambling operators also use a 
variety of inducements to keep gamblers in the casino.  Winning gamblers are commonly awarded free dinners, over-night stays and entertainment.  The motive is quite simple–given a long enough 
stay, winning gamblers will inevitably return to the tables where the law of probability will ultimately 
catch up with them.  Casinos also maintain elect ronic databases with data on the gambling behaviour 
of their individual customers.
36  These data are used for direct marketing to the individual gamblers.37  
                                                      
23 John M. Findlay, People of Chance: Gambling in American Society from Jamestown to Las Vegas , 
Oxford University Press (1986) (hereinafter " People of Chance "), p. 157. 
24 See the decision of the Unite d States Supreme Court in Greater New Orleans Broadcasting Assoc., 
Inc. v. United States , 527 U.S. 173, 190 (1999) (stating that the United States government's efforts to enforce an 
antiquated ban on broadcasting advertising of casino gambling was so pierced by governmental exemptions and 
inconsistencies that the United States government "could not hope to exonerate" the reasons for the ban and 
further holding that a Louisiana-based casino could lawfully broadcast advertising in neighbouring Texas, where casino gambling was illegal).  
25 David G. Schwartz, Suburban Xanadu:  The Casino Resort on the Las Vegas Stripe and Beyond , 
Routledge (2003), p. 95. 
26 People of Chance , op. cit. footnote 23, p. 158. 
27 Bill Friedman, Designing Casinos to Dominate the Competition: The Friedman International 
Standards of Casino Design , University of Nevada Reno (2000), pp. 15-18. 
28 Ibid. 
29 People of Chance , op. cit. in footnote 23, p. 147. 
30 Ibid ., pp. 133-34, citing Robert D. Herman, Gamblers and Gaming: Motives, Institutions and 
Controls , Lexington, Massachusetts (1976), pp. 84 - 88. 
31 Ibid.,  p. 148. 
32 Ibid.,  p. 147. 
33 Ibid. 
34 Ibid., p. 157.  See also Am erican Gaming Association, "Fact  Sheet: Casino Alcohol Policies" 
(www.americangaming.org/casino_entertainment/aga_facts/facts.cfm/id/31). 
35 American Gaming Association, "Fact Sheet: ATMS/Credit in Casinos" 
(www.americangaming.org/casino_entertainment/aga_facts/facts.cfm/id/5). 
36 David G. Schwartz, Suburban Xanadu:  The Casino Resort on the Las Vegas Stripe and Beyond , 
Routledge (2003), p. 7.  An example is the "customer loyalty schemes" of the major casino companies.  For 
instance, Harrah's has developed a sophisticated direct ma rketing system based on a "national patron database."  WT/DS285/R 
Page 8  
 
Casinos also exchange these data between each other.
38  As of 2003, Nevada has over 2,100 licensed 
casinos that offer virtually every popular form of state-sanctioned gambling.  These casinos host an 
aggregate of 189,193 slot machines and 6,358 tables for blackjack, craps, roulette and other table games
39 and generate state-wide gaming re venues of US $9.5 billion per year.40  Las Vegas itself has 
hosted over 30 million visitors each year since 1997, w ith more than 35 million visitors in each of the 
past three years.41  Approximately 90 per cent of visitors come from places other than Nevada, 
including all other regions of the United States as well as from foreign countries.42  In addition to the 
well-recognised casino operations in Nevada and New Jersey, a number of other states offer casino 
gambling opportunities as well, including Louisiana, Illinois, Indiana, Missouri, Mississippi, South Dakota, Colorado and Michigan.  Further, thr oughout the United States there are over 340 casino 
facilities owned by various Native American tribes w ho, through exemptions un der federal law and in 
many cases with federal assistance, are permitted to offer a wide scope of gambling opportunities at facilities located on tribal lands.  Even the Un ited States federal government operates gaming 
facilities, with about 8,000 slot machines and video poker electronic gaming devices located on 94 United States military bases and installati ons located outside the United States. 
3.11 Antigua submits that the United States horse ra ce betting industry has successfully used 
advances in communications technolog y to expand gambling opportunities.  As a result, 85 per cent of 
bets on horse races are made away from the track where the race is run by means of "simulcasting," or the live broadcasting of horse races via satellite communication or other remote means.
43  T h i s  
includes broadcasting to the television in the home with an opportunity to gamble from home via the 
                                                                                                                                                                     
See www.harrahs.com/e-totalrewards/o verview.html. Harrah's customers can earn "reward credits" by gambling 
in one of Harrah's casinos.  To earn these credits a gambler must use a magnetic card that identifies him and 
allows Harrah's to collect data on where, when and how much the specific customers gamble.  This information 
is then used to develop targeted direct marketing initiatives.  Customers can earn "reward credits" in all of 
Harrah's 24 casinos which are located in several markets in the United Stat es.  Rewards include, inter alia , 
"airfare to other Harrah's casinos like Las Vegas or New Orleans."  Members of the customer loyalty program 
can consult their account on Harrah's website.  The latte r also contains a "Play for Fun" section where players 
can "learn to play a new game or check out one of [their] favourites."  Playing these free games is only possible 
when you log in as a member of the customer loyalty program, thus revealing your identity.  In an interview 
published in Casino Journal  of January 2003 Mr. Phil Satre, then Chief Executive Officer of Harrah's, explained 
how such customer tracking programs have been a key element of Harrah's marketing strategy since at least 
1978.  Even then "reward credits" earned by gambling n eeded to be exchanged at gambling facilities so that 
"obviously that makes a visit to the property." 
37 Mr Gary Loveman, Harrah's President and Chief Oper ating Officer stated that "[O]ur website is just 
one example of how we're revolutionizing the way the casino industry utilizes technology".  (…) It enables us to 
communicate directly with our customer s and potential customers outside of the casino environment, expanding 
our marketing reach through effective, efficient appli cation of information technology." See "Casino player 
awards record 251 Honors to Harrah's" (5 July 2001) at www.gamblingmagazine.com. 
38 For instance the Las Vegas based Mandalay has recen tly concluded an agreement to share customer 
data with the Mohegan Sun casino in Connecticut (an "Indian casino" and the second largest casino in the 
world).  Mandalay will send direct ma rketing pitches to customers of the Mohegan Sun living within 350 miles 
from the Mohegan Sun (which includes cities such as New York, Philadelphia and Boston).  The Mohegan Sun 
will do likewise with Mandalay customers.  Casinos that en ter into such agreements will, for instance, offer high 
spending gamblers a free weekend trip to the more remote casino.  See "Mandalay Bay, Conn. casino in deal for 
marketing," Las Vegas Sun  (29 August 2003). 
39 Jason N. Ader, Bears Stearns 2002-03  North American Gaming Almanac , Huntington Press, 
Las Vegas, Nevada, pp. 27-28 (2001 figures). 
40 Ibid. (2001 figures). 
41 Las Vegas Convention & Visitors Authority, Historical Las Vegas Visitor Statistics: 1970 to 2002  
(www.lvcva.com/pdf/historica l_visitor_statistics.pdf). 
42 Ibid., see also Las Vegas Convention & Visitors Authority, Frequently Asked Research Questions 
(www.lvcva.com/press/faq.html). 
43 See the chart "US Horseracing Statistics", from the Jockey Club, 2003 Factbook Statistical Data.    WT/DS285/R 
 Page 9 
 
 
Internet, the telephone or other means of communi cation. In 2000, the United States amended the 
Interstate Horseracing Act44 to permit betting on horse races over the Internet.45   
3.12 Antigua also notes that, as of 2002, Nevada had 160 licensed and regulated "bookmakers" 
which hosted wagering on all prof essional and amateur sports.  When betting with a bookmaker a 
gambler bets against the bookmaker as opposed to betting against the other gamblers, as is the case 
with pari-mutuel betting.  The most popular sports  on which bets are made with Nevada bookmakers 
are American football, basketball and baseball.46  Wagers are also accepted on hockey, golf, auto 
racing, soccer and other sports and athletic events.47  In fiscal year 1998, sports betting in Nevada 
reached a high of US $2.3 billion (total amount wagered), generating US $77.4 million in revenues 
(profits).48  Primarily due to competition from foreign sports gambling operators, the total amount 
wagered with Las Vegas bookmakers has slightly decreased since 1998.49  In 2002, the total amount 
wagered was US $1.9 billion and industry profits were US $110 million.50  Nevada bookmakers offer 
their services to home users via the Internet and the telephone.51   
3.13 Antigua further submits that the lotteries offer a wide range of games including:  (i) instant or 
scratch-card games, which are offered in all states with lotteries in a huge variety.52  For example, the 
California Lottery currently has 39 separate scratch-card lottery games53 while the Georgia Lottery 
offers 80 such games;54  (ii) Lotto is also offered in almost  every state with a lottery and typically 
involves a very high money prize or "jackpot".  The current record prize in the United States for one winning lotto entry is US $ 296 million;
55  (iii) keno, which exists in two different types.56  The first 
type is a regular periodic drawing one or two times per week.  The ot her type of keno lottery is known 
as "fast draw" keno, where drawings occur on an elect ronic monitor every five minutes.  As of 2002, 
keno games were operated by lo ttery operators in 11 states;57  (iv) daily numbers games which, like 
lotto and keno, are a variety of random selection nu mber games.  The daily numbers games require 
players to make a  three- or four-digit selection on a daily basis to win a fixed prize in the range of US 
                                                      
44 Regulation of Interstate Off-track Wagering, 15 U.S.C. §§ 3001-3007, (hereinafter "Interstate 
Horseracing Act").  
45 Antigua notes that, in December 2000, the definition of off-trac k wager was amended to include 
"pari-mutuel wagers, where lawful in each state involved, placed or transmitte d by an individual  in one State via 
telephone or other electronic media and accepted by an off- track betting system in the same or another State, as 
well as the combination of any pari-mutuel wagering pools."  See United States General Accounting Office, 
GAO – 03-89, Internet Gambling:  An Overview of the Issues, December 2002 (hereinafter, "GAO Report"),  
p. 43. 
46 Anthony N. Cabot and Robert D. Faiss, "Sports Gambling in the Cyberspace Era," 5 Chapman Law 
Review 1, Spring 2002, p. 7, footnote 33. 
47 Ibid.  
48 NGISC Final Report, p. 2-14, citing  Robert Macy, "Ban on college Sports Betting Could Cost State 
Books Millions", Las Vegas Review – Journal  (18 May 1999), 4A.  The state-sanctioned sports betting market 
in Nevada makes up only a small fraction, about two per cent, of the total gaming revenues generated in 
Nevada. 
49 See the statements of Mr Joe Lupo, manager of a bookmaker in Las Vegas, reported in Michael 
Kaplan, op. cit . footnote 184, pp. 72-73. 
50 Nevada State Gaming Control Board, Gaming Revenue Report for the year ending 
31 December 2002 . 
51 See the advertisement of "Station Casino" for online sports betting in Nevada, in the Las Vegas 
Review Journal  (28 August 2003). 
52 La Fleur's 2001 World Lottery Almanac , p. 21. 
53 See California Lottery's website, http://www.calotte ry.com/games/scratchers/scratchers.asp .   
54 See Georgia Lottery's website, www.galottery.com /stc/games/instantgamesCurrent.jsp?focus=games.  
55 La Fleur's 2001 World Lottery Almanac , p. 6. 
56 Ibid., p. 13. 
57 Ibid.,  p. 21. Examples of online promotions and instructions on how to play electronic keno can be 
viewed at:  www.oregonlottery.org/keno/otherplay.shtml.  WT/DS285/R 
Page 10  
 
$500 to US $2,500.
 58  Some states hold numbers drawings as  often as four times per day.  Daily 
numbers games are offered in almost every state with a lottery;59  (v) video lottery terminals (VLTs), 
which are the newest and fastest growing type of gambling offered by lottery operators in the United 
States.60  South Dakota introduced the first VLT network in the United States in 1989.  Prior to the 
introduction of VLTs, the South Dakota lottery was struggling with total sales of US $21 million per 
year.  A decade after introducing VLTs, the S outh Dakota lottery had grown to over US $500 million 
in annual total sales.61  Currently VLTs are operated in the States of Delaware, Oregon, New York, 
South Dakota, Rhode Island, West Virginia, Louisiana and Montana.62  As of 2000, there were over 
60,000 VLTs in the United States with net sales of US $2.3 billion and profits of US $685 million.63  
In the United States, VLTs are viewed as a complementary product to traditional lottery games 
because they are often located in bars and tavern s, establishments which have not been successful as 
retailers for lottery tickets in the past.64  Historically, the primary oppos ition to the expansion of VLTs 
came from the horse race betting industry, which feared VLTs would reduce their turnover.65  
However, with the successful installation of VLTs at racetracks in Delaware, Louisiana, New York, 
Rhode Island and West Virginia, the horse race betting industry has become an active proponent of 
video gambling and actively lobbies for the legalization of VLTs at racetracks;66  and (v) Sports 
betting.  For instance, the Oregon lottery offers  a sports betting game called "Sports Action".67  
3.14 Finally, Antigua stresses that it is important to keep in mind what this dispute is not about.  
First, it is not about the Internet gaming industry in general.  This proceeding is being brought by the 
government of Antigua and Barbuda on behalf of its domestic industry and for no other.  Second, this 
is not about unregulated, "free for all" gambling.  An tigua is a regulated jurisdiction.  When it started 
developing this industry some eight or more years a go, it did so in a regulated context.  Since then, 
Antigua has overhauled its regulatory scheme twice – most recently with direct participation and 
assistance from US gambling law experts.  And it continues to work on refinements of and 
improvements to its regulatory scheme.  Antigua belie ves that any resolution of this dispute between 
Antigua and Barbuda and the United States should take place in an agreed regulatory context.  In the 
consultations with the United States, Antigua a nd Barbuda expressed its willingness to cooperate with 
the United States on a mutually agreeable regulatory sch eme.  The United States showed no interest in 
doing so, saying only that Internet-based gaming cannot be regulated.  Antigua disagrees, as do others – the United Kingdom for example. 
                                                      
58 La Fleur's 2001 World Lottery Almanac , p. 12.  Examples on online promotions and instructions on 
how to play daily number games, as well as to r eceive updates on winning numbers, can be viewed at 
www.oregonlottery.org/pick4/index_beer.shtml.   
59 La Fleur's 2001 World Lottery Almanac , p. 21. 
60 Ibid., p. 14. 
61 Ibid., p. 14. 
62 Ibid., p. 14 .  The Oregon legislature began offering video lottery gaming in 1991 in order to replace 
the 10,000 gaming machines operating in the grey market.  The Oregon legislat ure contends that the benefits of 
state-run VLTs include the generation of revenue for state programs, ensuring VLTs were run honestly and fairly and ensuring that taxes were paid on VLT winnings (www.oregonlottery.org/video/aboutvideo.shtml). 
63 La Fleur's 2001 World Lottery Almanac , p. 31. 
64 La Fleur's 2001 World Lottery Almanac , p. 14. 
65 Ibid., p. 14. 
66 Ibid., p. 14. See also "Match Made in heaven–L otteries and tracks have proven to be a great 
partnership with VLTs", International Gaming and Wagering Business , July 2003.  In this Article Mr John 
Musgrave of the West Virginia Lottery is quoted as follo ws: "A great deal of the success that can be found in 
West Virginia's racetrack video lotte ry is the result of the foresight he ld by lawmakers who recognized the 
virtue of allowing private businesses to undertake the cost and risk of development and general operation while 
giving the lottery a regulatory role."   
67 Oregon Lottery, www.oregonlottery.org/sports/.   WT/DS285/R 
 Page 11 
 
 
3.15 The United States  replies that the recent growth in the remote supply68 of gambling raises 
serious regulatory concerns for the Government of  the United States.  New technologies, including 
high-speed telecommunications and the Internet, have  facilitated explosive growth in remote supply 
of gambling over the past decade.  This dramatic increase, whatever its origin, has raised serious 
regulatory and law enforcement concerns in th e United States, where authorities throughout US 
history have consistently imposed tight regulati on on gambling and the remote supply of gambling.  
Gambling has been one of the staple activities of  organized crime syndicates.  Law enforcement 
authorities in North America have seen evidence that organized crime plays a growing part in remote 
supply of gambling, including Internet gambling.  In 1999, the Racketeering Records Analysis Unit of 
the Federal Bureau of Investigation provided an analysis to the Senate Committee on the Judiciary 
confirming that "organized crime groups are 'heavily involved' in offshore gambling."69  On April 29, 
2003, Deputy Assistant Attorney General John Malcol m testified at a Congressional hearing that the 
"Department of Justice is concerned about the poten tial involvement of organized crime in Internet 
gambling. ...  We have now seen evidence that orga nized crime is moving into Internet gambling."70  
The Canadian Criminal Intelligence Service has co nfirmed the involvement of organized crime in 
Internet gambling, and expects that it will furthe r develop the criminal opportunities associated with 
Internet gambling.71   
3.16 Remote supply gambling businesses provide criminals with an easy vehicle for money 
laundering, due in large part to the volume, spee d, and international reach of the transactions 
involved, as well as the offshore locations of most re mote suppliers.  The industry is far more cash-
intensive than conventional forms of telephone or Internet commerce, yet it lies outside the special 
regulatory and monitoring structures developed for fi nancial services.  Indivi duals seeking to launder 
ill-gotten gains through remote s upply gambling operations can do so in a variety of ways.  The 
anonymous nature of the interactions and the use of encryption make such transactions difficult to 
trace.  The NGISC, a body established by the US Congress with a mandate to conduct a comprehensive study of the social and economic  impacts of gambling, observed in 1999 that: 
"[G]ambling on the Intern et may provide an easy means for money laundering. 
Internet gambling provides anonymity, remote access, and encrypted data.  To launder money, a person need only deposit m oney into an offshore account, use those 
funds to gamble, lose a small per cent of  the original funds, then cash out the 
remaining funds. Through the dual protection of encryption and anonymity, much of this activity can take place undetected."
72 
                                                      
68 The United States notes that Antigua refers to th e supply of gambling services using communications 
technologies as "cross-border" supply.  In the context of this dispute, ov eruse of the term "cross-border" may 
create confusion.  In fact, a particular activity, such as placing a bet by telephone, may or may not involve 
communication across a national border.  For greater clarity,  the United States will therefore refer to supply of 
gambling services by telephone, Internet or other forms of distance communications as "remote supply" of gambling services.  The United States will refer to "cross-border" supply only in the strict sense of GATS 
Article I:2(a), meaning supply of a service "from the terr itory of one Member into the territory of any other 
Member." 
69  Internet Gambling Prohibition Act, Senate Report No. 106-121, p. 16 (1999). 
70 Unlawful Internet Gambling Funding Prohibition Act and the Internet Gambling Licensing and 
Regulation Commission Act, Hearing before the Subcommittee on Crime, Terrorism, and Homeland Security of 
the Committee on the Judiciary, 108th Congress 10 (2003) (statement of John G. Malcolm). 
71 Criminal Intelligence Service Canada, 2003 Annual Report on Organized Crime in Canada, 
pp. 16-17. 
72 NGISC Final Report, p. 5-6 (June 1999).  See also Financial Action Task Force, Report on Money 
Laundering Typologies 2000-2001 at para. 16 (2001) ("It seems that Internet gambling might be an ideal web-based 'service' to serve as a cover for a money lau ndering scheme through the net. There is evidence in 
some FATF jurisdictions that criminals are using the In ternet gambling industry to commit crime and to launder 
the proceeds of crime..."). WT/DS285/R 
Page 12  
 
3.17 Gambling is also linked to other types of criminal activities, such as fraud schemes.  Criminal 
fraud schemes have been committed by both the ope rators of the gambling activity and by the 
customers of the gambling activity.  A prominent example is the problem of fraudulent lotteries, many of which are offered to remote purchasers.  The l eading US consumer protection agency, the Federal 
Trade Commission ("FTC"), has warned citizens in th e United States about criminal operators that use 
telephone and mail solicitations to se ll fraudulent foreign lottery tickets.
73  In 2002, fraudulent prizes, 
sweepstakes, and lotteries were among the t op ten consumer complaints to the FTC.74  The FTC has 
found that most promotions for foreign lotteries are fraudulent.75  The potential for fraud is heightened 
when gambling opportunities are supplied from remote  locations.  The barriers to establishing an 
online gambling operation are low and unscrupulou s operators can appear and disappear within 
minutes.  Criminal firms can obtain customer credit card numbers, take money to open wagering 
accounts, and then shut down without paying winn ings.   Moreover, unscrupulous operators can 
tamper with software in order to manipulate games in their favour.  Computer hackers can also alter 
software to the detriment of consumers.76 
3.18 The availability of commercial gambling in hom es, schools, and other environments where it 
has traditionally been absent raises special concerns, including concer ns relating to the protection of 
the young.  US law regards gambling as an adult ac tivity.  However, young people use the Internet 
more frequently than any other segment of the pop ulation.  The NGISC reported that more than 
69 per cent of 18- to 24-year-olds in the United Stat es use computers for an average of four hours per 
day.77  Children make easy targets for remote supplie rs of gambling:  "[M]any of these gambling web 
sites have been designed to resemble video games, and therefore are especially attractive to 
children."78  The NGISC also found that "[b]ecause the Internet can be used anonymously, the danger 
exists that access to Internet gambling will be abused by under age gamblers."79 The American 
Psychiatric Association has similarly warned that  "[y]oung people are at special risk for problem 
gambling and should be aware of the hazards of this activity, especially the danger of Internet 
gambling, which may pose an increased risk to high school and co llege-aged populations."80  A US 
Senate Committee considering Internet gambling le gislation in 1999 was "particularly concerned 
about the growth of Internet gambling because young  people have been shown, in recent studies, to 
have significant and growing problems with sports betting. For example, a 1998 study at the University of Michigan found that 35 per cent of student-athletes gambled on sports while attending college."
81  A "growing consensus of research reveals that the rates of pathological and problem 
gambling among college students are higher than an y other segment of the population," the report 
found.82  The US Supreme Court has more generally found that "[g]ambling . . . falls into a category 
of 'vice' activity that could be, and frequently has been, banned altogether."83  As the explosion in 
remote supply of gambling has re ached homes, schools, workplaces – indeed, any location with an 
Internet connection – it has provoked greater concern than more isolated forms of gambling because it 
                                                      
73 FTC Consumer Alert, International Lottery Scams (January 2000).   
74 Federal Trade Commission, A Positive Agenda For Co nsumers:  The FTC Year in Review at p. 13, 
box 4 (April 2003). 
75 FTC Consumer Alert, International Lottery Scams, January 2000.  
76 See Unlawful Internet Gambling Funding Prohibition Act, Hearing before the Subcommittee on 
Crime, Terrorism, and Homeland Security of the Committee on the Judiciary (statement of John G. Malcolm), 
p. 10. 
77 NGISC Final Report, p. 5-4. 
78 Senate Report No. 106-121, p. 13 (quoting testimony of Jeffrey Pash, executive vice president of the 
National Football League). 
79 NGISC Final Report, p. 5-4. 
80 American Psychiatric Association, APA Advisory on Internet Gambling  (16 January 2001). 
81 Senate Report No. 106-121, p. 14. 
82 Ibid. (quoting testimony of Bill Saum, Director of Agent and Gambling Activities for the National 
Collegiate Athletic Association). 
83 United States v. Edge Broadcasting Co.,  509 U.S. 418, 426 (1993).  WT/DS285/R 
 Page 13 
 
 
is inherently more difficult to control.84  While many Americans participate in various limited forms 
of legalized gambling, it remains true nonetheless that restrictions on remote supply of gambling 
services in the United States reflect legislators' and citizens' concerns about their inability to control 
an activity as to which many individuals and groups harbour serious ethical and religious 
reservations.85 
3.19 Finally, the supply of gambling into privat e homes, workplaces, and other environments 
creates additional health risks.  The Council on Com pulsive Gambling reports that five per cent of all 
persons who engage in gambling become addicted to it.  Dr. Howard J. Schaffer of the Harvard 
Medical School's Division on Addictive Studies comp ares Internet gambling to "new delivery forms 
for addictive narcotics,"86 and a US Senate committee has concluded that "Internet gambling threatens 
to expand the number of addicted gamblers."87 
3.20 The United States further argues that Antigua's  statement of facts contains misleading 
statements, inaccuracies, and irrelevant material.   Many of the disputable facts appear to have little 
bearing on the substance of this proceeding.  For the sake of brevity and clarity, the United States 
focuses on the most broadly misleading elements of An tigua's statement.  Contrary to what is asserted 
by Antigua, the United States activel y enforces its laws against domestic illegal gambling.  In fact, 
illegal gambling activity is in no way sanctioned by  the United States, and arrest figures for illegal 
gambling remain impressive.  Additionally, Antigua's  data do not appear to include the many cases in 
which gambling was one of several charges, but not the main charge.  For example, many cases against organized crime figures include gambling char ges.  Gambling in the United States is permitted 
only within particular locations and facilities de signated by law, and only in forms that the 
United States believes can be effectively regulat ed.  Where it exists, it operates under the most 
rigorous regulatory constraints.  As the NGISC ob served, "nowhere is gambling regarded as merely 
another business, free to offer its wares to the public."
88  Instead, gambling "is the target of special 
scrutiny by governments in every jurisdiction where it exists."89  The purpose of that regulatory 
scrutiny is to protect the public, not to protect domestic industry.  Indeed, if its purpose were 
protectionist, it would have failed miserably, sin ce numerous foreign suppliers of gambling services 
are already present in the US mark et.  Regardless of foreign or domestic origin, all providers of 
gambling services in the United States operate under severe restrictions.  And when it comes to remote supply of gambling, those restrictions are particularly stringent. 
3.21 The United States submits that it is puzzled by the breadth of Antigua's description of the 
gambling market in the United States.  Antigua st ates that it licenses only two types of cross-border 
                                                      
84 Unlawful Internet Gambling Funding Prohibition Act and the Internet Gambling Licensing and 
Regulation Commission Act, Hearing before the Subcommittee on Crime, Terrorism, and Homeland Security of the Committee on the Judiciary, 108
th Cong., p. 7 (2003) (statement of the Honorable James A. Leach, 
Representative in Congress from the State of Iowa) ("Casino gambling as it has been sanctioned in all Western 
democracies has only been allowed to exist with comprehensive regulation. Internet gambling lacks such safeguards. It is a danger to the family and society at la rge. It should be ended.  From a family perspective, the 
home may be considered a castle; but it should never be a casino."). 
85 By way of illustration, an unsuccessful 1999 propo sal for additional federal legislation restricting 
Internet gambling enjoyed support from, among others, the African Methodist Episcopal Church; the American 
Muslim Council; the Christian Coalition; the Church of Jesus Christ of Latte r Day Saints; the Family Research 
Council; Focus on the Family; Friends United Meeting; the National Coalition Against Gambling Expansion; 
the National Council of Churches; the Presbyterian Chur ch; Rev. Jay Lintner, Director, Washington Office of 
the United Church of Christ, Office of Church in Society; the United Methodist Church, General Board of Church and Society; the Southern Baptist Convention, Ethics and Religious Liberty Commission; and the 
Traditional Values Coalition.  Senate Report No. 106-121, p. 9 (1999). 
86 Internet Gambling Prohibition Act, Senate Report No. 106-121, (1999), p. 15. 
87 NGISC Final Report, p. 4-1. 
88 NGISC Final Report, p. 3-1. 
89 Ibid. WT/DS285/R 
Page 14  
 
gambling and betting – "virtual casinos" and sports betting ("sports book") operators, with the former 
supplied by Internet and the latter by Internet and telephone.  These would therefore appear to be the 
only Antiguan services and service suppliers at issue in this dispute.  Concerning casino gambling, Antigua highlights two locations where regulated casi no gambling is available – Nevada and Atlantic 
City – but fails to acknowledge the extreme string ency with which officials in these and other US 
locations exercise regulatory control over gambling.  Antigua also fails to cite any example of a 
"virtual casino" operating legally anywhere in the United States.   
3.22 Antigua's description of lotteries in the United States is misleading.  There is no nationwide 
lottery industry; rather, there are 39 state-operate d and -controlled lotteries, each of which offers 
services solely within the borders of the state that  authorized it.  All are controlled by stringent 
legislation, rules and procedures.  While there ar e some lottery games that are offered by lottery 
authorities of more than one state, they are not offered by remote supply.  Similarly, Antigua's description of pari-mutuel wagering mistakenly st ates that the Interstate Horseracing Act permits 
betting on horse races over the Internet.  The In terstate Horseracing Act does not provide legal 
authority for any form of Internet gambling.  As  clarified in the Presidential Statement on Signing 
accompanying the bill enacting the December 2000 amen dments to the IHA, nothing in the IHA (a 
civil statute) overrides the previously enacted crim inal laws applicable to Internet gambling.  
Specifically, then-President Clinton stated that: 
"The Department of Justice, however, do es not view this provision as codifying the 
legality of common pool wagering and inters tate account wagering even where such 
wagering is legal in the various States involved for horseracing, nor does the 
Department view the provision as repealing or amending existing criminal statutes 
that may be applicable to such activity, in particular, sections 1084, 1952, and 1955 
of Title 18, United States Code."
90 
3.23 The Department of Justice has repeatedly affirm ed the view that the Interstate Horseracing 
Act does not override pre-existing criminal laws app licable to Internet gambling and other forms of 
remote gambling.  Indeed, Antigua's own evidence confirms this.91 
3.24 Finally, with respect to sport wagering, Antigua  identifies no examples of the legal offering of 
sports book services outside Nevada.  Nevada regulators have imposed stringent precautions to ensure 
that sports book services offered by computer a nd telephone in southern Nevada are provided only 
within the immediate vicinity, and not through In ternet gateways accessible to the general public. 
3.25 The United States submits that Antigua's attemp ts to regulate gambling and money laundering 
cannot address basic concerns relating to remote suppl y of gambling.  Antigua states that it introduced 
"industry-directed" regulation of gambling as early  as 1997, and that it maintains financial sector 
regulations that meet or exceed international st andards.  The United States wishes to comment on 
these statements briefly even though it notes that  Antigua fails to link these assertions to its 
substantive arguments.  Antigua asserts that Anti guan operators "undertake some form of identity 
verification" of persons who register to use Anti guan gambling services.  Antigua further states that 
children do not register to play on Antiguan gamb ling sites because children lack access to payment 
instruments, or because their parents can stop them.  In fact, such regulation is infeasible.  Children 
have ready access to payment instruments, and no  technology has yet been developed to enable 
                                                      
90  Statement on Signing the Departments of Commer ce, Justice, State, the Judiciary, and Related 
Agencies Appropriation Act, 2001 , 36 Weekly Comp. Pres. Doc. 31 53, 3155-3156 (Decem ber 21, 2000), 
Exhibit U.S.-17. 
91  See  M. Shannon Bishop, And They're Off: The Legality of Interstate Pari-Mutuel Wagering and its 
Impact on the Thoroughbred Horse Industry,  89 Kentucky Law Journal 711, 713 (2001) ("[T]he Department of 
Justice has recently taken the position that interstate pari-mutuel wagering violates the Interstate Wire Act, 
indicating that the horseracing industry  proceeds in its business at its own ri sk."), submitted by Antigua to the 
Panel as Exhibit-39.  WT/DS285/R 
 Page 15 
 
 
constraints on Internet gambling even approaching those that are possible in other settings where 
gambling can be confined and access to it strictly controlled.92 
3.26 Antigua  rejects the US argument that Antigua's arguments contain inaccuracies and 
misstatements.  For instance, Antigua did not mi srepresent the law enforcement efforts of the 
United States when it comes to controlling its no n-sanctioned gambling activity.  The statistics 
themselves – from about 123,000 arrests in 1960 down to around 15,000 arrests in 1995 – remain 
unchallenged and impressive.  The United States also fails to describe, much less to establish, how Antigua's description of the lottery industry in the United States is misleading.  There are other 
examples, in each case unfounded and unproven.  For instance, the United States submits that the 
Las Vegas Internet sports betting service referred to  by Antigua does not operate on the Internet but 
on a "local 'Private Network". In reality, the adve rtisement refers to a so-called "Virtual Private 
Network".  This is a security technology used ove r the Internet, not a separate local network.  
3.27 Antigua submits that the United States has in la rge part chosen to ignore the points made and 
evidence offered by Antigua and Ba rbuda as if they were not made and not offered – with the result 
being that many of Antigua's arguments have not b een rebutted or even addressed.  For example, the 
United States assumes that Antigua is an unregul ated jurisdiction. This is not the case and the 
United States adduced no evidence contradicting Anti gua's evidence regarding regulation.  As a result 
the extensive discussion by the United States rega rding the ills of unregulated gambling becomes 
irrelevant.  Another striking feature of the US submission is its reliance on completely 
unsubstantiated, conclusory statements that it descr ibes as "fact."  On the few occasions an attempt is 
made at substantiation, most references are to self-serving statements of American politicians and 
government officials.  In the rare instances where the United States does cite independent sources, the 
sources prove to be either taken out of context (such as the quote in paragraph 3.19 attributed to 
Dr. Howard Shaffer who was in fact referring to a ll forms of electronic gambling and betting), or of 
dubious value. 
B. L
EGAL ARGUMENTS  
1. Applicability of the GATS 
3.28 Antigua  submits that, in Canada – Autos , the Appellate Body found that a threshold question 
for the application of the GATS is whether the m easure at issue is a measure "affecting trade in 
services."93  In this dispute it is clear that this is the ca se.  First, there can be no real dispute that the 
offerings of the gaming industry of Antigua to  consumers in the United States and elsewhere 
constitute "services".  Second, it has been firmly  established in WTO law that what constitutes 
"measures (…) affecting trade in services" is to be ve ry broadly construed.  As  stated by the Appellate 
Body in EC – Bananas III:  
"In our view, the use of the term 'affecting' re flects the intent of the drafters to give a 
broad reach to the GATS.  The ordinary meaning of the word 'affecting' implies a measure that has 'an effect on', which indi cates a broad scope of application. This 
interpretation is further reinforced by the c onclusions of previous panels that the term 
'affecting' in the context of Article III of the GATT is wider in scope than such terms 
                                                      
92 For example, in 2002, the Fede ral Trade Commission conducted an informal survey in which found 
that minors could easily access gambling websites.  Th e survey also found that  there was no effective 
mechanism to block minors from entering.  Federal Trade Commission, Press release: FTC Warns Consumers about Online Gambling and Children (26 June 2002).  See also  NGISC Final Report, p. 5-4. ("In most instances, 
a would-be gambler merely has to fill out a registration form in order to play.  Most sites rely on the registrant to 
disclose his or her correct age and make little or no attemp t to verify the accuracy of the information. Under age 
gamblers can use their parents' credit cards or even their own credit and debit cards to register and set up 
accounts for use at Inte rnet gambling sites.). 
93 Appellate Body Report on Canada – Autos , para. 152.  See also Article I:1 of the GATS.  WT/DS285/R 
Page 16  
 
as 'regulating' or 'governing'.  (…) We al so note that Article I:3(b) of the GATS 
provides that 'services' includes any service  in any sector  except services supplied in 
the exercise of governmental authority' (e mphasis added), and that Article XXVIII(b) 
of the GATS provides that the "'supply of a service' includes the production, 
distribution, marketing, sale and delivery of a service".  There is nothing at all in 
these provisions to suggest a limited scope of application for the GATS."
94 
3.29 The services at issue are supplied from Antigua by means of distant communication (in 
particular through Internet connection, telecommuni cations or postal or delivery services) into the 
territory of the United States.  Antigua submits that  this constitutes "mode 1" or "cross-border" supply 
of services, as defined in Article I:2(a) of the GATS.  This view is supported by paragraph 19 the 
1993 Scheduling Guidelines which gives examples for th e four modes of supply;  this same paragraph 
has been confirmed, unchanged, in para graph 28 of the 2001 Scheduling Guidelines95.  Antigua 
further notes that a "Progress Report" adopted by the Council for Trade in Services on 19 July 1999 concerning the "Work Programme on Electronic Comme rce" mentions that "there was particular 
difficulty" in making a distinction between suppl y under modes 1 and 2 ("cross-border supply" and 
"consumption abroad," respectively).
96  While that may be the case in  certain circumstances Antigua 
believes that this is not the case here.97  In any event whether the gambling and betting services at 
issue in this proceeding are supplied in mode 1 or  mode 2 does not have a material impact on this 
dispute because the United States h as made the same commitments for both modes of supply.   
2. As to whether the United States has undertaken a specific commitment on gambling and 
betting services98 
3.30 Antigua  argues that the GATS itself is a relatively br ief document.  The full nature and extent 
of each Member's obligations under the GATS can only be determined by refere nce to their respective 
"schedules of specific commitments" that are manda ted by GATS Article XX:1.  Once developed, the 
schedules of specific commitments of the Members "s hall be annexed to [the GATS] and shall form 
an integral part thereof."99  Antigua submits that, in its Schedule of commitments under the GATS100, 
the United States has made a full commitment for th e cross-border supply of services classified under 
sub-sector 10.D "Other recreational services (except sporting)."101  In drafting its Schedule, the 
United States made use of the Services Sectoral Cl assification List prepared by the GATT Secretariat 
during the Uruguay Round multilateral trade negotiations.102  Sub-sector 10.D of W/120 is headed 
                                                      
94 Appellate Body Report on EC – Bananas III , para. 220. 
95 Guidelines for the Scheduling of Specific Commitm ents Under the General Agreement on Trade in 
Services (GATS) , adopted by the Council for Trade in Services on 23 March 2001, S/L/92, 28 March 2001 
(hereinafter the "2001 Scheduling Guidelines"). 
96 S/L/74, para. 5 
97 Antigua notes that the 1993 Scheduling Guidelines provide the following explanation about 
"consumption abroad": "This mode of supply is often referred to as 'movement of the consumer'.  The essential 
feature of this mode is that the service is delivered ou tside the territory of the Member making the commitment.  
Often the actual movement of the consumer is necessary as  in tourism services.  However, activities such as ship 
repair abroad, where only the property  of the consumer 'moves,' or is situ ated abroad, are also covered." See 
Scheduling of Initial Commitments in Trade in Services – Explanatory Note , MTN.GNS/W/164, 
3 September 1993, para. 19 (hereinafter the "1993 Scheduling Guidelines").  This definition is taken over 
without change in para. 29 of the 2001 Scheduling Guidelines.  
98 In addition to the arguments presented here, see also parties' replies to Panel question Nos. 1-8 and 
30-31 in Annex C of this Report. 
99 GATS, Article XX:3. 
100 The United States of America – Schedule of Specific Commitments , GATS/SC/90, 15 April 1994 
(hereinafter the "US Schedule"). 
101 Antigua notes that, with regard to that sector, the United States has also made a full commitment for 
"consumption abroad." 
102 Services Sectoral Classification List, Note by the Secretariat, MTN.GNS/W/120, 10 July 1991 
(hereinafter the "W/120").  WT/DS285/R 
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"Sporting and other recreational services" and lists "964" as the corresponding CPC number.103  Its 
heading 964 "Sporting and other recreati onal services" is broken down as follows: 
 "964 Sporting and other recreational services 
  9641 Sporting services    96411 Sports event promotion services 
   96412 Sports event organization services 
   96413 Sports facility operation services    96419 Other sporting services    9649 Other recreational services 
   96491 Recreation park and beach services 
   96492 Gambling and betting services    96499 Other recreational services n.e.c."  3.31 Sub-sector 10.D of the US Schedule is headed "Other recreational services (except sporting)".  
Thus the United States has clearly excluded CPC category "9641 Sporting services" from the 
commitments it has made in sub-sector 10.D of its Schedule.  By the same token sub-sector 10.D of the US Schedule clearly includes CPC category "9649 Other recreational services" which encompasses CPC category "96492 Gambling and betti ng services".  During consultations with the 
United States, Antigua fully disclosed its interpretatio n of the US Schedule and the legal basis for that 
interpretation to the United States, both orally and in writing.  In reply the United States simply 
denied that it has made commitments for gambling a nd betting services.  Despite being asked to do so 
by Antigua the United States has not explained:  (i) why Antigua's interpretation of the Schedule is legally incorrect;  (ii) what alternative approaches s hould be followed to interpret the US Schedule; or  
(iii) what type of activities are, in the view of the United States, covered by sub-sector 10.D "Other 
recreational services (except sporting)" in its Schedule. 
3.32 Antigua submits that, because the US Schedule is  made an integral part of the GATS by 
Article XX:3 of the GATS, it must be interpreted on the basis of the general rules of interpretation 
provided for in Article 31 of the Vienna Convention .
104  Antigua's interpretation of the US Schedule 
follows from: (i) the ordinary meaning of the words  "Other recreational services" (Article 31:1 of the 
Vienna Convention); (ii) agreements and instrume nts connected to the conc lusion of the GATS that 
are part of its context (Article 31:2 of the Vienna Convention); and (iii) practice in the application of 
the treaty which establishes the agreement of the par ties regarding its interpretation (Article 31:3 of 
the Vienna Convention).  None of the interpre tation methods permitted by  the Vienna Convention 
contradicts Antigua's interpretation of the US Schedule.  
3.33 Antigua argues that even an interpretation excl usively based on the ordinary meaning of the 
words "other recreational services" in the US Schedul e leads to the plausible conclusion that gambling 
and betting services fall within this broadly worded cat egory.  It could perhap s be argued that, if only 
taking into account the "ordinary meaning" of the words, gambling and betting services might be 
classified under "Entertainment services" (sub-sector 10.A of the US Schedule).  However, that would 
not change the conclusion because the United Stat es also made a full commitment for cross-border 
supply of services under that category.105 
                                                      
103 Panel Report on EC – Bananas III (US) , para. 7.289 and 1993 Scheduling Guidelines, para. 16. 
104 See, by analogy, Appellate Body Report on EC  – Computer Equipment , para. 84 (concerning the 
interpretation of a GATT 1994 Schedule).  
105 Antigua notes that the United States also has a full commitment for "consumption abroad" for 
sub-sector 10.A "Enter tainment services". WT/DS285/R 
Page 18  
 
3.34 Antigua argues that the two most important docum ents that are part of the context of the 
GATS for the interpretation of any GATS sche dule are the W/120 list and the 1993 Scheduling 
Guidelines.  Paragraph 16 of the 1993 Scheduling Guidelines provides that: 
"[T]he legal nature of a schedule as well as the need to evaluate commitments, require 
the greatest possible degree of clarity in the description of each sector or 
sub-sector scheduled.  In general the classification of sectors and sub-sectors should 
be based on [W/120].  Each sector contained in [W/120] is identified by the corresponding Central Product Classification (CPC) number.  Where it is necessary to 
refine further a sectoral classification, this should be done on the basis of the CPC or other internationally recognized classifi cation (e.g. Financial Services Annex)." 
3.35 This paragraph was carried over in the 2001 Sc heduling Guidelines without change.  The US 
Schedule clearly follows the structure of W/ 120, with the exception of insurance services 
(sub-sector 7.A) in relation to which the Sche dule explicitly states (no doubt pursuant to the 
Scheduling Guidelines) that "[C]ommitments in this sub-sector are undertaken pursuant to the 
alternative approach to scheduling commitments set forth in the Understanding on Commitments in 
Financial Services."   
3.36 Antigua states that, during c onsultations, the United States submitted that W/120 is not a 
legally binding document.  It also stated that  the 1993 Scheduling Guide lines provide only general 
guidance and that the document itself provides in pa ragraph 1 that it "should not be considered as an 
authoritative legal interpretation of the GATS."  Th e latter phrase, however, only confirms what is 
obvious in the light of Article IX:2 of the WTO Agreement which reserves the right to make such 
interpretations to the Ministerial Conference and the General Council.  Furthermore this phrase does 
not relate to a provision such as paragraph 16 of the 1993 Scheduling Guidelines which provides no 
interpretation at all (unlike, for instance, para graph 7 which interprets the national treatment 
principle).  Paragraph 16 (and various others) merely explain how WTO Members should schedule 
items and how, in the interest of clarity, they s hould provide concordance w ith the CPC (or additional 
definitions) should they wish to use their own cl assifications or definitions.  In doing so, these 
paragraphs simply set a standard for clear and unambiguous communication in a legal context 
requiring "the greatest possible degree of clarity."
106  In the absence of such standards for 
communication, GATS schedules could have varied wildly in the drafting and WTO Members might 
not have been able to understand each other's sch edules.  In that light, documents such as the 
Scheduling Guidelines and W/120 obviously form a ve ry important part of the context of the US 
Schedule. 
3.37 Antigua submits that W/120's status as an "agreem ent" or "instrument" that is part of the 
context of the GATS (and the WTO Agreement in gene ral) is further confirmed by Article 22 of the 
DSU concerning the suspension of concessions in  relation to non-compliance with rulings and 
recommendations of the DSB.  Paragraph (3)(f)(ii) of Article 22 provides that "for purposes of this 
paragraph, 'sector' means:  [...] (ii) with respect  to services, a principal sector as identified in the 
current 'Services Sectoral Classification List' which identifies such sectors".107  Given the clear 
importance and acceptance of W/120 in construing  Member's commitments under the GATS, the 
United States had the ability unambiguously to exclude gambling and betting services from its 
commitments under its Schedule.  Indeed, numer ous WTO Members that made commitments for 
                                                      
106 1993 Scheduling Guidelines, para. 16. 
107 The original footnote provides "[T]he list in document MTN.GNS/W/120 identifies eleven sectors."  WT/DS285/R 
 Page 19 
 
 
sub-sector 10.D have totally or partially excl uded gambling and betting services from the scope of 
their commitment in that sector.108  The United States has not done so. 
3.38 Antigua observes that, since the entry into  force of the GATS, WTO Members have 
consistently referred to W/120 (and its cross-refere nces to the CPC) as th e classification used for 
GATS purposes and as the main point of reference fo r any discussion on the classification of services.  
The Appellate Body has used the CP C as an interpretative tool even when the issue at stake was the 
scope of the GATS in general rather than the interpretation of a Member's schedule.  In EC – 
Bananas III , for instance, the Appellate Body refers to  the CPC when it draws the conclusion that 
banana traders of United States origin are service s uppliers and that their activities come within the 
scope of the GATS.109  This qualification allowed the a pplication of Article II of the GATS 
(application of which is not linked to Member 's schedules) to the situation at issue in EC – 
Bananas III (US) .  In Canada – Autos , several WTO Members and the Panel itself referred to the 
1993 Scheduling Guidelines and its addendum110 when discussing the interpretation of GATS 
schedules and the GATS itself.111  None of the parties in that dispute (nor the Panel) submitted that it 
would be inappropriate to  make use of the 1993 Scheduling Guid elines for the interpretation of GATS 
schedules.  Finally, even the United States Inte rnational Trade Commission (hereinafter "USITC") 
uses W/120 and its cross-references to CPC as a tool  to interpret the US Schedule.  In 1997, the 
USITC published a document explaining the US Schedule.112  On page viii of that document, it is 
stated that "[T]he US Schedule makes no explic it references to CPC numbers, but it corresponds 
closely with the GATT Secretariat's list."  The USITC Document also contains a "Concordance of 
Industry Classifications" which is described as follows: 
"The concordance developed by the USITC clarifies how the services sectors 
referenced in the GATT Secretariat's list, the CPC System, and the US Schedule correspond.  The first column of the concor dance identifies the service sectors listed 
by the GATT Secretariat.  The second column  identifies the CPC classifications that 
correspond to the GATT Secretariat's list.  The third column identifies the sectors 
addressed in the US Schedule, and the fourth column provides more detailed 
information regarding the structure and coverage of the US Schedule."
113 
3.39 According to the actual concordance table in cluded in the USITC Document, sub-sector 10.D 
of the US Schedule corresponds to sub-sector 10.D of W/120 and CPC code 964.  The fourth column 
(in which more information is provided on the stru cture and coverage of th e US Schedule) provides 
that sub-sector 10.D of the US Schedule excludes "sporting."  It does not, however, state that 
gambling and betting services, which are covered by CPC code 964, are excluded from the US 
Schedule. 
                                                      
108 Antigua notes that, for instance, Austria, Bulg aria, the European Communities, Finland, Slovenia 
and Sweden excluded gambling from the scope of their respective commitments under sub-sector 10.D by specifically using the words "other than gambling" or similar words.  
109 Appellate Body Report on EC – Bananas III , paras. 225-227. See also the Appellate Body Report on 
Canada –Autos , para. 157, where the Appellate Body draws the co nclusion that there is "trade in services" in 
that case, inter alia , on the basis of a reference to the CPC. 
110 Scheduling of Initial Commitments in Trade in Services: Explanatory Note – Addendum , 
MTN.GNS/W/164/Add.1, dated 30 November 1993. 
111 Panel Report on Canada – Autos : for Canada, see para. 10.241; for Japan, see para. 6.1002; for both 
complaining parties (i.e. Japan and the EU), see pa ra. 10.295; for the Panel itself, see para. 10.243. 
112 United States International Trade Commission, US Schedule of Commitments under the General 
Agreement on Trade in Services – With explanatory materials prepared by the U.S. International Trade 
Commission  (hereinafter "USITC Document"), dated May 1997. As is stated on page vii of the USITC 
Document, the USITC has "assumed responsibility for maintaining and updating, as necessary, the United 
States' Schedule of Commitments (…)." 
113 Ibid., page viii. WT/DS285/R 
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3.40 The United States  replies that Antigua has failed to explain why any particular US gambling 
measure(s) that might be relevant in this disput e apply to services or service suppliers operating in a 
specific services sector inscribed in the US Schedul e to the GATS.  Instead, Antigua simply asserts 
that all gambling falls within "other recreati onal services," or possibly within "entertainment 
services," and that the United States has made commi tments in its schedule under "other recreational 
services" and "entertainment services."  The comm itments that a Member schedules for specific 
sectors under Part III of the GATS apply to the Memb er's measures affecting the supply of services in 
those sectors.  Article XVI:2 thus refers to certain  "measures which a Member shall not maintain or 
adopt," and Article XVII:1 refers to national treatment  "in respect of all measures affecting the supply 
of services."  Article XVIII refers to "commitmen ts with respect to measures." Articles XIX:1 and 
XX:2 also refer to "measures."  In order to est ablish the relevance of any commitment that the 
United States may have made, Antigua must therefore make a prima facie  case: (i) that the 
United States has adopted or maintained some specifi c measure(s); (ii) that the scope and meaning of 
the specific measure(s) adopted or maintained is such that they affect the cross-border supply of 
gambling services; (iii) that the United States has insc ribed a commitment in the relevant sector of its 
schedule to the GATS for measures affecting those ser vices; and (iv) that the commitment prohibits 
the maintenance or adoption of such measure(s).  In  this case, Antigua has refused to make a case as 
to steps (i) or (ii).  This in turn makes it impossi ble to carry out steps (iii) and (iv).  Had Antigua 
argued the existence and meaning of particular measu res, the United States would have been prepared 
to examine under step (iii) whether the measures af fect services subject to one or more US sectoral 
commitments.  By refusing to offer argumenta tion as to specific measures, however, Antigua has 
denied the Panel any means to examine whether the United States has made any relevant sectoral 
commitments under the GATS. 
3.41 The United States argues that, even assuming arguendo  the possible relevance of sector 10, 
Antigua's claims to find there a US commitment for cross-border supply of gambling services rely on the W/120 and its references to the CPC.  These arguments improperly treat W/120 as an agreement 
or instrument made in connection with the c onclusion of the GATS under the customary rules of 
interpretation of public international law refl ected in Article 31(2)(a) or 31(2)(b) of the  Vienna 
Convention.  In fact, W/120 is part of the negot iating history of the GATS, which is at best a 
supplementary means of interpretation pursuant to the customary rules of interpretation of public 
international law reflected in Ar ticle 32 of the Vienna Convention.
114  The context for the US 
Schedule includes other Members' schedules.115  Accordingly, the proper context for the US Schedule 
includes the fact that some Members based their sche dules, or parts of them, on the CPC, while others 
did not.  There are a multitude of references to the CPC in some of the Members' schedules, while the 
US Schedule clearly does not reference or rely on the CPC.  This context confirms that Members were 
free not to use CPC definitions – simply by not referring to them.116  In fact, many Members' 
schedules refer to the CPC for some commitments but  not all, while others deviate from the W/120 
correspondence table comparing W/120 to the CPC by identifying W/120 entries with CPC numbers 
that represent only a subset of the three-digit CP C numbers listed in W/120.  The negotiating history 
of the GATS confirms that, while Members were en couraged to follow the broad structure of W/120, 
                                                      
114 The United States notes that, while not saying so explicitly, the EC – Bananas III (US)  panel 
appears to have regarded W/120 as part of the negotiating history of the GATS.  See  Panel Report on EC – 
Bananas III (US) , para. 7.289 (discussing W/120 in the context of the Uruguay Round negotiations).  Moreover, 
W/120 was drawn up by the Secretariat for use for us e in negotiations; as such it does not constitute an 
"agreement relating to the treaty which was made by all th e parties" or an "instrumen t ... accepted by the other 
parties as an instrument related to the treaty."  See  Panel Report on US – Section 110(5) Copyright Act , para. 
6.45.  This is confirmed by the fact that some parties referred to it in their schedules and others did not. 
115 According to the United States, the other schedules are "annexes" within the meaning of Vienna 
Convention Article 31(2).  Article XX:3 of the GATS confirms this by providing that "[s]chedules of specific 
commitments shall be annexed to this agreement and shall form an integral part thereof." 
116 The United States adds that some schedules include interpretive notes in which certain Members 
agreed that their schedules would have the meaning attributed to them by the CPC, while other schedules 
include different interpretive notes, or none at all.  WT/DS285/R 
 Page 21 
 
 
it was never meant to bind Members to the CP C definitions, nor to any other "specific 
nomenclature."117  Because the United States did not bind itself to, or reference or rely on, the CPC in 
the text of its schedule, the CPC definitions cannot control the interpretation of the US Schedule.   
3.42 The United States submits that the question of  whether to tie commitments of the United 
States or any other Member to CPC definitions w as a matter for negotiations, the answer to which 
should not be imposed post hoc  through dispute settlement.  To do so would contradict the principles 
relied upon by the Appellate Body in EC – Computer Equipment,  where the Appellate Body found, 
with respect to a GATT schedule, that: 
"Tariff negotiations are a process of reci procal demands and concessions, of "give 
and take".  It is only normal that importi ng Members define their offers (and their 
ensuing obligations) in terms which suit their needs.  On the other hand, exporting 
Members have to ensure that their co rresponding rights are described in such a 
manner in the Schedules of importing Members that their export interests, as agreed in the negotiations, are guaranteed. ...  We cons ider that any clarification of the scope 
of tariff concessions that may be required during the negotiations is a task for all 
interested parties."
118 
3.43 The reasoning in EC – Computer Equipment  is equally applicable to negotiations over 
services schedules.  The terms of the US offer, and of certain other Members' offers, were defined 
without reference to the CPC.  All Members agreed to those schedules, and did so with full awareness 
that some parties had explicitly chosen to bind themselves to the CPC and others had not.119  T h e  
significance of the presence or absence of explicit CPC references in a commitment was confirmed by 
the panel in EC – Bananas III (US).   The panel observed that "in scheduling commitments on 
'wholesale trade services', the EC inscribed the CPC item number (622) in its services schedule."120  It 
was on the basis of this text that the panel reas oned that:  "[T]herefore, any breakdown of the sector 
should be based on the CPC.  Consequently, any lega l definition of the scope of the EC's commitment 
in wholesale services should be based on the CPC description of the sector and the activities it 
covers."121 
3.44 The United States further submits that a proper interpretation of the US Schedule, without 
recourse to the CPC, would show that the United States made no commitment for measures affecting 
gambling services.  In order to give effect to th e terms of the wide variety of GATS schedules, the 
Panel must distinguish between "CPC commitments,"  which include textual re ferences to numerical 
CPC codes, and "non-CPC commitments," the text of which make no reference to the CPC.  The EC – 
Bananas III (US)  panel addressed interpretation of CPC commitments122, but no panel has yet 
addressed the interpretation of non-CPC commitments.  Because of the absence of a textual basis for 
                                                      
117 See Note on the Meeting of 27 May to 6 June 1991,  MTN.GNS/42, paras.18-19 (24 June 1991) 
("The representatives of the United States, Poland, Malays ia and Austria said that th e [sectoral classification] 
list should be illustrative or indicative and not bind parties to any specific nomenclature."). 
118 Appellate Body Report on EC – Computer Equipment , paras. 109-110.  
119 Ibid.  ("while each Schedule represents the tariff commi tments made by one Member, they represent 
a common agreement among all Members.").  The United States submits that Antigua's CPC argument also 
improperly relies on a document by the USITC, which it refers to under the heading of "practice in the 
application of the treaty."  This document does not constitu te practice by parties to a treaty for purposes of the 
customary rule of interpretation reflected in Ar ticle 31:2(b) of the Vienna Convention.  See  Appellate Body 
Report on Chile – Price Band System , paras. 213-214.  Moreover, the document in question has no legal 
significance.  The explicit purpose of the concordance in  the document is only to "facilitate comparison of the 
US Schedule with foreign schedules." 
120 Panel Report on EC – Bananas III (US),  para. 7.289. 
121 Ibid. 
122 Ibid. WT/DS285/R 
Page 22  
 
referring to the CPC, the legal definition of the scope of a non-CPC commitment must be deduced 
through application of customary rules of treaty interpretation. 
3.45 The United States notes that Antigua's allegati ons regarding a possible US commitment for 
gambling services rely on sectors 10.A and 10.D of the US Schedule to the GATS.  However, the relevant text makes no explicit reference to gambling services.  The ordinary meaning of 
"recreational" is "[o]f or pertaining to recreation; us ed for or as a form of recreation; concerned with 
recreation."
123  Recreation is "[a]n activity or pastime pursued, esp. habitually, for the pleasure or 
interest it gives."124   Recreation is also defined as "refreshme nt of strength and spirits after work" or 
"a means of refreshment or diversion."125  The ordinary meaning of "entertainment" is "[t]he action of 
occupying a person's attention agreeably; amusement" or "[a] thing which entertains or amuses 
someone."126   It is also defined as "the act of entert aining" or "something diverting or engaging."127  
With regard to the "except sporting" notation in sub-sector 10.D of the US Schedule, the ordinary 
meaning of "sporting" according to the New Shorter Oxford English Dictionary  is "[t]he action of 
sport," as well as "participation in sport; amusement;  recreation;" and "[i]nterested in or concerned in 
sport; ... a person interested in sport from purely me rcenary motives . . . [n]ow esp[ecially] pertaining 
to or interested in betting or gambling".128  "Sporting" is defined in Merriam-Webster's Collegiate 
Dictionary  as "of, relating to, used, or suitable for sport" or "of or relating to dissipation and 
esp[ecially] gambling".129   The ordinary meaning of "sporting" in "except sporting" thus encompasses 
gambling.  Based on the ordinary meaning of the words "recreational," "entertainment," and "sporting," it is impossible to conclude that gambli ng and betting services must be considered to fall 
within sub-sector 10.A "entertainment" or sub-sector 10.D "recreational" services in the US Schedule.  
Moreover, Antigua has not explained why it thinks  gambling services should fall within the "ordinary 
meaning" of those terms. 
3.46 The United States submits that an examination of  the US Schedule's context – in particular, 
other Members' schedules – also fails  to dem onstrate that the United States undertook a commitment 
with regard to gambling services.  Some Memb ers inscribed gambling-related limitations and 
restrictions under sub-sector 10.D "recreational services."
130  However, notwithstanding references to 
the CPC, others included gambling restrictions under sub-sector 10.A "entertainment services,"131 
others inscribed them under tourism services132, and at least one Member scheduled such restrictions 
under sub-sector 10.E "other."133  Significantly, other Members' schedules confirm the existence of a 
residual "other" category that is within sector 10, but not captured by the text of its other subcategories (sub-sector 10.E).  Two Members made commitments in sub-sector 10.E;
134  the United 
States did not.  The fact that Members were free to schedule this residual category provides further 
support that Antigua's claims are in error.  Sc heduling of the 10.E residual category would have 
provided a default location in the US Schedule for services that could not be classified elsewhere in 
sector 10.  As shown above, gambling is one such  service.  Without textual evidence placing 
                                                      
123 New Shorter Oxford English Dictionary,  p. 2508 (1993). 
124 Ibid. 
125 Merriam-Webster's Collegiate Dictionary,  p. 975 (10th ed. 2001). 
126 New Shorter Oxford English Dictionary,  p. 829 (1993). 
127 Merriam-Webster's Collegiate Dictionary,  p. 386 (10th ed. 2001). 
128 New Shorter Oxford English Dictionary,  p. 3000 (1993). 
129 Merriam-Webster's Collegiate Dictionary,  p. 1134 (10th ed. 2001). 
130 The United States notes that, for example, eight  European Members specifically excluded gambling 
from 10.D.  They are Austria, Croatia, the EC, Finland, Lithuania, Slovenia, and Sweden.  A few other 
Members, such as Australia and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, limited 
their commitments to CPC headings unrelated to gambling. 
131 The United States notes that Bulgaria excludes ga mbling from sector 10.A entertainment services.  
Lithuania, in addition to excluding gambling from 10.D,  also scheduled a restriction on gambling under 10.A. 
132 Egypt, Indonesia, Jordan, and Peru exclude or restrict gambling activities under the tourism sector. 
133 Senegal. 
134 Iceland and Senegal.  WT/DS285/R 
 Page 23 
 
 
gambling services elsewhere in sector 10 (and still assuming arguendo  that such services belong 
somewhere in that sector), the United States coul d only have a commitment for gambling services if it 
had scheduled the 10.E residual category.  By not doing so, the United States made no commitment for gambling services.  Thus, in the event that th e Panel addresses the issue of whether the United 
States has recorded a commitment for cross-border gambling services in its GATS schedule, the Panel 
should find that Antigua has failed to prove that gambling services are covered under 10.D, 10.A, or 
any other commitment inscribed in the US Schedule .  This finding would be consistent with the 
finding by the Appellate Body in EC – Computer Equipment  that the burden of clarifying a schedule 
does not lie on the importing Member; rather "cla rification ... that may be required during the 
negotiations is a task for all interested parties."
135 
3.47 The United States also points out that the US  Schedule of Specific Commitments does not 
apply to measures of Guam, Puerto Rico and the US Virgin Islands challenged by Antigua.  The 
United States is defined in the text of the US Schedule as "encompassing the 50 states of the United States, plus the District of Columbia."
136  Guam, Puerto Rico and the US Virgin Islands are not part of 
the 50 states and the District of Columbia.  As a result, commitments in the US Schedule do not apply 
to measures of Guam, Puerto Rico and the US Virgin Islands. 
3.48 Antigua  replies that the arguments and evidence it pr eviously put forward, as well as the third 
party submissions of the European Communities, Cana da and Japan make it very clear that the United 
States has, in sub-sector 10.D of its Schedule – interpreted with the assistance of the W/120 – made full mode 1 and mode 2 market access and national treatment commitments with respect to gambling 
and betting services.  It is absurd for the United St ates to suggest that WTO Members abandon W/120 
as well as the CPC in favour of dictionary refe rences when interpreting the schedules of fellow 
Members.  Antigua wishes to reiterate that both W/1 20 and the CPC form a part of the context of the 
GATS, and it is natural that Members would turn to  them for assistance in r eading schedules.  Noting 
the US argument that, during trade negotiations, it is incumbent upon exporting countries to seek clarification of the scope of the commitments o ffered by other WTO Members, Antigua argues that 
the United States' communication of 7 December 1993, circulated during the Uruguay Round to 
Members of the Group of the Negotiations on Se rvices comprises the United States' draft final 
schedule concerning initial commitments under GATS.   Paragraph 5 of the introduction to this 
document states that "[e]xcept where specifically not ed, the scope of the sectoral commitments of the 
United States corresponds to the sectoral coverage in  the Secretariat's Services Sectoral Classification 
list (MTN/GNS/W/120, dated 10 July 1991)."  Thus  the United States' negotiating partners had no 
reason to doubt that the W/120 document provides the basis for the interpretation of sub-sector 10.D 
of the US Schedule.  And, of course, fellow Members were not referred to the Merriam-Webster 
Collegiate  or any other dictionary. 
3.49 On the issue of the "ordinary meaning of the words," Antigua does not wish to revisit the 
United States argument on the dictionary definition of  "sporting," which was adequately dealt with by 
the European Communities in its third party submissi on.  With regard to the ordinary meaning of 
"recreational" and "entertainment", the United States  stated that "Antigua has not explained why it 
thinks gambling services should fall within the "ordin ary meaning" of those terms."  However, as 
pointed out by the European Comm unities, even the dictionary definitions the United States itself 
quotes for these words would cover gambling and betti ng services.  In this context, Antigua also 
refers to the NGISC Final Report, the first sentence of  which states that "[T]oday the vast majority of 
Americans (…) gamble recreationally and experience no measurable side effects related to their 
gambling (…)".
137  To the same effect, the first sentence of  the study on pathological gambling by the 
United States National Research Council states that "[G]ambling in America has deep cultural roots 
                                                      
135 Appellate Body Report on EC – Computer Equipment,  para. 110 (original emphasis). 
136 GATS/SC/90, p. 1. 
137 NGISC Final Report (18 June 1999), p. 1-1. WT/DS285/R 
Page 24  
 
and exists today as a widely available a nd socially accepted recreational activity."
138  Further, on page 
2 of this same study, it is stated that "[P]athological gambling differs from the recreational or social gambling of most adults, who view it as a form of entertainment and wager only small amounts."
139  
Throughout these two reports gambling is consistently referred to as "recreation" or "entertainment."  
Finally, Antigua would also like to point out th at although the United States tries to claim that 
gambling and betting services are covered by sub-sector 10.E of US Schedule – in which it has made 
no commitments – the United States fails to note th at the concordance table produced by the USITC 
includes, immediately following the heading "E. Other" a parenthetical containing the words "No corresponding CPC."  And, of course, gambling and betting services clearly have their own CPC – preventing sub-sector 10.E from being the location of the United States' putative lack of commitments 
in the gambling and betting sector. 
3.50 The United States  notes that Uruguay Round negotiators ma de the GATS very broad;  almost 
all services are within its scope.  At the same time, the GATS negotiators explicitly preserved the 
right of Members to regulate services, subject to their specific commitments and obligations.  Antigua's substantive challenge in this case is to prove that the United St ates has made a commitment 
that includes gambling.  But beyond that, Antigua must  then grapple with the fact that even assuming 
the existence of a commitment, Members remain fr ee to regulate services, even to the extent of 
declaring particular activities to be illegal, so long as they do so in a manner consistent with their 
GATS commitments and obligations. 
3.51 The United States notes that all parties to this  dispute agree that the GATS schedules are an 
integral part of the treaty; they must be interpre ted according to the customary international rules of 
treaty interpretation as reflected in Articles 31 and 32 of the Vienna Convention.  Starting with the 
ordinary meaning of the terms, the terms of the US Schedule indisputably say nothing about gambling as such – neither the word "gambling" nor any synonym  for that word appears anywhere in the text of 
the US Schedule.  This means that Antigua bears the heavy burden of proving that the United States, 
without explicitly saying so, undertook an implic it commitment covering its longstanding and deeply 
rooted system of regulations on gambling.  If the United States and its Uruguay Round negotiating 
partners had intended such a commitment on the part of the United States, es pecially on this very 
sensitive issue, the US Schedule would have said so explicitly.  Needless to say, it does not.  Antigua 
nonetheless proposes that gambling is implicit in the or dinary meaning of "other recreational services 
(except sporting)," or perhaps within "entertainme nt services."  However, the United States has shown 
that Antigua has failed to prove that the ordi nary meanings of the words "recreational" or 
"entertainment" encompasses gambling.  In fact, di ctionary definitions point  to a very different 
conclusion.  Of the three key terms at issue here, "recreational," "entertainment," and "sporting," the 
only one that dictionaries associate with gambling is "sporting."  And the US Schedule explicitly 
excludes sporting. 
3.52 Customary rules of treaty interpretation further in struct the interpreter to look at the ordinary 
meaning of words "in context."  The context for th e US Schedule includes other Members' schedules.  
Accordingly, the proper context for the US Schedul e includes the fact that some Members inscribed 
references to the CPC in their schedules, while th e United States and other Members did not.  This 
makes clear that not all parties intended that their schedules refer to the CPC – and for good reason.  
The CPC was designed as a statistical device.  It was not purpose-built to serve as a nomenclature for 
binding services commitments.  It is hardly surprisi ng then that some Members, including the United 
States, preferred not to inscribe references to it.  This is not to say that the non-CPC Members have 
undertaken no commitments, nor is the United States suggesting that its obligations are defined by its 
own subjective expectations.  To the contrary, no n-CPC commitments are interpreted in exactly the 
                                                      
138 See Commission on the Social and Economic Impact of Pathological Gambling, Committee on Law 
and Justice, Commission on Behavioural and Social Scie nces and Education, Natio nal Research Council, 
Pathological Gambling:  A Critical Review , (1999), p. 1. 
139 Ibid., p. 2.  WT/DS285/R 
 Page 25 
 
 
same way as any normal term of a treaty is interprete d:  they are to be given their ordinary meaning, 
in context, and in light of the object and purpose of the treaty.  The United States notes that it has been 
suggested that the Panel should have recourse to th e CPC in this dispute because the Appellate Body 
in the EC – Computer Equipment dispute found that panels in goods disputes should have recourse to 
the Harmonized System.  This argument ignores the fact that Harmonized System numbers were an 
explicit and integral part of the schedule at issue in  EC – Computer Equipment140, while it is 
undisputed that the US Schedule makes no reference to the CPC.   
3.53 The United States is of the view that context reveals another significant fact for the 
interpretation of the US Schedule.  The Unite d States has shown that even among Members who 
generally referred to the CPC, restrictions on gamb ling were thought to belong in sectors other than 
"entertainment services" and "other recreational ser vices."  A number of assertions have been made in 
an attempt to distinguish particular schedules of other Members.  The important point is that the other schedules previously cited by the United States rev eal that Members had difficulty with this issue 
even in the presence of CPC references.  In their ab sence, Antigua has even less basis to assert that the 
United States undertook an implicit commitment for gamb ling.  Antigua must be held to its burden of 
proving where gambling does fall in the US Schedule.  Customary rules of treaty interpretation further 
instruct the interpreter to look at the ordinary m eaning of words in light of the treaty's object and 
purpose.  Two considerations about  the object and purpose of the GATS are especially relevant here.  
First, the GATS recognizes "the right of members to regulate ... the supply of services within their territories in order to meet national policy obj ectives."  Second, it provides a framework for 
"progressively higher levels of liberalization, " exemplified by the adoption of a "positive list" 
approach to scheduling.  That approach provided that Members' obligations would depend to a large 
extent upon the making of "specific" commitmen ts.  These objects and purposes of the GATS tend to 
confirm that Panels should respect a Member's d ecision to exclude CPC references from its "positive 
list" commitments.   
3.54 The United States further notes that it has been suggested that the United States either failed 
to clarify its "other recreational services (except sporting)" commitment during negotiations, or that it 
fails to prove the scope of that commitment in this dispute.  On the first issue, the Appellate Body has 
already made it clear that the importing party does not  bear the burden of clarifying its commitments.  
On the contrary, in the EC – Computer Equipment  case, the Appellate Body found that the job of 
clarifying a Member's schedule is a task for  all interested parties to achieve through negotiations.  
This Panel need only point out to  Antigua that, consistent with EC – Computer Equipment,  no panel 
may impose such a clarification on the parties post hoc  through dispute settlement rather than through 
negotiations.  On the second issue, Antigua is th e party asserting the existence of a US commitment 
for gambling services, and it alone bears the burden of proving the scope of any commitment that it 
alleges to be relevant.  This is particularly true in this case, where the text reflects a conscious choice 
by the United States not to adopt CPC references.  To throw the burden onto the United States to 
prove the negative would be nothing more than an unj ustifiable attempt to reverse the burden of proof.  
Antigua bears the burden of proof and has not sust ained its burden.  Ultimately, the only piece of 
evidence that it has to support its arguments is th e CPC.  The United States has explained that the 
CPC is negotiating history, not context.  And in the view of other negotiating history recording the 
intent of the parties not to be bound by the CPC, or any other extra-agreement nomenclature, it is 
clear that the CPC was not intended to control the interpretation of a Member's commitments in the 
absence of an explicit reference to the CPC in a Memb er's schedule.  Without an explicit reference to 
the CPC in the US Schedule, Antigua has no viable  argument for a US commitment.  The most it can 
do is urge that, based on plain meaning, gambling somehow relates to recreation; that it somehow 
relates to entertainment; and that the Panel should th erefore look for a way to fit it into the US sector 
10 commitments, notwithstanding the "sporting" excep tion.  As the United States already pointed out, 
at best that argument would lead to the conclusi on that gambling services fall in a sub-sector 10.E 
"other" category, which the United States chose not to inscribe in its schedule.  At the end of the day, 
                                                      
140 Panel Report on EC – Computer Equipment , paras. 2.10 and 2.15. WT/DS285/R 
Page 26  
 
what Antigua really wants is for this Panel to validate Antigua's subjective position that the US 
Schedule should be read as if it referred to th e CPC, even though it clearly does not.  The Panel 
should decline this invitation, particularly in a c ontext where the text of the US Schedule provides no 
evidence of a specific intention of the parties to  incorporate a commitment in the sensitive area of 
cross-border gambling services.   
3.55 According to the United States, Antigua and the third parties  are expending a great deal of 
rhetorical energy in an effort to seek to modi fy the text of the US Schedule through dispute 
settlement.  They would like very much through this process to write in references to the CPC where 
none currently exist in the US Schedule.  There is more than a little irony to this, because some of 
those same parties are right now asking us to do exac tly the same thing in negotiations.  That, in fact, 
is the proper forum for that effort, and it is the only proper forum.  The dispute settlement system is 
specifically proscribed from adding to or diminishing the rights and obligations of Members.  On this 
point, the Appellate Body in EC–Computer Equipment has already given us an unambiguous answer.  
The task of clarifying commitments in a GATS schedule, like the tariff schedule in EC–Computer 
Equipment , is one for all interested parties to achie ve through negotiations.  The US Schedule – 
without CPC references – is an integral part of the Agreement as accepted by all WTO Members.  
That Schedule, and not the schedule others would have liked, sets forth US commitments.  And that 
schedule, like other WTO provisions, must be inte rpreted based on its ordinary meaning, in its 
context, and in light of the Agreement's object and purpose. 
3.56 The United States further argues that Antigua's  reliance on the CPC Prov. as the basis for a 
US commitment is misplaced.  Members have une quivocally acknowledged the fact that the CPC 
does not define commitments made in a schedule that  does not refer to the CPC.  For example, this 
was repeatedly confirmed during a 1998 discussi on in the Committee on Specific Commitments.
141  
The Secretariat's Note recording that discussion recounts th e following statement by the United 
States: 
"Time and resources should not be spent in exhaustive study of the CPC, which was 
inadequate not only for financial services and telecoms but more generally.  That 
explained why some countries had chosen not to use the CPC as the basis for scheduling and why scheduling in some sectors had been done on a sui generis  basis. 
... Attention should focus on the improvement  of W/120.  Delegations should indicate 
which sectors seem to them poorly defined in W/120 or elsewhere and the Committee 
should work on an understanding to improve these definitions."
142  
3.57 No Member expressed disagreement with the US premise that "some countries had chosen 
not to use the CPC."  In fact, the European Comm unities agreed that "[d]issatisfaction with [CPC] 
descriptions was certainly one of the reasons why certain Members had chosen not to use the CPC as 
the basis for their schedules."143  In the same discussion, Hong Kong  confirmed that "[t]he provisional 
CPC was merely an individual option for members."144  In sharp contrast to its position as a third 
party in the present dispute, the European Comm unities did not then assert that non-CPC schedules 
should be read according to the CPC (and thus in de fiance of the intent of the parties).  On the 
contrary, the European Communities stated that "[ w]hen a schedule made no reference to the CPC, 
the interpretation of the extent of commitments was difficult.145  In making this suggestion, the 
European Communities was acknowledging what the Un ited States has argued from the outset of this 
                                                      
141 Committee on Specific Commitments, Report of the Meeting Held on 2 April 1998 , Note by the 
Secretariat, S/CSC/M/5 (6 May 1998). 
142 Ibid., para. 4. 
143 Ibid., para. 6. 
144 Ibid., para. 10. 
145 Ibid.  The United States notes that there was no mandatory requirement to take any such steps 
during or after the Uruguay Round negotiations.  WT/DS285/R 
 Page 27 
 
 
dispute – that the CPC does not control the interpre tation of the schedule of a Member that chose not 
to refer to it.  
3.58 These statements all confirm the basic premises of the US position on this issue – i.e ., that a 
Member scheduling GATS commitments during the Uruguay Round  was free to choose or not to 
choose to inscribe references to th e CPC descriptions; that the result of not choosing to inscribe such 
references is that the CPC does not control the inte rpretation of that Member's commitment; and that 
any elaboration that may be desired by another Me mber must be achieved through negotiations, not 
through dispute settlement.  In light of these cons iderations, to now read the US Schedule according 
to the CPC would only improperly "add to or dimi nish the ... obligations provided in the covered 
agreements," in direct contravention of Article 3 of the DSU .  It should come as no surprise that the 
United States did not schedule commitments for gambling services, given the overriding policy 
concerns surrounding those services, which are refl ected in the extremely strict limitations and 
regulation of these services.  The United States wi ll further discuss those policy concerns in its 
arguments on GATS Article XIV (see below, section III. B.8).  In fact, in view of those concerns, and 
the numerous bans or restrictions and strict contro ls on gambling, it would be surprising to find that 
the United States did schedule such a commitment. 
3.59 Antigua  submits that what the United States appear s to have fallen back to are three, non-
technical issues.  First, the United States would like the Panel to read the general GATS scheduling 
methodology essentially in reverse – that is, unless a service sub-sector is expressly mentioned in a schedule, then it is ipso facto excluded.  But that is not the case. The schedules of the Members are all 
organized around the concept of services sectors, with the understanding that once a particular service 
sector is listed in a schedule, then all its sub-sectors are also covered unless the Member clearly limits 
its commitment in relation to one or more of these sub-sectors.  If a Member wanted to exclude an entire sector, it could either expressly say so or simply leave that sector off its schedule.  However, the 
schedules of the Members may differ in one way or another, all schedules are consistent with this 
approach.  Therefore, either gambling and betting services are expressly (or at least clearly) excluded 
by the United States in its schedule or they are commi tted to.  Together with the third parties, Antigua 
has made a compelling case for the inclusion of gambling and betting services in sub-sector 10.D of the US Schedule.  Secondly, contrary to the asserti on made by the United States, Antigua is not trying 
to "force" the CPC on the United States and its GATS schedule.  But Antigua considers it is appropriate that the W/l20 document and the CPC be  used in the interpretation of the US Schedule 
under concepts of international law – and not the least because the USITC has expressly instructed us 
to do so in a public document. 
3.60 For Antigua, the third defence of the United Stat es seems to be the concept that, regardless of 
what its Schedule might say (or might be interprete d to say) the United States simply would not have 
made a commitment in the field of gambling servic es.  At the outset, Antigua agrees with the United 
States when it said to the panel in Mexico – Telecommunications (emphasis added):
146 
"To begin, the United States considers that whether or not Mexico was 'freezing' the 
level of market access prevailing at the tim e of the negotiations is irrelevant; the 
ordinary meaning of Mexico's Schedule speaks for itself and should control. The 
extent of a Member's commitments cannot depend upon what it alleges to have 
intended at the time of the negotiations. The ordinary meaning of Mexico's Schedule 
instead dictates its commitments. " 
3.61 In Antigua's view, WTO jurisprudence is in ag reement with the United States' position in the 
Telmex dispute.  The fact that the United States made its  commitment "unintentionally" is not relevant 
for the interpretation of its Schedule.  As the Appellate Body pointed out in EC – Computer 
                                                      
146 Second written submission of the Unites States of America, Mexico – Measures Affecting 
Telecommunications Services , WT/DS204 (5 February 2003), para. 20. WT/DS285/R 
Page 28  
 
Equipment , in relation to a GATT schedule, schedules are an integral part of WTO law and need to be 
interpreted on the basis of Article 31 of the Vienna  Convention – the purpose of which is to ascertain 
the common intentions of the parties.  Accord ing to the Appellate Body "[t]hese common intentions 
cannot be ascertained on the basis of the subjec tive and unilaterally determined 'expectations' of  one 
of the parties to a treaty."
147  Antigua also cannot believe that the United States in particular would 
have made any  commitment "unintentionally" and that, dur ing the negotiations on its Schedule, the 
United States did not realize that the only proper in terpretation of the scope of its sub-sector 10.D is 
that it covers gambling and betting services.  As both Antigua and the EC pointed out, quite a few 
countries, including many with considerably fewe r available resources than the United States, were 
able to recognize where gambling and betting commitm ents might be made and to expressly exclude 
these services from their schedules.  Antigua may speculate about why the United States may have 
made full commitments in this area, although the reas on, if any, is legally irrelevant.  But the most 
plausible reason is that the United States, as the main advocate of the GATS and in an attempt to 
convince developing countries to open their services markets, made commitments in all sectors where 
it did not perceive an immediate competitive threat. 
3.62 Finally, Antigua rejects the United St ates' dictionary-based arguments.  The New Shorter 
Oxford Dictionary  provides differences for the use of "sporting" as a verbal noun and "sporting" as an 
adjective.  As a verbal noun it means "the action of  sport" and "participatio n in sport; amusement, 
recreation."  According to the dictionary it is used in combinations with other words in the sense of 
"concerned with."  This is of course precisely the ty pe of usage one can expect in a classification such 
as W/120 or the US Schedule referring to "sporting ser vices."  Indeed, this is how the word "sporting" 
is used in the United States' own NAICS.  As an adjective it means "sportive;  playful," "engaged in 
sport or play," "interested in or concerned in sport" or, in more colloquial and ironic language 
"designating an inferior sportsman or a person in terested in sport from purely mercenary motives. 
Now esp. pertaining to be interested in  betting or gambling. Chiefly in sporting man."  It is clear on 
the face of these definitions that "sporting" is not no rmally used as an adjective in relation to a word 
such as "services."  The Panel should also note that according to the United States, the term "sporting" 
does not only refer to gambling but, as stated in it s response to the Panel's question 8, the term 
"sporting" also covers "other (non-gambling) forms of sporting."  Thus, rather than arguing that 
"sporting" should be given its ordinary meaning, th e United States submits that "sporting" should be 
given all  the meanings that can be found in a dictionary.  In this case this would include:  (i) services 
concerned with sport;  (ii) prostitution;  (iii) ser vices related to the spontaneous producing by a plant 
of an abnormal form or variety;  (iv) services related to gambling;  and (v) services relating to the 
taking of risks.  Even if it is true that dicti onaries mention all these divergent meanings, the term 
"sporting" cannot simultaneously have all of these diffe rent meanings in a document if it is used just 
once. 
3.63 The United States  notes that both parties disagree as to whether the United States has made a 
commitment, but appear to agree that the US commitm ents are part of the text of the GATS, and thus 
the issue is one of treaty interpretation.  As a ma tter of ordinary meaning,  Antigua has argued that 
gambling services are both "other recreational services" and "entertainment services."  The United States has already discussed the ordinary meaning of  these terms, and Antigua's arguments to date 
only confirm the US view that gambling services do not fit properly within the plain meaning of either 
category.  Some sources may refer to gambling casually as "entertainment" or "recreation," yet 
gambling services also involve considerations of fina ncial gain and other considerations not typically 
associated with recreational or entertainment servi ces.  Indeed, the Solicitor General of Antigua has 
himself described remote gambling servi ce suppliers as "financial institutions."
148  All of this taken 
together indicates that this sui generis  service at most belongs in the residual "E. Other" sub-sector, 
where the United States made no commitment. 
                                                      
147 Appellate Body Report on EC – Computer Equipment , para. 84 (original emphasis). 
148 Canadian Broadcasting Corporation, "The Big Gamble," broadcast on The Fifth Estate, 
31 October 2001.  WT/DS285/R 
 Page 29 
 
 
3.64 Additionally, focusing on "other recreational ser vices," the ordinary meaning of the "except 
sporting" notation in the US Schedule confirms that the United States has made no commitment for 
gambling under 10.D "other recreational services (except sporting)."  In response to the US point that 
the ordinary meaning of "sporting" includes gambling, Antigua has referred solely to the arguments of 
a third party to this dispute, the European Co mmunities.  The United States would like to note, 
however that, first, the EC states that "sporting" is not "commonly used" to refer to gambling.  But it 
provides no evidence to support that assertion; i ndeed, a stack of dictionaries would seem to 
contradict it.  Second, the EC states that the u se of "sporting" in the sense of gambling refers to 
persons rather than services.  If "sporting" means gambling when used to describe the consumer or 
supplier, it could hardly be said to lose that meani ng entirely in reference to the service they consume 
or supply.  Other dictionary definitions provided by  the United States imply no such limitation.  Third, 
the EC states that the use of "sporting" in referenc e to gambling is referred to in one dictionary as an 
"Americanism," and therefore not within the "ordinary meaning" of a term used in the US Schedule of 
specific commitments.  The New Shorter Oxford English Dictionary,  which is usually scrupulous in 
such matters, places no such qualification on the use of sporting to refer to gambling.  And, all 
linguistic prejudices aside, no rule of treaty interpre tation provides that the "ordinary meaning" of a 
word in the English language cannot originate in th e United States.  Indeed, the fact that the schedule 
at issue is that of the United States makes it all the more absurd to exclude any meaning a priori  on 
the basis that one dictionary calls it an "Americanism."  The United States therefore submits once again that the ordinary meaning of the term "sporting" includes gambling services. 
3.65 The United States notes that, against the US argum ents based on ordinary meaning, Antigua 
offers an interpretation based on th e CPC.  In this regard, the United States submits that the text of the 
US Schedule, viewed in context, shows an affirma tive choice on the part of the United States not to 
refer to the CPC.  The negotiating history confirms that parties following W/120 did not intend to be bound by the CPC or any other nomenclature ab sent explicit references to such nomenclature.
149  The 
EC itself has subsequently confirmed that  "[d]issatisfaction with [CPC] descriptions was certainly one 
of the reasons why certain Members had chosen  not to use the CPC as the basis for their 
schedules."150  This statement by the EC undermines the credibility of assertions in the present dispute 
that Members are somehow bound by the CPC notwithstanding having chosen not to use it.  Seeking another way to make the CPC binding on the United States, Antigua has seized on the USITC Document.  Should this document state – contrary to  the fact – that "the United States has no GATS 
commitment for gambling services", it would have no  interpretive value in a WTO dispute settlement 
proceeding.  A Member may not unilaterally adop t a multilaterally binding interpretation of any 
provision of a WTO agreement, and such statem ents by themselves do not constitute subsequent 
practice under the customary international rules of treaty interpretation as embodied in Article 31 of 
the Vienna Convention.  In any event, the USITC Document makes it clear that the Document is not 
purporting to interpret the US Schedule.  The docum ent itself confirms that the USITC has only been 
delegated the responsibility to undertake ministerial duties – to "maintain" and "compile" the US 
Schedule, not to interpret the US Schedule on behalf  of the US Government.  Indeed, given that a 
Member may not unilaterally adopt a multilaterally binding interpretation of any provision of a WTO 
agreement, a delegation of unila teral interpretive authority woul d make no sense with respect to 
provisions of the WTO agreements. 
3.66 The United States notes that a third party has asserted that the USITC Document may have 
probative value for the "purpose of throwing light on a disputed question of fact."
151  This statement 
might be correct if the issue under discussion were factua l in nature.  It is not.  The issue here is the 
legal interpretation of an annex to the GATS pursuant to the customary rules of treaty interpretation of 
international law – an area in which the USITC's uni lateral document carries no weight in this dispute. 
Moreover, given that this is an issue of treaty interpretation, Antigua's arguments comparing the 
                                                      
149 See above para. 3.41, footnote 115. 
150 See above para. 3.57. 
151 Canada's reply to Panel question No. 2. WT/DS285/R 
Page 30  
 
USITC Document to the US Statement of Administ rative Action (hereinafter "SAA") are off point.  
The SAA has been referenced in WTO dispute settle ment to help interpret US domestic law, not 
WTO agreements.  Antigua's various arguments for giving independent force to the USITC Document 
are untenable, but also unpersuasive for the simple  reason that obligations in a GATS schedule must 
be based on the schedule itself, not on some extrinsic, unilateral document. 
3.67 With respect to Antigua's assertions regarding the cover note to draft versions of the US 
Schedule, the United States disagrees with Antigua's  statement that the cover note was not included in 
the final US schedule annexed to the GATS "simply b ecause such a cover note is not formally part of 
a GATS schedule as it is attached to the GATS by Article XX:3."
152  Several Members included such 
notes in their schedules.  For example, Australia's schedule begins with a note stating that "[t]he 
classification of sectors is based on the 1991 provisional Central Product Classification (CPC) of the 
United Nations Statistical Office, while the ordering reflects the Services Sectoral Classification List (MTN.GNS/W/120 of 10 July 1991)".  Needless to  say, the final US Schedule includes no such 
statement.  The United States has already confirme d in this proceeding that it used W/120 for the 
ordering of the US schedule.  That is consiste nt with the note accompanying drafts of the US 
Schedule.  However, unlike Australia and a num ber of other Members, the United States never 
adopted the CPC nomenclature.  The cover note to draft US Schedules does not indicate otherwise and, as Australia's note further confirms, these were understood to be distinct issues.   
3.68 Concerning the 1993 and 2001 Scheduling Guidelin es, the United States argues that Antigua 
lacks any basis for its assertion that "the 2001  Scheduling Guidelines comprise a subsequent 
agreement between the parties (as per Article 31( 3) of the Vienna Convention) regarding the 
interpretation of existing schedules in the light of the 1993 Scheduling Guidelines."
153  The 2001 
document, like its 1993 predecessor, explicitly stat es that it "should not be considered as a legal 
interpretation of the GATS."  Indeed, both documents were adopted by the Council for Trade in Services, not the General Council or the Ministerial Conference, which have the "exclusive authority" 
to adopt legal interpretations of the WT O agreements under Article IX:2 of the Marrakesh Agreement 
Establishing the World Trade Organization .  Moreover, Antigua's assertion that the 1993 Scheduling 
Guidelines and W/120 are context within the meani ng of Article 31(2)(b) of the Vienna Convention 
fails for the simple reason that neither document wa s "made by one or more parties in connection with 
the conclusion of the treaty and accepted by the other pa rties as an instrument related to the treaty," as 
required under that Article.  The United States and Antigua seem to agree that these documents were 
not made by any party, and insofar as they refer to the CPC, the schedules to the GATS demonstrate 
that numerous parties accepted them only partially, or not at all, for that purpose. 
3.69 The United States considers that Antigua's argu ments on the issue of non-existence of a US 
commitment represent a series of attempts to turn the rules of treaty interpretation on their head by 
using preparatory work and other extrinsic sources,  which could never be more than secondary means 
of interpretation, to override text of the Agreement.   Antigua even goes so far as to assert that the text 
of a GATS commitment cannot diminish the interpretive value of preparatory work
154 – a statement 
that is inconsistent with the fundamental principl es of treaty interpretation.  Certainly the CPC was 
discussed in the preparatory work for the GATS.  Some Members decided to use it always.  Some 
decided to use it when it suited them.  Some decided not to use it at all.  The texts of the schedules 
reflect those choices, and show the United States to be in the third category.  Mere preparatory work 
cannot override the text in this case.  But the prep aratory work can and does confirm the US reading 
of the text in regard to the CPC.  Specifica lly, it shows that the United States and other Members 
spoke explicitly of their desire that Members not be bound by any particular nomenclature.  Finally, 
the United States reiterates that if some Members would prefer that all schedules be read according to 
                                                      
152 Antigua's reply to Panel question No. 3. 
153 Antigua's reply to Panel question No. 1. 
154 Ibid.  WT/DS285/R 
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the CPC, that is a matter for negotiations rather th an dispute settlement.  The Appellate Body report in 
EC – Computer Equipment  confirms that principle. 
3.70 The United States further notes that An tigua quoted the US argument in Mexico – Telecom  
that "the ordinary meaning of Mexico's Schedule sp eaks of itself and should control."  That statement 
applies equally to the US Schedule – its ordinary meaning speaks for itself and should control.  That 
ordinary meaning does not include gambling services, and does not include references to the CPC.  
The same text-based approach applies equally to sect ors that were not inscribed in the US Schedule, 
such as 10.E "Other."  Notwithstanding Antigua's ar guments to the contrary, the United States cannot 
be found to have made a commitment in sub-sect or 10.E when it has declined to inscribe that 
sub-sector while simultaneously inscribing other sub-sectors under sector 10.  Moreover, in 
paragraph 3.62, Antigua appears to concede that th e definition of "sporting" includes gambling.  It 
argues, however, that this meaning is somehow not correct, apparently because Antigua intuits, 
without any basis, that "sporting" in the US Schedu le is a gerund (or "verbal noun") rather than an 
adjective.  Moreover, according to Antigua, a word  used only once in a document can only have one 
meaning, and in this case that meaning cannot encomp ass gambling.  In the view of the United States, 
these unfounded assumptions represent nothing more than  an attempt to artificially limit the ordinary 
meaning of "sporting." 
3. The measure(s) at issue155 
3.71 Antigua  argues that, in its request for the establishment of a panel submitted to the WTO on 
13 June 2003, the government of Antigua attached an Annex in which it listed a large number of US 
federal and state statutes that adversely affect th e ability of Antiguan service suppliers to provide 
cross-border gambling and betting services to consum ers in the United States.  The Annex also 
included references to a number of illustrative acti ons by US federal and state authorities that also 
constitute measures that inhibit the provision of  cross-border gambling and betting services into the 
United States.  During the consultations as well as in meetings of the DSB, the United States 
expressed itself confused by the nature, extent a nd impact of the measures cited in the Annex.  
Antigua believes these expressions of confusion to be  merely a "red herring" – not only is the United 
States better positioned than Antigua to coherently construe its own laws, but crucially the United 
States has unambiguously stated in the context of th is dispute that the provision by Antiguan service 
suppliers of cross-border gambling and betting ser vices into the United States is illegal under United 
States law.  Under such circumstances, the Unite d States should not be allowed to in essence "hide 
behind" the complexity and opacity of its own legal structure to deflect attention from the 
fundamental simplicity of this complaint. 
3.72 The rules applying to the cross-border suppl y of gambling and betting services in the United 
States are complex and comprise a mixture of state and federal law the precise meaning of which is often unclear.  The debate on the interpretation of these rules has often been conducted in terms of the 
legality of "Internet gambling" (because the Internet  has become one of the main tools to supply 
gambling and betting services on a cross-border basis).  A recent report by the United States General 
Accounting Office (hereinafter, "GAO") describes th e legal framework for Internet gambling in the 
United States as "complex".
156 The GAO further summarises the legal framework in the United States 
as follows: 
"Both federal and state laws apply to Inte rnet gambling in the United States.  In 
general, gambling is a matter of state la w, with each state determining whether 
individuals can gamble within its borders  and whether gaming businesses can legally 
operate there.  Since Internet gambling typically occurs through interstate or 
                                                      
155 In addition to the arguments presented here, see also  parties' replies to Panel question Nos. 9-14 and 
32-36 in Annex C of this Report. 
156 GAO Report, p. 3. WT/DS285/R 
Page 32  
 
international means, with a Web site located  in one state or country and the gambler 
in another, federal law is used to protect the states from having their laws circumvented.  To date, the Wire Act
157 is the federal statute that has been used to 
prosecute federal Internet gambling cases,  although courts sometimes disagree on the 
applicability of certain provisions of the statute.  In addition, the Travel Act158 and the 
Illegal Gambling Business Act159 have been used to pro secute gambling entities that 
take interstate or internat ional bets over the telephone a nd would likely be applicable 
to Internet gambling activity.  Some states have taken specific legislative actions to 
address Internet gambling, in some cases criminalizing it and in others relying on existing gambling laws to bring actions ag ainst entities engaging in or facilitating 
Internet gambling."
160 
3.73 The GAO Report directly addressed some of the ambiguities in US law on this issue.161  Some 
of these ambiguities are discussed more extensively in a report prepared by Mr. Jeffrey R. Rodefer 
from the Department of Justice of the State of Nevada.162  This complexity and ambiguity as well as 
the overlap between federal law and the laws of th e more than 50 states and territories makes it very 
difficult to identify with complete precision all laws and regulations of the United States that could be 
applied in the prohibition of the cross-border supply of gambling and betting services.   
3.74 Antigua submits that the existence of a complete prohibition is not in dispute.  In the context 
of this dispute, the United States government has stated that the provision of cross-border gambling 
and betting services (into the United States from abroad ) is always unlawful in the entire territory of 
the United States and under whatever form.163  Antigua accepts this prem ise for the purpose of this 
dispute settlement procedure.  Consequently there is  no need to conduct a debate on the precise scope 
of specific United States laws and regulations.  The s ubject of this dispute is the total prohibition on 
the cross-border supply of gambling and betting services  – and the parties are in agreement as to the 
existence of that total prohibition.  The precise way in which this import ban is cons tructed under 
United States law should not affect the outcome of this proceeding.   
3.75 Antigua submits that, to facilitate the legal di scussion, it has made a distinction between two 
broad types of measures: (i) those which act to pr ohibit the offering of gambling and betting services 
per se  and (ii) those restricting international money transfers and payments relating to gambling and 
betting services. While the former include statutes criminalising the provision of the services (such as those used by the United States in 2000 to prosecu te and imprison a licensed Antiguan operator), the 
latter category comprises enforcement measures, such as the actions by the Attorney General of New 
York against Paypal, Inc., a company that provides Internet payment services.
164  The two categories 
                                                      
157 Transmission of Wagering Information, 18 U.S.C. §1084, (hereinafter, "Wire Act"). 
158 Interstate or Foreign Travel or Transportation in Aid of Racketeering Enterprises, 18 U.S.C. §1952, 
(hereinafter "Travel Act"). 
159 Prohibition of Illegal Gambling Business, 18 U.S.C. §1955, (hereinafter, "Illegal Gambling 
Business Act"). 
160 GAO Report, p. 11.   
161 Ibid., pp. 12-17. 
162 Jeffrey R. Rodefer, "Internet Gambling in Nevada. Overview of Federal Law Affecting Assembly 
Bill 466" published on 18 March 20 03 on the website of the Department of Justice of Nevada 
(www.ag.state.nv.us). 
163 See, e.g., the statement of the United States' re presentative at the DSB meeting of 24 June 2003: 
"[…] the United States had made it clear that cross-bo rder gambling and betting services were prohibited under 
US law." (WT/DSB/M/151, p. 11). 
164 Press Release by the New York Attorney Genera l, dated 21 August 2002 and the "Assurance of 
Discontinuance" signed between the New York Attorney General and Paypal, Inc. dated 16 August 2002.  The New York Attorney General started an inquiry against Paypal because it provided payment services to 
companies that supply gambling and betting services to persons resident in New York without being expressly 
authorized to do so under New York law.  Because, in the opinion of the Attorney General, this supply of  WT/DS285/R 
 Page 33 
 
 
of measures identified by Antigua are not two rigidly distinct categories.  In fact, the measures in the 
second category of payment-related measures are actions by law enforcement authorities based on the legislative measures in the first category (and are th erefore a practical manifestation of the measures 
in that first category).  The only reason why the dis tinction is made is to facilitate the discussion on 
the application of specific provisions of the GATS to the facts of this dispute. 
3.76 Antigua argues that Article 6.2 of the DSU provi des that a request for the establishment of a 
panel shall "identify the specific measures at issue."  The Appellate Body has repeatedly stated that 
there are two reasons why a Panel request must be pr ecise.  First, it forms the basis for the terms of 
reference which define the scope of the dispute.  Second, it serves the due process  objective of 
notifying the defendant and the third parties of the complainant's case.
165  The complexity of the 
United States' legislation has made it relativel y difficult for Antigua to "identify the specific 
measures" (despite the obvious simplicity of the ef fect of the United States total prohibition).  To 
avoid misunderstanding and procedural difficulties Antigua adopted the following approach in its 
Panel request:  Section I and Section II of the A nnex attached to the Panel request list specific 
references to United States laws (at both the federa l and the state level) that Antigua believed could 
reasonably be construed as adversely impacting the cross-border supply of gambling and betting 
services; and Section III of the Annex provides examples of non-legislative measures, such as court decisions, criminal prosecutions or statements and ac tions by state Attorneys General, that apply some 
of these laws to the cross-border supply of gambling and betting services.  This approach was clearly 
explained in the Panel request and, for the avoi dance of doubt, it was added that "[T]he measures 
listed in the Annex only come within the scope of this dispute to the extent that these measures 
prevent or can prevent operators from Antigua and Barbuda from lawfully offering gambling and 
betting services in the United States under conditions of competition compatible with the United States' obligations."
166  Further Antigua explicitly stated in the Panel request that: "[a]lthough this is 
not always clear on the face of the text of these laws , relevant United States authorities take the view 
that these laws (separately or in combination) ha ve the effect of prohibiting all supply of gambling 
and betting services from outside the United States to consumers in the United States."  In the 
circumstances Antigua has used its best endeavours to "identify the specific measures at issue" and 
submits that it has done more than could reasonabl y be required from a complainant by conducting a 
detailed investigation of an arcan e area of law of the United States (and by attempting to provide 
examples of legislation and other measures that adversely impact on Antiguan service suppliers). 
Clearly, given that United States itself has stated that the offering of gambling and betting services 
into the United States from Antigua is unlawful in every instance, the United States has been given 
fair notice of Antigua's claim.   
3.77 Antigua notes that at the DSB meeting of  24 June 2003, the United States representative 
mentioned three procedural concerns with the Pane l request of Antigua: (i) the Annex to Antigua's 
Panel request contained items that  "did not constitute 'measures' that could properly be included 
within the scope of a Panel request"; (ii) the Anne x to the Panel request "included several measures 
which appeared not to have been included in the 1 April 2003 consu ltation request"; and (iii) "not all 
of the measures cited in the Annex were related to cross-border gambling and betting."  The United 
States' first apparent concern that some of the US  measures listed in the Annex to the Panel request 
are not "measures" presumably relates to the matters  listed in Section III of the Annex (which lists 
                                                                                                                                                                     
gaming services is illegal under New York and United States federal law it would therefore also be illegal for 
Paypal to provide Internet payment services to businesses offering these unauthorized gaming services.  The 
matter was settled when Paypal agreed to cease proce ssing payments for such gaming companies and pay the 
sum of US $200,000. Other examples of such measures are provided by the New York  Attorney General's press 
releases of 14 June 2002 and 11 February 2003 announci ng similar settlements with 11 banks that provide credit 
card services.  
165 For instance, Appellate Body Reports on EC – Bananas III , para. 142, and US – Carbon Steel , 
para. 126. 
166 WT/DS285/2, 2nd paragraph, last sentence. WT/DS285/R 
Page 34  
 
court decisions and statements of law enforcement and administrative agencies either taking or explaining actions against cross-border gaming services). However, the measures listed in Section III of the Annex to the Panel request clearly are "m easures" within the meaning of the GATS.  The 
United States entities that have taken these measures  include the United States Second Circuit Court 
of Appeals, the Supreme Court of the State of Ne w York, the Gaming Control Board of Michigan and 
the Attorneys General of the States of Florida, Minnesota and New York.  The measures listed in 
Section III of the Annex to the Panel request come  within the meaning of "measure" specified in 
Article XXVIII(a) of the GATS as either "procedure,  decision, administrative action or any other 
form" taken by "central, regional or local governments and authorities."
167  Further, the measures 
described in Section III of the Annex are based upon or arise out of a number of the statutory 
provisions listed in Sections I and II of the Annex and are therefore in any event caught by the GATS 
in that capacity. 
3.78 Antigua notes that the United States' second stat ed concern relates to measures that "appeared 
not to have been included" in the consultation requ est of Antigua.  There are a number of differences 
between the list of measures annexed to the consu ltation request and the list of measures annexed to 
the Panel request.  The main difference between th e two is that the Annex to the Panel request 
contains considerably fewer measures than the Anne x to the consultation request.  The United States 
suggests, however, that certain measures were adde d in the Annex to the Panel request that do not 
appear in the consultation request.  Presumably the United States' concern is related to three 
references that contained typographical errors in the Annex to the consulta tion request, which were 
corrected in the Annex to the Panel request. These ar e the following (with the differences underlined): 
 Incorrect reference in consultation 
request Correct reference in Panel request 
Colo. Rev. Stat. §§ 18-10-101 to 18-10-08 (1999) §§ 18-10-101 to 18-10-108 (1999) 
New York 
Constitution art. II, § 9 art. I, § 9 
Rhode Island 
Constitution art. I, § 22 art. VI, § 22 
 
3.79 The request for consultations (and the addendum thereto) submitted by Antigua made it clear 
that the subject matter of this dispute is the United States' prohibition on the cross-border supply of 
gambling and betting services as it results from the application of a great number of separate laws.  In this respect it should have been clear to the United States that the se typographical errors are indeed 
nothing but typographical errors.  The reference to the Colorado statutes contained in the consultation 
request simply makes no sense and it is clear on the face of this reference that it contains an error.  
Article II, § 9 of the New York Constitution concerns  suffrage and Article I, § 22 of the Rhode Island 
Constitution concerns the right to bear arms.  Each  of the constitutional articles as corrected in the 
Annex to the Panel request concern gambling.  Here t oo, it should have been clear to the United States 
that these were mere typographical errors.  In each case,  it is difficult to believe that the United States 
could have been prejudiced by the corrections.  Furthermore, in Brazil – Aircraft  the Appellate Body 
stated that Articles 4 and 6 of the DSU do not require  "(…) a precise and exact identity between the 
specific measures that were the subject of consu ltations and the specific measures identified in the 
request for the establishment of a panel."
168  If "precise and exact identity" were to be a requirement it 
would never be possible for a complainant to obta in a more precise understanding of the other WTO 
                                                      
167 Article I:3(a) of the GATS.  See also the Appellate Body Reports on US  – Gasoline,  p. 28 and US – 
Shrimp,  para. 173, where it is stated that a Member bears responsibility for acts of all its departments of 
government, including legislative, executive and judiciary.  This concept is also clear in Article I:3(a) of the 
GATS which provides that "each Member shall take such  reasonable measures as may be available to it to 
ensure [observance of the Member's obligations and commitments] by regional and local governments and 
authorities and non-governmental bodies within its territory." 
168 Appellate Body Report on Brazil – Aircraft , para. 132.  WT/DS285/R 
 Page 35 
 
 
Member's measures during consultations – and that would undermine the effectiveness of the dispute settlement process.
169  Finally, the objectives underlying Articles 6.2 and 4.4 of the DSU170 are the 
need to define the scope of the dispute and th e due process objective of notifying the defendant and 
the third parties of the complainan t's case.  Correcting three rather obvious typing errors has certainly 
not harmed these objectives. 
3.80 The United States' third procedural concern that  not all the measures cited in the Annex are 
related to cross-border gambling and betting, is answ ered in the Panel request itself which explicitly 
states that the listed measures only come within the sc ope of this dispute to the extent that they do 
relate to cross-border gambling and betting.  If ther e are measures in the Annex that do not relate to 
cross-border gambling and betting in the way described in the Panel request, they are not within the 
scope of this dispute.  Further, Antigua believes that the key issue regarding the measures in this 
proceeding is whether or not there are measures that impede the ability  of Antigua to offer cross-
border gambling and betting services into the United States.  Logically then, if simply one of the measures listed in the Annex to the Panel request has this effect then this matter has been established, 
even if ( quod non ) the remaining scores of listed measures are irrelevant.
171 
3.81 The United States  argues that rather than providing an analysis of specific US laws as they 
relate to gambling, Antigua is asking this Panel to accept a mere assertion  as to the effect of such laws 
– that they represent a "total prohibition" on cross- border gambling – as proof that the United States is 
in violation of its WTO obligations.  The United St ates recalls the Appellate Body's observation that 
"...we find it difficult, indeed, to see how any syst em of judicial settlement could work if it 
incorporated the proposition that the mere assertion of a claim might amount to proof."172  Ignoring 
this finding, Antigua has refused to provide the Panel with the text of actual laws or regulations, and 
the reasons for why it views such laws and regulations  to be inconsistent with the GATS.  Simply put, 
Antigua has not provided evidence and argumentati on regarding specific measures at issue.  This 
approach cannot form the basis for a prima facie  case in a WTO dispute settlement proceeding.  A 
party cannot advance a prima facie  case without linking its evidence and argumentation to some 
specific measure(s), and a mere assertion is not itself a measure. 
3.82 The United States submits that, as the complainan t, Antigua bears the burden of establishing a 
prima facie  case demonstrating that the United States h as adopted specific measure(s) and that the 
measure(s) are inconsistent with obligations that  the United States has assumed as a Member of the 
WTO.  As the Appellate Body has consistently fo und, the burden of proof in WTO dispute settlement 
proceedings generally rests on the complainant, which must make out a prima facie  case by 
presenting sufficient evidence and argumentation to  create a presumption in support of its claim.173  If 
the complainant succeeds in establishing such a presumption, the respondent may rebut this 
presumption.174  Thus, a respondent's measures – such as the gambling-related measures of the United 
States at issue in this proceeding – must be treated as WTO-consiste nt until proven otherwise.175  If 
                                                      
169 According to the Appellate Body "the claims that are made and the facts that are established during 
consultations do much to shape the substance and the scope of subsequent panel proceedings." ( India – Patents 
(US) ,  para. 94).  See also the Panel Report on Brazil – Aircraft, para. 7.9. 
170 In the Preliminary Rulings in Canada – Measures relating to exports of wheat and treatment of 
imported grain, WT/DS276/12, para. 15, the Panel stated that: "( …) Article 4.4 omits the term 'specific' in 
referring to the 'measures at issue'.  We believe this di fference in language is not inadvertent and must be given 
meaning. Indeed, in our view, this difference in language supports the view that requests for consultations need 
not be as specific and as detailed as requests for establishment of a panel under Article 6.2 of the DSU." 
171 Antigua notes that this point is particularly sa lient given the agreement of the parties on the legal 
position of the United States government regarding the legality of these services.  See para. 3.74 above. 
172  Appellate Body Report on US – Wool Shirts and Blouses,  p. 14. 
173 For instance , Appellate Body Report on Canada –Dairy II, para. 66, and Appellate Body Report on 
EC–Hormones,  para. 98. 
174 Ibid.   
175 Ibid., Appellate Body Report on US – Carbon Steel , para. 157.  WT/DS285/R 
Page 36  
 
the balance of evidence is inconclusi ve with respect to a particular claim, Antigua must be found to 
have failed to establish that claim.
176 
3.83 The United States notes that Antigua claims that one or more US measure(s) are inconsistent 
with WTO treaty obligations;  Antigua therefor e bears the burden of providing evidence and 
argumentation in support of this claim.  In US – Carbon Steel , the Appellate Body found that a party 
making such a claim regarding another party's municipal law "bears the burden of introducing 
evidence as to the scope and meaning of su ch law to substantiate that assertion."177  The Appellate 
Body went on to describe the type of evidence as to  the scope and meaning of municipal law that can 
be introduced by the complaining party challenging the law of a WTO Member, stating that "[s]uch evidence will typically be produced in the form of  the text of the relevant legislation or legal 
instruments," and "may be supported, as appropriate, by  evidence of the consistent application of such 
laws, the pronouncements of domestic courts on the meaning of such laws, the opinions of legal 
experts and the writings of recognized scholars."
178   
3.84 The United States points out that, ignoring the most basic burden of proof requirements, 
Antigua goes so far as to insist that it is under no obligation to adduce eviden ce as to specific US laws 
or regulations.  Antigua is mistaken.  As the Appellate Body found in India - Patents (US),  where the 
measure alleged to be in breach took the form of domestic legislation, an examination of relevant 
provisions of such a law is essential to determ ining whether a Member has complied with its 
obligations.179  Conducting such an examination necessarily means that a panel or the Appellate Body  
"must look at  the specific provisions"  of domestic law.180  Antigua appears to agree that the "total 
prohibition" it identifies as the measu re at issue in this dispute must be actually comprised of one or 
more US laws or regula tions.  Consistent with India – Patents (US)  and US – Carbon Steel,  Antigua 
must provide the laws or regulations that it vi ews as relevant, as well as evidence and argumentation 
as to their scope and meaning.  Antigua, however, has flatly refused to say exactly which provisions it 
views as relevant.  Indeed, it has neither provided the text of, nor offered evidence or argumentation 
as to the meaning of, a single word of any US law or regulation restricting gambling.181  This 
represents a total failure of proof.   
3.85 According to the United States, Antigua mis understands the US position on this failure of 
proof, calling it an "argument that the Panel cannot i nvestigate in the aggregate the impact of a series 
of individual laws."182  In fact, panels have often examined claims based on the combined effect of 
two or more measures, but have correctly approach ed such claims by first examining each specific 
                                                      
176 For instance , Appellate Body Report on EC – Hormones, para. 109. 
177 Appellate Body Report on US – Carbon Steel,  WT/DS213/AB/R para. 157. 
178 Ibid. 
179 Appellate Body Report on India – Patents (US) , para. 66:  "It is clear th at an examination of the 
relevant aspects of Indian municipal law and, in par ticular, the relevant provisions of the Patents Act ... is 
essential to determining whether India has complied with  its obligations under Article 70.8(a).  There was 
simply no way for the Panel to make this determination without engaging in an examination of Indian law."  The Panel in US – Section 301 Trade Act , para. 7.18, applied the same principle, stating that "[w]e are ... called upon 
to establish the meaning of Sections 301-310 as factual elements and to check whet her these factual elements 
constitute conduct by the US contrary to its WTO ob ligations.  The rules on burden of proof for the 
establishment of facts ... also apply in this respect." 
180 Appellate Body Report on  India – Patents (US),  paras. 68-69 (emphasis added). 
181 The United States notes that Antigua provides a singl e discrete example in su pport of its claim that 
certain law enforcement actions applying US legislative measures are inconsistent with WTO obligations.  That 
example – the Assurance of Discontin uance between the New York Attorney  General and PayPal, Inc. – is 
among the measures in section III of the Annex to the Panel request that the Panel has declined to examine as 
"separate, autonomous measures."  In any event, the Un ited States notes that the example contains a specific 
restriction on a single company, the scope of which explicitly depends on the scope of underlying laws authorizing or restricting par ticular gambling transactions. 
182 Comments On The United States' Request For Preliminary Rulings By Antigua And Barbuda, 
submitted to the Panel on 22 October 2003, para 17.  WT/DS285/R 
 Page 37 
 
 
measure that allegedly contributes to a combined effect.183  Indeed, it would be impossible to know 
what the combined effect of various measures is as  a matter of municipal law without first examining 
how each measure works, and then analyzing how these measures interact.  The panel in US – Export 
Restraints confronted a similar claim regarding the combined  effect of several US measures.  In that 
dispute, the panel quoted the following argument by the United States: 
"It is not clear why, under the reasoning of either Canada or the United States – 
Section 301 Trade Act  panel report, the documents in th is dispute 'must' be analyzed 
together. Canada contends th at one or more of the documents in question, alone or 
together, somehow require the DOC to treat export restraints as subsidies.  However, 
the proper analysis of such a claim canno t be undertaken based upon abstract notions 
of whether documents cited by a complaini ng party 'must be analyzed together', but 
on the status of the cited documents, and how  they relate to each other, under the 
responding Member's domestic law."184  
3.86 The Panel subsequently adopted this approach.  Noting that Canada's argument related to 
measures "taken together," the panel concluded that  it would "first analyse them separately, both in 
respect of the status and the effect of each under US  domestic law, and in respect of whatever each 
says concerning export restraints."185 
3.87 Similarly, in order to examine the validity of Antigua's claim in this dispute, the Panel must 
first analyze each measure individually.  Antigua thus bears the burden of detailing precisely how 
each individual measure at issue operates under US municipal law.  Antigua then bears the further 
burden of detailing how, under US municipal law, th ese individual measures operate together to give 
rise to the cumulative effect that Antigua is  alleging inconsistent with the GATS.  The Japan – Film  
panel described this further burden.  It found that: 
"[T]o the extent that the United States claims  that various "measures" in the areas of 
distribution, promotion and large stores set in motion policies which are said to have a complementary and cumulative effect on impor ted film and paper, we consider that 
it is for the United States to provide this Panel with a detailed showing of how these 
alleged 'measures' interact with one anot her in their implementation so as to cause 
effects different from, and additional to, t hose effects which are alleged to be caused 
by each 'measure' acting individually."
186  
3.88 Therefore, Antigua's staunch refusal in this  dispute to provide evidence and argumentation 
relating to each relevant individual measure, as well as to the interaction between the measures under 
municipal law that supposedly results in Antigua's  claimed collective effect, makes it impossible for 
Antigua to credibly assert that it has sustai ned its burden of proof in this dispute. 
                                                      
183 For instance, in US – FSC,  the panel examined the effect of a series of tax exemptions "taken 
together," but did so only after first examining each individual exemption under municipal law. See  Panel 
Report on US – FSC,  paras. 7.94-7.97.  The Appellate Body went on to rely on the panel's examination of 
individual measures for purposes of its own review, thus confirming the systemic importance of a full 
examination by panels of individual measures.  See  Appellate Body Report on US – FSC, footnote 23 and paras. 
16-18.  Similarly, in Argentina – Hides and Leather,  a panel concluded that two tax resolutions "taken together" 
gave rise to an inconsistency with Article III:2 of the GATT, but not without first making an individualized 
evaluation of each resolution.  See  Panel Report on Argentina –Hides and Leather,  footnote 319 (stating that 
measures "taken together" gave rise to inconsistencies) and paras. 1.108-11.115 (evaluating each measure 
individually). 
184 Panel Report on US – Export Restraints , para. 8.83, quoting an argument made by the United States. 
185 Ibid. , para. 8.84. 
186 Panel Report on Japan – Film , para. 10.353. WT/DS285/R 
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3.89 The United States stresses that it is Antigua's  burden to provide argumentation explaining 
what aspect of specific US measure (s) in Antigua's view renders th e measure(s) inconsistent with 
specific US obligations or commitments under the GA TS.  Since Antigua has failed in all respects to 
sustain that burden, the United States cannot delve into  any specific measure in detail.  In the view of 
the United States, Antigua explicitly seeks to sh ift its burden of proof onto the United States.
187  It 
offers no basis for doing so except the complexity of  US law – an excuse that the Appellate Body has 
already rejected as a ground for allocating the burden of proof:  "There is nothing in the WTO dispute settlement system to support the notion that the allo cation of the burden of proof should be decided on 
the basis of a comparison between the respective di fficulties that may possibly be encountered by the 
complainant and the respondent in collecting information to prove a case."
188  Antigua admonished 
the Panel that the United States "should not be allowe d to in essence 'hide behind' the complexity and 
opacity of its own legal structure."  To the cont rary, the United States submits that the burden has 
always been on Antigua to come out of hiding and say what specific measures it does or does not seek 
to challenge, and then to provide evidence and ar gumentation as to each measure.  Antigua has not 
only failed to do so, it has repeatedly refused to do so. 
3.90 Antigua submits that the biggest point of contentio n in respect of the measures is whether 
Antigua and Barbuda has submitted su fficient proof that the United St ates maintains "m easures" that 
result in a complete prohibition – or a "total ban"  – on the provision of gambling and betting services 
from Antigua and Barbuda into the United States.  However, rather than ask ing the United States to 
assume any burden of proof, Antigua's very basic poi nt is that the United States has conceded this 
point of US law.  Given the clear and unambiguous concession of the United States on the complete 
prohibition – the total ban – Antigua  and Barbuda believes that there is simply no sense in proving an 
already conceded point.  In fact, under the laws of vi rtually every jurisdiction that Antigua is aware of 
(including the United States), a concession, such as th at made in this case by the United States, would 
result in a stipulation of the conceded fact or i ssue – precluding further discussion on the topic.   The 
same concept holds true in the WTO.  As noted by the European Communities189, previous panels 
accepted similar such concessions as being accurate.  Moreover, the United States has conceded this 
point to Antigua in consultations meeting on this matter, as well as in open session before the dispute 
settlement body in the context of this dispute on two occasions.  Despite its insistence that Antigua 
should prove the point, the United States refers to its prohibition.  In multiple public statements and 
position papers, the United States Department of Ju stice has unambiguously made this concession.  
And the United States clearly acts as if there is a prohibition – hence some of the actions taken by the 
United States and referenced in Section III of the A nnex to Antigua's request for consultations in this 
proceeding.  Indeed, Antigua invites the United Stat es to deny that concession before the Panel.  
Given the concession by the United States, Antigua  and Barbuda strongly believes that a detailed 
discussion of all measures on a state and federal le vel is unnecessary and would prove difficult and, 
more importantly, wasteful.  Further, consultations  between parties are intended not only to resolve 
disputes, but also to frame and refine the issues.   
3.91 Antigua notes that the United States apparen tly takes the position that a "measure" for 
purposes of WTO dispute resolution must consist of a discrete "law on the books" and that "measures" can only be a number of such discrete laws.  This is a clear misinterpretation of a well-settled area of WTO jurisprudence which has established that many  things – government policies, procedures and 
actions included – may constitute "measures."  Indeed, the GATS itself defines "measures" 
expansively in Article XXVIII(a).  Of course, if a measure were required to be a specific, discrete 
statute or regulation, Members could easily evade th e reach of the dispute settlement machinery of the 
WTO through the use of informal policies and unwritten practices without any legislation or formal rulemaking at all.  The point of the United States in this regard seems to be that the admitted "total 
                                                      
187 See above, para. 3.71, where Antigua  states that the United States is "better positioned than Antigua 
to coherently construe its own laws". 
188 Appellate Body Report on EC – Sardines , para. 281. 
189 See below para. 4.15.  WT/DS285/R 
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ban" cannot itself constitute a "measure" because it is not one discrete law.  And so, the United States 
would submit, Antigua must lead this Panel through  a muddle of discrete United States laws and piece 
together the puzzle of measures that then add up to th e sum of the total ban.  Antigua disagrees.  First, 
WTO law must not be forced to be interpreted in the light of formal characteristics of the laws of an 
individual Member.  Whether a "measure" that is  challenged under the DSU is under domestic law, 
considered to be comprised of one or more laws, rules or actions cannot therefore be definitive in 
determining whether the sum of the laws constitute  a "measure" under the DSU.  Second, while the 
United States points to a number of panel reports and Appellate Body decisi ons in which the measure-
by-measure "puzzle" was required to be assembled, it  fails to note that in each of those proceedings 
there was genuine disagreement as to the collective im pact of the various pieces of legislation.  That, 
of course, is manifestly not the case in this proceeding where Antigua and Barbuda and the United 
States both agree upon the existence of the complete prohibition.  Third, the United States tries to 
create the impression that the cumulative effect of the complete prohibition created by the mass of specific US laws flows from a complex interaction betw een these specific laws.  In reality, this is not 
the case.  Most of the measures cited in the Panel request are prohibition meas ures that could arguably 
be applied independently of each other against An tiguan gaming operators.  There are differences, 
however, in the territorial scope of the laws, as stat e laws typically only appl y or have reach within 
the territory of the state at issue.  Furthermore th ere appear to exist small differences in substantive 
scope of some of the laws.  The overall result, however, is that all cross-border supply of gambling 
and betting services from outside the United States is always caught by one (and normally several) of the United States' prohibition laws. 
3.92 Antigua argues that although the number of prohibi tion laws differs from state to state, the 
state prohibition laws all broadly follow the same pattern – all ga mbling is prohibited unless a specific 
exemption has been granted.  But while many dom estic operators have, in  one way or another, 
obtained an exemption and are therefore allowed to operate lawfully, such exemptions are not 
available to foreign operators who want to supply gambling and betting services on a cross-border 
basis.  Hence, state laws prohibit all cross-border supply of so-called "unauthorized" gambling, via the 
Internet or otherwise. The report prepared by the GAO provides a more detailed explanation of how 
the laws of five states prohibit so-called "unauthorized" Internet gambling. 
3.93 Overlaying the network of state laws are United States federal laws.  The letter dated 
11 June 2003, sent by the United States Department  of Justice to the National Association of 
Broadcasters provides a good example of how the Un ited States itself holds the opinion that several 
federal prohibition laws might apply to the same conduc t.  The letter refers to three federal statutes 
when explaining the illegality of cross-border, "rem ote access" gambling:  (i) the Wire Act, which 
prohibits gambling businesses from knowingly recei ving or sending certain types of bets or 
information that assist in placing bets over interstate  and international wires;  (ii) the Travel Act 
which imposes criminal penalties for those who utilize interstate or foreign commerce with the intent 
to distribute the proceeds of any unlawful activit y, including gambling considered unlawful in the 
United States;  (iii) the Illegal Gambling Business Act which makes it a federal crime to operate a 
gambling business that violates the law of the stat e where the gambling takes place (provided certain 
other criteria are fulfilled such as the involvement of  at least five people and an operation during more 
than 30 days).  Each of these three laws separatel y prohibits the cross-border supply of gambling and 
betting services from Antigua.  However, there is so me uncertainty about the exact scope of these 
laws.  For instance, there is debate as to whether or  not the Wire Act would also apply to the relatively 
recent wireless Internet technology or indeed whether it applies to casino-type gambling or only to sports betting.  In order to avoid these types of loopholes, United States authorities prosecute on the basis of a combination of these laws.  
3.94 
Antigua submits that it is for the similar reas on of trying to avoid loopholes that it has not 
challenged the Wire Act alone, although the Wire  Act undoubtedly seems to be the most significant 
law in the United States' prohibition arsenal.  Antigua  and Barbuda needs to ensure that, at the stage 
when the United States needs to implement any recommendations and rulings resulting from this WT/DS285/R 
Page 40  
 
proceeding, the United States cannot take the position that it needs to amend only the Wire Act and can continue to apply its other pr ohibition laws.  This is particular ly important because given the huge 
amount of American legislation on gambling and betting, it cannot be excluded that Antigua and 
Barbuda has been unable to identify all domestic laws  that could possibly be applied against the cross-
border supply of gambling services.  In this context Antigua and Barbuda submits that it is not only 
legally possible but also logical for it to challenge  the United States' total prohibition on the cross-
border supply of gambling.  Under domestic United States law this to tal prohibition is composed of 
many different prohibition laws which all have a si milar effect but which may have a different or 
slightly different territorial or substantive scope .  Taken together, however, they cover the entire 
United States and all possible supply variants of  cross-border gambling services, whether wire-based, 
wireless or otherwise.  It is important to note that, under the federal scheme of the United States and 
given the international, cross-border nature of th e services that Antigua provides, the United States 
federal government possesses the power to legislate exclusively in a manner that would both be 
binding on its states and completely resolve this di spute.  Accordingly, given that the United States 
federal government possesses the power under its Constitu tion to fashion a remedy at the federal level 
without requiring state-by-state corrective acti on, the exhausting exercise of plodding through 
hundreds of state and federal statutes becomes even more obviously wasteful and absurd. 
3.95 Antigua reiterates that contrary to the Unite d States' assertions, Antigua and Barbuda has 
never "refused" to cite or provide evidence of United States laws that together create the total ban.  In 
fact, Antigua's effort at identifying in its panel and consultations requests a huge number of American 
laws is evidence of its good faith in this endeavou r.  Despite this, even though it is wasteful and 
unnecessary in the view of Antigua to do so, Antigua  has submitted to the Panel on 8 December 2003 
the texts of all the relevant laws listed in its Pa nel request, together with brief summaries of these 
laws.  Antigua also submitted the texts of all the items listed in Section III of the Annex to its Panel 
request that had not been submitted previously.  Fina lly, Antigua believes that not much remains to be 
said about the typographical errors that were discussed  at paragraphs 3.78 and 3.80 above;  the text of 
these laws were submitted to the Panel which can verify them. 
3.96 The United States  replies that Antigua has chosen to de fine the scope of measures at issue in 
this dispute in exceedingly broad terms, and to ignor e the text and meaning of actual US laws.  It has 
rejected the US suggestion that it relate its claims  to particular measures – even to the point of 
accusing the United States of engaging in "litigation tactics."  And Antigua alone decided to withhold 
until more than two months after the date of its firs t submission the text of the very measures at issue 
in this dispute.  While the United States has some concerns about Antigua's strategy in this dispute, it 
is not its role to second-guess them.  The United St ates can only point out that Antigua has thus far 
not provided sufficient evidence and argumentation to establish its prima facie  case.  The United 
States reiterates that Antigua is apparently still asser ting a proposition about the collective effect of 
US domestic laws relating to the remote supply of  gambling, without regard to individual measures 
and how they work.  Antigua, without any basis, labels this effect a "total prohibition on the 
cross-border supply of gambling and betting services."  It asserts that, whatev er the effect of the 
measures at issue individually, in concert they necessarily give rise to an inconsistency with the 
GATS.  While Antigua claims the United States has no t conceded any ground in this dispute, Antigua 
rests its case in large part on a supposed US "con cession."  No such concession was in fact ever made. 
3.97 With respect to its burden of proof, Antigua has previously taken the position that it only 
needs to assert the alleged overall effect of US dom estic law, and that the particular causes of this 
alleged overall effect – the measures that supposedly r esult in this effect – are irrelevant.  In essence, 
Antigua wants the Panel to assume the overall effect  of US domestic law without first determining 
how the measures at issue operate and interact, and whether such interaction would in fact comprise 
the overall effect alleged by Antigua.  Antigua's asserti on that a mere allegation is all it needs to meet 
its burden of proof is wrong.  The Appellate Body has stated in its Carbon Steel  report that the burden 
of providing evidence and argumentation begins with providing the text of the measures at issue, and 
is then followed by the presentation of authorities an d arguments as to the meaning of these measures.   WT/DS285/R 
 Page 41 
 
 
The Appellate Body has also explained in India - Patents (US)  that an examination of the meaning of 
relevant provisions of domestic legislation is not ju st helpful, it is essential to determining whether a 
Member has complied with its obligations.  To bor row the Appellate Body's own phrase, a panel or 
the Appellate Body "must look at the specific provisions " of domestic law.  The same is true in this 
dispute.  As the United States has repeatedly em phasized, Antigua's notion of a total prohibition has 
no legal status under US law.  Antigua's mere asserti on that this is the effect of US law, without a 
demonstration of the alleged causes, cannot underpin a panel finding that this is  in fact the effect.  
Assumptions and assertions are not sufficient.  In order for the Panel to be able to discharge its duty to 
make an objective assessment of the collective effect  of domestic law with all its significant nuances, 
Antigua must first provide sufficient evidence and argumentation to support its view of precisely how 
each individual measure at issue operates under US domestic law.  As already noted by the United 
States, such an approach is consiste nt with that taken by the panel in US – Export Restraints  and by 
other panels.  After assessing how each individual me asure operates under US law, Antigua must then 
– given its claim of a collective effect – bear the fu rther burden of proving this collective effect.  In 
Japan – Film , the panel found that, in order to establish a claim of collective eff ect, the United States 
was required to "provide this Pa nel with a detailed showing of how these alleged 'measures' interact 
with one another in their implementation so as to cause effects different from, and additional to, those 
effects which are alleged to be caused by each 'mea sure' acting individually."  The same standard 
applies here.  Assuming that Antigua proves the me aning of individual measures, it must show their 
collective effect through evidence and argumentati on regarding how these alleged measures interact 
with one another in their implementation under US domestic law.  To borrow a phrase used by 
Antigua, Antigua must piece together the "puzzle" of its prima facie  case. 
3.98 The United States submits that, on 8 December 2003, Antigua finally gave the Panel the text 
of the laws that it alleges may or may not comprise  the US regulatory structure for remote supply of 
gambling services.  Along with the text of these laws, Antigua provided incomplete, and in some cases misleading, thumbnail sketches of what some of  the laws supposedly contain.  There are also 
texts of non-measures and other documentation that  the United States was not expecting in what 
essentially amounts to an additional submission by Antigua.  Nonetheless, a cursory analysis of Antigua's documentation (which is all the United Stat es was able to do so far given the timing of the 
submission) only further reinforces the US view that  Antigua has yet to provide sufficient evidence 
and argumentation to support its view of the meani ng of each measure at issue, how each measure is 
relevant to remote supply of gambling services, a nd finally how each measure interacts with other 
measures so as to establish Antigua's prima facie  case in this dispute.  Indeed, the sheer volume of 
Antigua's 8 December submission only further highli ghts the vastness of Antigua's unmet burden.  
Antigua has explicitly sought to shift its burden of proof onto the United States by claiming that the 
United States is in the best position to meet this burden and that the US legal system is complex.  
However, not only is Antigua's position contrary to  the well-established view of burden of proof in 
WTO dispute settlement, it is also well-established in the WTO that complexity is not a viable excuse 
for re-allocating the burden of proof.  The presump tion remains that the laws of the United States are 
consistent with the GATS unless and until Anti gua as the complainant proves otherwise. 
3.99 Antigua  replies that the United States has relie d heavily throughout this proceeding on its 
assertion that Antigua has not met its burden of proo f to establish the existence of any United States 
measures that are contrary to commitments of  the United States under the GATS.  Despite its 
unambiguous position that "cross-border gambling and betting services are prohibited under US 
law,"190 the United States has insisted that Antigua bears the "burden of proof" of otherwise 
establishing in some form this "total prohibition" and that Antigua has not done so.  Antigua, on the other hand, has consistently taken the position th at not only should the express agreement of the 
United States as to the existence of the total pr ohibition obviate the need for the provision of any 
additional "proof" that the United States indeed totally prohibits the provision of cross-border 
gambling and betting services from Antigua, but that th e conceded total prohibition in and of itself 
                                                      
190 WT/DSB/M/151, para. 47; WT/DSB/M/153, para. 47. WT/DS285/R 
Page 42  
 
constitutes a "measure" within the meaning of the GATS.  Antigua has never taken the position that 
the "burden of proof" to establish the existence of actionable measures should be "shifted" to the 
United States.  Rather, Antigua believes that there is , in essence, no burden to be shifted – the parties 
are in agreement on the scope and extent of the to tal prohibition, and this agreement has definitive 
consequences in this proceed ing under WTO jurisprudence.
191 
3.100  Antigua submits that the United States' argument  that its total prohibition is not a measure 
that can be challenged in WTO dispute settlement because it is not "something that has a 'functional life of its own' under municipal law"
192 is apparently based on the panel report in US – Corrosion-
Resistant Steel Sunset Review .  However, the Appellate Body has recently reversed the aspect of this 
panel report on which the United States relies, and f ound that a measure can be challenged even if it is 
not mandatory under municipal law:   
"As long as a Member respects the principles set forth in Articles 3.7 and 3.10 of the 
DSU, namely to exercise their 'judgement as to whether action under these procedures 
would be fruitful' and to engage in disput e settlement in good faith, then that Member 
is entitled to request a panel to examine measures that the Member considers nullify 
or impair its benefits.  We  do not think that panels are obliged, as a preliminary 
jurisdictional matter, to examine whether th e challenged measure is mandatory.  This 
issue is relevant, if at all, only as part of the panel's assessment of whether the measure is, as such, inconsistent  with particular obligations."
193 
3.101  The Appellate Body further stated that the re ference to a Member's "laws, regulations and 
administrative procedures" in Article 18.4 of the Anti-Dumping Agreement "must be determined for 
purposes of WTO law and not simply by reference to the label given to various instruments under 
domestic law of each WTO Member.  This determination must be ba sed on the content and substance 
of the instrument, and not merely on its form or nomenclature."194  A similar interpretation should, 
a fortiori , apply to the definition of measures in Articl e XXVIII(a) of the GATS which is formulated 
more broadly than the phrase used in Article 18.4 of  the Anti-Dumping Agreement that was at issue in 
US – Corrosion-Resistant Steel Sunset Review .  Antigua already argued this precise point.195 
3.102  Antigua submits that, in view of the decision of the Appellate Body in US – Corrosion-
Resistant Steel Sunset Review , it is possible to challenge a tota l prohibition that is comprised of 
numerous (i) "specific legislative and regulatory provis ions;" (ii) "application[s] of such provisions;" 
and (iii) "practice[s]."196  While the Panel needs to establish that this ban exists, it is not  necessary for 
the Panel or Antigua to establish the definitive list of (and analyzed) every law, regulation, application 
and practice that is part of the total prohibition.  The purpose of dispute settlement is to stop the 
impairment of benefits accruing unde r the covered agreements.  In the context of this proceeding, this 
means obtaining access for Antigua's gambling and betting services to the US market.  For the impairment of Antigua's GATS benefits, it does not matter how many laws make that market access 
impossible and how exactly they do it.  What matters is  that this market access is impossible, whilst it 
should be possible.  In performing its analysis, a pa nel must verify whether benefits are impaired and 
must have sufficient information about the me asures concerned to properly apply the specific 
provisions of the GATS.   
                                                      
191 Antigua's reply to Panel question No. 9. 
192 Request For Preliminary Rulings By The United States Of America, submitted to the Panel on 
17 October 2003. 
193 Appellate Body Report on US – Corrosion-Resistant Steel Sunset Review , para. 89. 
194 Ibid. , footnote 87. 
195 See above para. 3.91. 
196 See Panel question No. 10.  WT/DS285/R 
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3.103  Antigua points out that it is noteworthy that the United States itself stated that putting together 
all the pieces of the United States legislative puzzle in  this area is "an impossible task."  That is 
certainly the case if the standard of evidence concer ning municipal law is the one set out in the United 
States' request for preliminary rulings.  In this re quest, the United States explained that, in its view, 
even the United States v. Cohen  decision of the United States Court of Appeals for the Second 
Circuit197 is of limited value because it is the opinion of a court inferior to the United States Supreme 
Court.  Consequently, according to the United States, under US law the Cohen  decision only has value 
as precedent with respect to the same court and lowe r federal courts of the Second Circuit.  Thus, 
under this reasoning, Antigua could only challenge be fore the Panel those individual federal and state 
laws which the United States Supreme Court has unambiguously confirmed prohibit the cross-border 
supply of gambling and betting services from Antigua. In  this respect the Panel should note that the 
United States Supreme Court declined to review the conviction of Mr. Cohen.  In effect, the approach 
of the United States would mean that WTO dispute resolution would only be possible in relation to a "measure" whose meaning had been  definitively ascertained by the court of final instance of the 
relevant jurisdiction.  This interpretation ca nnot be correct under WTO law because the formal 
characteristics of any domestic legal system could make WTO dispute resolution impossible, even in 
a situation where the meaning in practice of the me asure was absolutely clear.  Even more directly, 
the United States continuing insistence that "[ a]ssuming that Antigua proves the meaning of 
individual measures, it must show their collec tive effect through evidence and argumentation 
regarding how these alleged measures interact with  one another in their implementation under US 
domestic law" is simply incorrect, both under th e definition of measure under the GATS as well as 
under WTO jurisprudence. 
3.104  Despite Antigua's firm belief that this dispute is best and most efficiently resolved on the 
basis of the unequivocal agreement between Antigua  and the United States on the "total prohibition" 
constituting a measure of itself, contrary to what  the United States has rep eatedly asserted, Antigua 
has provided considerable evidence of and discussi on about the construction of the total prohibition 
under United States law.  These efforts have included,  among other things:  (i) numerous references to 
and discussions of the principal federal statutes used by the United States to support its total 
prohibition;  (ii) provision to the Panel of the actual text of the principal state and federal laws that 
underlie the total prohibition;  (iii) discussions regarding the basic scheme of state and federal 
interaction in the area of gambling and betting and ho w the state and federal laws act to further the 
total prohibition.   
3.105  Antigua submits that, under the complicated and extensive body of law framed by the US 
federal Constitution, federal legi slation and rulemaking, as well as interpretive (and precedent-setting) 
court decisions, the federal government of the United States has left certain powers exclusively to the 
various states, while other powers are either solely in the hands of the federal government or, in many 
cases, shared on various bases between the states a nd the federal government.  One of the primary 
sources of the power of the federal government to legi slate in a manner binding on all of the states is 
what is known as the "commerce clau se" to the United States Constitution.
198  This allows the United 
States federal government to legislate, exclusively in most cases, in areas of commerce that cross state 
and international boundaries.  This clause has been used historically by the federal government to 
legislate on a vast number of topics that in many cases only have remote connecti ons with interstate or 
international commerce.199 
                                                      
197 260 F.3d 68 (2nd Cir. 2001), cert. denied 122 S.Ct. 2587 (2002).  
198 U.S. Const. art. I, § 8, cl. 3, which provides in  its pertinent part that "[T]he Congress shall have 
Power . . . [t]o regulate Commerce with foreign Nations , and among the several States, and with the Indian 
Tribes." 
199 Richard A. Epstein, The Proper Scope of the Commerce Power , 73 Va. L.Rev. 1387 (1987); Grant 
S. Nelson and Robert J. Pushaw, Jr., Rethinking the Commerce Clause: Appl ying First Principles to Uphold 
Federal Commercial Regulations but Preserve State Control Over Social Issues ,  85 Iowa L. Rev. 1 (1999).   WT/DS285/R 
Page 44  
 
3.106  According to Antigua, the United States' total prohibition comprises both state and federal 
laws, which, broadly speaking, fulfil two different ro les:  (i) state law generally prohibits all gambling 
within the territory of a state that has not been specifically authorized by that state;  and (ii) federal 
law prohibits the use of cross-border means to avoi d circumvention of the territory-based prohibitions 
of the individual states.
200  In general, gambling is a matter of state law in the United States.  Each 
state can determine for itself whether individuals can gamble within its borders and which gaming 
businesses can legally operate there.201  All states have adopted the same basic legal approach to 
gambling: it is illegal to offer gambling services in the state unless otherwise expressly authorized by 
statute.  In general, gambling is prohibited by one  or more constitutional or statutory provisions, while 
other constitutional or statutory provisions then "add back" the specific circumstances under which 
gambling can be offered in the state.202  Thus, even in Nevada "unauthorized" gambling is 
synonymous with "illegal gambling".  Currently, 48 states and the District of Colombia have given 
authorizations to offer gambling and betting services w ithin their territory to operators established on 
their territory. 
3.107  Antiguan operators cannot, however, obtain an authorization to supply gambling services 
from Antigua to any state or territory of the Un ited States.  This is often related to specific 
authorization criteria in legislation but may also be a matter of practice.  Antigua has not been able to 
investigate all the criteria that all states apply to  authorize a domestic operator to offer gambling and 
betting services.  In fact, it seems that in many cases states do not use predetermined, objective criteria when granting such an authorization.  Th e Final Report of the United States National Gaming 
Impact Study Commission
203 states the following about gambling regulation in the states: 
"Governments determine which kinds of ga mbling will be permitted and which will 
not; the number, location, and size of est ablishments allowed; the conditions under 
which they operate; who may utilize them  and under what conditions; who may work 
for them; even who may own them. And, because governments determine the level and type of competition to be permitted ─ they also are a key determinant of the 
various industries' potential profits and losses.
204 
[…] rivalry and competition for investme nt and revenues have been far more 
common factors in government decision-making regarding gambling than have any impulses toward joint planning.
205 
Those decisions generally have been reactiv e, driven more by pressures of the day 
than by an abstract debate about the public welfare.  One of the most powerful 
motivations has been the pursuit of revenues."206 
3.108  Furthermore under the laws or the practice of every state that provides for state-sanctioned 
gambling in one form or another, the conditions a ttached to obtaining the right to supply gambling 
                                                      
200 Antigua notes that, in some instances, federal laws act  exclusively in pursuit of a federal interest that 
preempts state law.  See , e.g., Interstate Horseracing Act; 28 U.S.C. §§3701-3704 (the "Professional and 
Amateur Sports Protection Act"). 
201 GAO Report, p. 11. 
202 Antonia Z. Cowan, " The Global Gaming Village: Interstate and Transnational Gambling ," 7 
Gambling Law Review 251, pp. 255-257.  See  also "Gambling Law in Five States  and Their Effect on Internet 
Gambling", Enclosure 1 to the Interim Report of the United States General Accounting Office on Internet 
Gambling (23 September 2002), in which the United States General Accounting Office "discusses the details of the gambling laws in the five states – Massachusetts , Nevada, New Jersey, New York, and Utah – that we 
judgmentally selected to reflect the wide variations in state gambling laws."  Ibid . at p. 18. 
203 National Gaming Impact Study Commission – Final Report, 18 June 1999. 
204 Ibid., pp. 1-4 
205 Ibid., pp. 1-5. 
206 Ibid.  WT/DS285/R 
 Page 45 
 
 
services in the state by definition preclude An tiguan operators from qualifying on a cross-border 
basis.  In combination with the general prohibitions  in each state, these exclusionary "authorization" 
state laws prohibit all cross-border supply of so -called "unauthorized" gambling from suppliers in 
Antigua, via the Internet or otherwise.  Some stat es limit all forms of sanctioned gambling to specific 
locations within the state.  For example:  (i) in Colorado, casino gambling may only be conducted in 
three historic mining towns;207  (ii) in Connecticut, slot machines and electronic gaming devices 
("EGDs") can only operate from the state's Native American casinos208 and bingo may only be offered 
at a location which can be physically  inspected by state gaming officials;209  (iii) in Indiana, casino 
gambling may only be conducted on ri verboats on Indiana waterways.210  This requirement is 
consistent with the legislative intent of the Indi ana gaming statute "to benefit the people of Indiana by 
promoting tourism and assis ting economic development";211  (iv) in South Dakota, casino gambling 
(blackjack, poker, slot machines) is permitted only in the city of Deadwood and nine Indian casinos 
located in the state;212  (v) Mississippi will only license casino gambling on boats or in other limited 
defined areas within the state.213  
3.109  Antigua further submits that some states limit the number of gambling licenses available to 
service providers.  For example:  (i) Illinois limits the number of gaming licenses to ten for the entire 
state;214  (ii) Louisiana limits the number of riverboat casino licenses to fifteen, with no more than six 
per designated waterway;215  (iii) in Iowa, the state has set a maximum number of pari-mutuel 
operators and casino operators.216  Antigua notes that some states require the providers of betting and 
gambling services to be physically present within th e state as they provide their services.  For 
example:  (i) in Iowa, in order to offer gambling ser vices such as blackjack, cr aps, roulette, poker, slot 
machines and video poker, the services must be  offered on the licensed facility's grounds;217  
(ii) Nevada will not license any gambling provider w hose premises are "difficult to police" or where 
the conduct of gaming would be inconsiste nt with the public policy of the state.218   Moreover, some 
states require gamblers to be physically present when they are engaged in gambling activities.  For 
                                                      
207 Colorado Division of Gaming, Colorado Gaming Questions and Answers 
(www.gaming.state.co.u s/dogfaq.htm)  (visited 22 December 2003). 
208 Connecticut Division of Special Revenue, Frequently Asked Questions: Agency  
(www.dosr.state.ct.u s/FAQagency.htm), question no. 4 (visited 22 December 2003). 
209 Connecticut Division of Special Revenue, Administrative Regulations: Operation of Bingo Games, 
Rule, 7-169-8a (www.dosr.st ate.ct.us/PDFFolder/OPERATION%20BINGO%20GAMES.pdf).  
210 Indiana Code 4-33-9-1 (stating that gambling can be conducted by licensed providers on riverboats ) 
(www.in.gov/legislative/ic/code/title4/ar33/ch9.html); 68 Indiana Administrative Code 2-1-4(c)(1) (requiring 
applications for riverboat gambling licenses to state which dock the riverboat will be docked) (www.in.gov/legislative/iac/T00680/A00020.PDF).  
211 Indiana Code, 4-33-1-2 (www.in.gov/le gislative/ic/code/title4/ar33/ch1.html).  
212 South Dakota Commission on Gambling, Frequently Asked Questions  
(www.state.sd.us/drr2/reg/gaming/frequent.htm).  
213 Mississippi Gaming Commission Regulations, Section II(B)(2) (www.mgc.state.ms.us/). 
214 Illinois Riverboat Gaming Act,  230 Illinois Compiled Statutes 10/7(e) (stating that the state gaming 
board may issue up to 10 licenses authorizing riverboat gambling) (www.igb.state.il.us/act/section7.html).  
215 Louisiana Gaming Control Law, RS 27:65 
(www.legis.state.la.us/tsrs/tsrs.asp ?lawbody=RS&title=27&section=65).  
216 This limitation reads as follows: Limitation on location and number of racetracks and excursion 
gambling boats. 1.6(1) The number of licenses to conduct horse racing sha ll be one for a racetrack located in 
Polk County. The number of licenses to conduct dog racing shall be two, one for a racetrack located in Dubuque 
County and one for a racetrack located  in Pottawattamie County. The total num ber of licenses issued to conduct 
gambling games on excursion boats shall not exceed ten and shall be restricted to th e counties where such boats 
were operating (or licensed to operate in the future) as  of May 1, 1998.  Iowa Racing and Gaming Commission, 
Administrative Rules, 491--1.6(99D,99F) (www3.state.ia.us/irgc/CH1.pdf).   
217 Iowa Racing and Gaming Commission, Administrative Rules, 491--11.5(4)(a)(4) 
(www3.state.ia.us/irgc/CH11.pdf). 
218 Regulations of the Nevada Gaming Commission and State Gaming Control Board, Regulation 
3.010(5) and (7) (http://gaming.stat e.nv.us/stats_regs/reg3.doc).  WT/DS285/R 
Page 46  
 
example:  (i) in Connecticut, in order to gamble at bingo a player must be physically present on the premises where the game is offered;
219  (ii) in Indiana, to gamble on a riverboat casino a gambler must 
be physically present on the riverboat;220  (iii) in Iowa, a racetrack can only make payment on winning 
pari-mutuel tickets upon presenta tion and surrender by the bettor where the wager was made.221  
3.110  Historically the main objective of federal law concerning gambling was to protect the 
territorial integrity of states' gambling legislation by  prohibiting the use of interstate or international 
facilities (such as post and "wire communications") or interstate or international commerce to offer 
gambling services.222  While some state laws might purport to extend beyond their borders, the 
questionable ability to acquire jurisdiction over persons in other states and countries as well as the 
inability to apply state laws in the generally federa l area of interstate and international commerce in 
virtually every instance limits the effectiveness of state legislation to activities actually occurring and 
persons actually present within the territory of the stat e.  The existence of federal legislation facilitates 
the prosecution of suppliers of "unauthorized" gamb ling to, for instance, New York from another state 
or another country because the supply of this "u nauthorized" gambling then also becomes a federal 
crime and many of the jurisdictional difficulties of a state prosecution are no longer applicable.  Thus 
the United States federal laws that prohibit interstate and cross-border223 supply (i.e. the ban on the 
use of interstate or international commerce or communication facilities) are a critical component of and add to the total prohibition that is in fact al ready established (albeit difficult to enforce) by the 
state laws alone.  In this respect the Panel should also note that, contrary to what the United States 
suggests, the laws comprising the federal ban on in terstate and cross-borde r supply of gambling and 
betting services were not put in place because interstate and cross-border supply of gambling and 
betting services was considered a greater health risk  than the local supply of gambling services.  The 
federal ban on interstate and cro ss-border supply is merely intended to safeguard the states' ability to 
regulate gambling as they see fit within their borders. 
3.111  Antigua states that it is particularly important to realize what United States federal law does 
not do.  For example:  (i) federal law does not require  states to regulate gambling within their borders;  
(ii) federal law does not require states to prohibit gambling within their borders;
224  (iii) federal law 
does not prohibit telephonic, electronic, Internet  or any other forms of remote gambling from 
occurring within the borders of any state .  Thus, ironically (and somewhat difficult to reconcile with 
the position of the United States that cross-border supply of gambling and betting services poses significant health, law enforcement and other soci al issues that justify the United States total 
prohibition), under current federal law every state in the United States, if it so chose, could offer 
                                                      
219 Connecticut Division of Special Revenue, Administrative Regulations: Operation of Bingo Games, 
Sec. 7-169-13a (www.dosr.state.ct.us/PDFFolder/OPERATION%20BINGO%20GAMES.pdf).  
220 Indiana Code, 4-33-9-10 (www.in.gov/le gislative/ic/code/title4/ar33/ch9.html). 
221 Iowa Racing and Gaming Commission, Administrative Rules, 491-8.2(4)(g) 
(www3.state.ia.us/irgc/CH8.pdf). 
222 Internet Gambling Prohibition Act, Senate Report No. 106-121, footnotes 46 and 47.  
223 Antigua is of the view that, throughout this proceeding there has been some uncertainty about, and 
mixed use of, the proper nomenclature for the gambling and betting services offered by Antigua.  While the 
United States would generally like to call the Antiguan serv ices "remote," Antigua beli eves that there are many 
state-sanctioned gambling services provided domestically in  the United States that ar e also "remote" even if 
originating domestically and even if not involving some type of electronic transmission or communication (such 
as scratch card gambling offered by lotteries in the United States).  Given the language of the GATS ("cross-
border supply"), Antigua believes cros s-border supply to be the more accurate term for the services being 
offered by Antigua and prohibited by the United States.  See also Antigua's reply to Panel question No. 20.  As explained in Antigua's reply to Panel question No. 20, An tigua uses the term "cross-border" as defined by the 
GATS, i.e . in relation to trade in services crossing borders of WTO Members.  The tr ade in services between 
states of the United States is described as "interstate."  
224 Antigua notes that there are limited exceptions where the United States has legislated under the 
power of the "commerce clause" that impact the ability of st ates to legislate or regulate in certain respects.  See 
footnote  200 above.  WT/DS285/R 
 Page 47 
 
 
completely unregulated Internet gambling to every pe rson located within the borders of the state.  Yet 
Antigua would still be unable to provide any gambli ng and betting services – regulated or not – into 
the United States on a cross-border basis. 
3.112  The United States  reiterates that a complaining part y must demonstrate, through evidence 
and argumentation, the existence and meaning of the measure(s) purportedly at issue.225  Antigua is 
the party making claims about US domestic law,  and it therefore "bears the burden of introducing 
evidence as to the scope and meaning of su ch law to substantiate that assertion."226  An examination 
of relevant "specific provisions" of domestic law is essential to the assessment of such a claim227, and 
Antigua has not provided the evidence and argumen tation necessary in order for the Panel to make 
such an assessment.  Antigua has given the Panel a "data dump" of nearly all the measures cited in its 
Panel request, along with cursory descriptions of  those laws.  These descriptions are patently 
insufficient as argumentation.  Most obviously, they  fail to tell the Panel or the United States precisely 
which measures Antigua regards as relevant – a fail ure that Antigua continues to dismiss with the 
baseless excuse that it is sufficient me rely to cite a "range" of measures.228  Antigua's thumbnail 
descriptions also fail to allege the impact of each  specific provision on remote supply of gambling.  
Finally – and most fundamentally – Antigua fails to  explain how each specific measure relates to its 
argumentation regarding allege d violations of the GATS. 
3.113  The United States maintains that, to the extent  that Antigua means to assert a "collective 
effect" claim, it is well-established that the pa rty asserting such a claim must provide evidence and 
argumentation to enable the Panel to first examine the independent meaning of each specific measure 
that allegedly contributes to a combined effect.  Then that party bears the further burden of detailing 
how, under domestic law, the individual measures operate together to give rise to the cumulative 
effect that is alleged to be inc onsistent with WTO obligations.  Anti gua has not done such an analysis, 
and has instead explicitly denied any obligation on it s part to piece together the "puzzle" of its own 
claim.  Antigua's claim is indeed a puzzle.  It is neither the responsibility of the Panel nor that of the 
United States to guess which measures are relevant  and which are not, nor to assemble Antigua's 
claim of collective effect.229  As the complainant, Antigua itself formulated its broad claims, thus it 
alone must undertake the "exhausting exercise of  plodding through hundreds of state and federal 
statutes" to make its prima facie  case, and the Panel cannot disregar d Antigua's failure or explicit 
refusal to do so.230  Based on Antigua's inactions, the Panel can only conclude that it is unable to 
proceed with an examination of any "measure" becau se Antigua has neglected to articulate its claims 
with sufficient precision. 
3.114  Antigua maintains that the most efficient way for th e Panel to approach this dispute is on the 
basis of the unambiguous agreement of the partie s that the cross-border provision of gambling and 
betting services from Antigua to consumers in the Un ited States is always illegal under United States 
law.  Antigua has demonstrated the wide scope of what constitutes a "measure" under the GATS and 
other WTO agreements, and that WTO jurisprudence supports this approach.  Yet, the United States 
essentially submits that the Panel can only assess Antigua 's claim if Antigua first provides a "precise 
                                                      
225 The United States indicates it has already pointed  out that Antigua's mere assertion as to the 
collective effect of US gambling laws – that they repr esent a "total prohibition" on cross-border gambling – 
cannot amount to proof of a violatio n of WTO obligations.  The notion of  a total prohibition is not itself a 
measure, nor is it a notion with any legal status as su ch under US law.  Antigua misstates the US position as 
saying that only statutes can be challenged in WTO dispute settlement.  This is obviously not the US position. 
226 Appellate Body Report on US – Carbon Steel , para. 157. 
227 Appellate Body Report on India – Patents (US) , paras. 66-69. 
228 For instance, Antigua's 19 December 2003 letter to the Panel. 
229 Appellate Body Report on Japan – Agricultural Products II,  paras. 125-131 (finding that a Panel 
cannot rule in favour of a complaining party which has not established a prima facie  case of inconsistency based 
on specific legal claims asserted by it). 
230 See above para. 3.94. WT/DS285/R 
Page 48  
 
statutory analysis"
231 of all federal and state laws and regula tions applying to the cross-border supply 
of gambling and betting services from Antigua, and also , apparently, of all the laws and regulations 
authorising and regulating legal gambling in the Unit ed States.  The United States also believes that it 
is incumbent upon the Panel to "examine the inde pendent meaning of each specific measure (…)."232  
This concerns thousands of pages of legislative and regulatory provisions and (as the United States 
itself has noted) would make this case simply im possible.  No matter how confidently the United 
States may so assert, there is no support for this kind of formalistic approach, either in the GATS, any 
of the other WTO Agreements or under WTO jurisprude nce.  Such an approach would also make the 
resolution of many other trade disputes impossibl e, in particular claims brought by developing 
country Members against Members that maintain very  complex domestic legislation with regard to a 
specific subject matter.  Because of scarce resour ces, developing countries find it difficult to bring 
dispute settlement cases to the WTO even when the domestic legislation of the defendant is simple.  
An approach such as that insist ed upon by the United States would serve only to deter developing 
Members from using the dispute settlement syst em, effectively limiting access to WTO dispute 
machinery to the richest Members.  Furthermore there will likely be cases where the thousands of 
pages of domestic legislation are not available in E nglish, French or Spanish. In such a situation a 
stringent requirement of "precise statutory analysis " of all these provisions would entail, to say the 
least, an insurmountable translation task.  Finally, it would be totally impossible for panels to respect 
the nine months timeframe laid down in Article 20 of the DSU. 
3.115  Antigua acknowledges that there may be circum stances in which a panel nevertheless has to 
undertake such a "precise statutory analysis," na mely in situations where there is a genuine 
disagreement and a genuine lack of clarity about the e ffect of a Member's domestic law.  But that is 
patently not the case here.  The United States,  referring to the Appellate Body Report in US –  Carbon 
Steel, argued that Antigua had to submit evidence as to  the scope and meaning of United States law.  
According to that Appellate Body report: 
"Such evidence will typically be produced in the form of the text of the relevant 
legislation or legal instruments, which ma y be supported, as appropriate, by evidence 
of the consistent application of such laws , the pronouncements of domestic courts on 
the meaning of such laws, the opinions of le gal experts and the writings of recognized 
scholars." 
This is precisely what Antigua has done. 
 
3.116  Contrary to what the United States continues to  maintain, Antigua has not "failed or refused" 
to submit evidence of the United States measures.  In  fact, the evidence submitted by Antigua on this 
point is more than sufficient to satisfy Antigua's bur den of proof and to establish the existence of one 
or more United States measures – particularly becau se the United States has either expressly agreed or 
at least not sought to deny that:  (i) all cross-border supply of services from Antigua to the United 
States that involves placing a bet or wager is prohibited;   (ii) it is impossible to obtain an authorization 
to supply gambling and betting services on a cross-borde r basis to the United Stat es;  (iii) its states 
maintain physical presence requirements;  (iv) its  states maintain numerical limits on the number of 
service suppliers;  (v) its states have establishe d monopolies and given exclusive rights to certain 
domestic operators.  The purpose of WTO dispute se ttlement is to stop the impairment of treaty 
benefits.  It is not to undertake academic analyzed s of Member's domestic laws.  It is also not to 
identify and remove specific "measures" of the defe ndant.  If that were the case a defendant who loses 
a case could replace its "measures" with new and different "measures" that have the same effect.  As already demonstrated by Antigua, under US law,  the federal government possesses the exclusive 
power to legislate in the area of international commerce.  If the United States is concerned about how 
it might comply with an adverse ruling by the DSB against it in this proceeding, it need only look as 
                                                      
231 See below para. 3.139.  
232  See above para. 3.87.  WT/DS285/R 
 Page 49 
 
 
far as what its Congress has done in countless other situations – impose one federal law governing the 
relationship between the United States and Antigua th at is binding upon all of the states, automatically 
rendering all contrary state legislation moot. 
3.117  The United States  maintains its views regarding the legal requirements for a prima facie  
case.  Moreover, the United States notes that, in suppor t of the view that it may challenge the alleged 
US "total prohibition", Antigua cites the Appellate Body's report in US –  Corrosion-Resistant Steel 
Sunset Review  for the propositions that it is "legally possibl e to challenge such a total ban" and that a 
panel "is not obliged ... to examine all domestic laws, regulations, app lications and practices that may 
contribute" to the alleged total prohibition.233  Antigua's discussion of US – Corrosion-Resistant Steel 
Sunset Review misreads that report.  That report was addressing the question of whether an actual 
document issued by the US Department of Commer ce could be considered a "measure".  Here, 
however, Antigua is seeking to challenge its own creation – its alleged "total prohibition".  This 
alleged "total prohibition" is not a document issu ed by the US Government and it embodies no act or 
omission of the United States Government – it is nothi ng more than verbiage that Antigua attaches 
without basis to a large group of "specific legi slative and regulatory provisions" of the United 
States.234  
3.118  On this point, US –  Corrosion-Resistant Steel Sunset Review  affirmatively contradicts 
Antigua's assertion that this Panel need not examin e all the relevant specific provisions that make up 
the alleged "total prohibiti on."  Indeed, the Appellate Body faulte d the panel in that dispute because it 
"had not conducted any in-depth consideration of the impugned provisions of the" US Department of 
Commerce document at issue.235  Moreover, the Appellate Body referred at paragraph 168 to its 
statement in its recent report on US – Carbon Steel  that a party asserting that another party's 
municipal law is inconsistent with a WTO obliga tion must introduce evidence as to the scope and 
meaning of that municipal law.  Thus, US - Corrosion-Resistant Steel Sunset Review  if anything 
confirms the US view that the assessment of clai ms regarding domestic law requires an examination 
of relevant "specific provisions" of domestic law.236  Consistent with this principle, Antigua has the 
burden of providing evidence and argumentation suffici ent to enable the Panel to examine all of the 
"specific provisions" relevant to Antigua's claims in dividually and in terms of their interaction under 
domestic law.  To the extent that Antigua fails to say precisely what provisions are or are not relevant, or offer argumentation on specific provisions, it does not even meet the most basic elements of a prima facie  case.  The United States further submits that Antigua still has not sustained its burden of 
proof regarding the existence and meaning of any state law individually, much less all of them 
collectively.  Antigua asserts that "[S]tate law genera lly prohibits all gambling within the territory of a 
state that has not been specifically  authorized by that state," yet the language of the statutes provided 
by Antigua varies widely, as do their meaning, operati on, application and interpretation.  And, as the 
United States has previously observed, many seem pa tently irrelevant.  It is Antigua's burden to 
confront those issues – something it again still has not done.  
3.119  The United States notes that, in its second submission, Antigua for the first time cited specific 
state measures that allegedly "prohibit all cross-border supply."
237  In particular, Antigua cites alleged 
restrictions on the physical location of gambling in Colorado, Connecticut, Indiana, Mississippi, and 
South Dakota; alleged limits on the number of licenses for riverboat casinos in Illinois and Louisiana, alleged limits on the number of pari-mutuel operato rs and casino operators in Iowa; alleged physical 
presence requirements for gambling service providers  in Iowa and Nevada; and alleged physical 
presence requirements for bettors in Connecticut, Indi ana, and Iowa.  The United States has examined 
                                                      
233 See Antigua's reply to Panel question No. 10 , See also above para. 3.102. 
234 Antigua's reply to Panel question No. 10.  
235 Appellate Body Report on US - Corrosion-Resistant Steel Sunset Review,  para. 95. 
236 See above paras. 3.112; 3.84 (citing the Appellate Body Report on  India – Patent US , paras. 66-69). 
237 See above paras. 3.108 and 3.109. WT/DS285/R 
Page 50  
 
the sources identified by Antigua fo r each of those alleged restrictions
238 and is not able to locate any 
of the cited sources among the items listed in the Annex to Antigua's Panel request.  It therefore 
appears that these alleged restrictions are outside th is Panel's terms of reference.  In any event, 
Antigua does not explain how these alleged restrictions affect, much less "prohibit," cross-border supply.  Based on Antigua's descriptions, all of th em appear to relate exclusively to supply of 
gambling services by physical presence within a state. 
3.120  The United States notes that Antigua also argu es that the United States has somehow made a 
"concession" in this dispute regarding the existence of a "total prohibition" on cross-border supply of 
gambling services, and that this somehow relieves An tigua of its fundamental responsibility to make a 
prima facie  case regarding specific provisions of US law.  The United States very forthrightly told 
both the DSB and this Panel that it does not permit cer tain services, such as Internet betting, either 
domestically or on a cross-border basis.  The Unit ed States has also clarified that it does permit 
certain other gambling services on a cross-border basis.  And it has stated that there is no overarching measure apart from US laws themselves that embodies these restrictions.  The "total prohibition" is 
simply a baseless label created by Antigua.  It does not embody, or even accurately describe, the 
actual provisions of US law, and it is nothing mo re than another attempt by Antigua to avoid its 
burden of establishing its prima facie  case regarding the actual text and meaning of US law. 
3.121  The United States submits that nothing that it h as said to the DSB or in the course of this 
dispute relieves Antigua of its burden to show exactly  what measures it is challenging,  and how those 
measures, individually or in combination, violate the GATS.  The United States neither concedes nor 
agrees with any of Antigua's propositions about the a lleged "total prohibition".  Antigua asserts that 
the US – Section 301 Trade Act  panel report somehow suggests that it need not examine the US laws 
and regulations at issue in this dispute, but the Section 301 Trade Act panel  could not be clearer in 
opposing this position.  In fact, the Section 301 Trade Act  panel that it is an indispensable first step in 
any dispute to determine the meaning of the domestic laws at issue in order to then analyze whether 
those laws breach the Member's obligations.
239  In this dispute, Antigua acknowledges that its alleged 
total prohibition is "composed of specifi c legislative and regulatory provisions."240  Yet Antigua 
refuses to examine those "specific"  instruments, as called for in Section 301 Trade Act  and numerous 
other Panel and Appellate Body reports.  Finally, Antigua's lengthy assertions about US law 
governing stipulations, estoppel, and the like are all i rrelevant, and need not be addressed at length.  
Antigua has acknowledged that US law does not govern such issues in this forum241, and the United 
States agrees on that point, but disagrees with Antigua's hypothesis about how a US court would deal 
with these issues given the particular facts of this dispute. 
3.122  The United States further notes that it is Antigua itself – not the United States – that 
established through its own Panel request  the terms of reference in this dispute, and thus the extent of 
its own burden of proof.  If Antigua now finds it impossible to sustain this burden, it only has itself – not the United States – to blame.  On a related not e, Antigua appears to assert that its status as a 
developing country should exempt it from having to make a prima facie  case.  The United States has 
high regard and great sympathy for the concerns of developing countries, and welcomes their use of the dispute settlement mechanisms of the WTO.  However, it questions whether Antigua's developing 
country status has been responsible  for its decision not to offer a prima facie  case.  Antigua has 
obtained the assistance in this dispute of a team of   US and European counsel who are experts on US 
and WTO law, as well as a team of US and European academic advisers.   Moreover, since Antigua is 
an English-speaking country, the United States fails to see the relevance of Antigua's concerns about 
language barriers for developing countries.  And finally, and most  fundamentally, the United States 
                                                      
238 See above footnotes 207 to 221. 
239 Panel Report on US – Section 301 Trade Act , paras. 7.17-7.18. 
240 Antigua's reply to Panel question No. 10.   
241 Antigua's reply to Panel question No. 9.  WT/DS285/R 
 Page 51 
 
 
questions whether basic notions of due process w ould ever permit a downward or upward adjustment 
in the burden of proof based on a Member's level of development. 
3.123  The United States submits that Antigua  has not met the standard for a prima facie  case 
articulated in Carbon Steel  by merely providing the text of domestic laws – to the tune of a thousand 
pages or more – and short summaries of some of those laws.  The standard as articulated in Carbon 
Steel  calls for information that is necessary to engage  in an analysis of the meaning, application, 
interpretation, and interaction of specific provisi ons of domestic law.  The Appellate Body has 
repeatedly confirmed – for example in India – Patents (US)  and US – Corrosion-Resistant Steel 
Sunset Review  – that this means an analysis of "sp ecific provisions" of US law – not merely 
provisions and short summaries of the laws.  The United States argues that a case built on 
generalizations about US law does not meet th e burden of proof because the purpose of dispute 
settlement is not to analyze domestic law or "remove  specific 'measures' of the defendant."  The DSU 
clearly states in Article 3.7 that, in the absence of a mutually agreed solution, "the first objective of 
the dispute settlement mechanism is  usually to secure the withdrawal of the measures concerned if 
these are found to be inconsistent with the provisions of any of the covered agreements."  This just 
further confirms that Antigua's burden relates to sp ecific measures of U.S. law, not generalizations 
about US law. 
4. GATS Article XVI242 
3.124  Antigua  argues that, in its Schedule, the United States has made a full commitment to the 
cross-border supply of gambling and betting services.   Simultaneously, the United States totally 
impedes cross-border market access by prohibiting all cross-border supply of gambling and betting 
services.  This constitutes a manifest violation of Article XVI:1 of the GATS.  
3.125  Antigua further argues that the United States main tains an array of measures that constitute a 
total prohibition of the supply of gambling and betting services unless this has been authorized (generically or individually) by authorities of the United States (via legislation, regulation or individual licences).  Thousands of service suppliers  of United States origin have been given an 
authorization to supply gambling and betting services (often creating monopolies or exclusive service 
suppliers).  It is impossible, however, for service s uppliers from Antigua to obta in an authorization to 
supply services on a cross-border basis.  This comple te ban on cross-border supply maintained by the 
United States qualifies as a "limitation on the number of service suppliers" prohibited by Article XVI:2(a) of the GATS.  The United States measures violate Article XVI:2(a) not only as establishing a numerical quota (of zero)
243 but also as measures creating monopolies or exclusive 
service suppliers.  The complete ban on cross-border s upply also qualifies as a "limitation on the total 
number of service operations" prohibited by Article XVI:2(c) of the GATS. 
3.126  The United States  replies that Antigua fails to prove th e inconsistency of any US measure(s) 
with Article XVI of the GATS.  Article XVI prohi bits Members that have inscribed commitments 
from maintaining or adopting six types of measures re ferred to in its paragra ph 2, sub-paragraphs (a) 
to (f).  Antigua asserts that the United States h as made a full commitment applicable to gambling 
services, and that the United States "totally impedes cross border market access" and therefore violates Article XVI:1 of the GATS.  This argument appears to rest on the mistaken assumption that the existence of a commitment in the market ac cess column of a Member's schedule implies a 
generalized commitment not to impede "market acc ess."  In fact, Article XVI does not enshrine a 
general rule prohibiting measures that impede "market access" in whole or part.  Instead, it prohibits 
                                                      
242 In addition to the arguments presented here, see also  parties' replies to Panel questions Nos. 15 and 
37-39 in Annex C of this Report. 
243 Antigua suggests to compare, with regard to Article XI:1 of GATT 1994, the Panel Report on 
Canada – Periodicals , para. 5.5. WT/DS285/R 
Page 52  
 
only those measures falling within the sp ecific categories listed in Article XVI:2.
244  While 
Article XVI:1 makes clear that the Article a ddresses market access, it is the closed list in 
Article XVI:2 that defines the substance of the ob ligation that Article XVI imposes.  Therefore, the 
Panel should restrict its Article XVI inquiry in this  dispute to an examination of whether Antigua has 
proven that any specific US measures fall within  the particular types of measures listed in 
Article XVI:2.  
3.127  The United States further submits that Antigua re fers to an "array of measures that constitute 
a total prohibition" on the cross-border supply of gamb ling services.  Once again, Antigua's failure to 
cite specific measures makes it impossible for the Pane l to examine exactly what types of activity are 
or are not restricted under US law.  Without some evidence – aside from the mere assertion of a "total 
prohibition" – as to the scope and meaning of US la w, Antigua's argument fails.  Antigua specifically 
argues that the alleged "complete ban" violates Artic le XVI:2(a), which prohibits the maintenance or 
adoption of "limitations on the number of service su ppliers whether in the form of numerical quotas, 
monopolies, exclusive service suppliers or the require ments of an economic needs test," as well as the 
prohibition in Article XVI:2(c) on "limitations on the total number of service operations ... expressed 
in terms of designated numerical un its in the form of quotas or the requirements of an economic needs 
test."  The United States submits that these provisions require a panel to examine the "form" of the US measure(s) at issue and the way in which su ch measures are "expressed" – something it cannot do 
without evidence from Antigua as to the specific measures alleged to be  inconsistent with 
Article XVI:2. 
3.128  According to the United States, even if Antigua had attempted to make a prima facie  case as 
to how any US measure is inconsistent with Article  XVI, which it has not, it could not have done so.  
The United States can find no US measure listed in Antigua's Panel request that takes the form of 
"numerical quotas" or is expressed as "designated nu merical units in the form of quotas."  Nor is the 
United States aware of any measure within the scope  Antigua's Panel request the form or manner of 
expression of which matches any of the other form s identified in Article XVI:2(a) and XVI:2(c).  
Indeed, Antigua has pointed to no such measures .  As far as the United States is aware, the 
gambling-related US measures listed in the Pane l request are framed entirely in terms of non-
numerical criteria that restrict certain forms of activity, rather than numbers  of providers, operations, 
or output.  Thus, no relevant US measures would a ppear to fall within the ambit of Article XVI:2.
245  
Antigua's assertion that Antiguan suppliers cannot ob tain authorization from regulators in the United 
States to supply gambling services on a cross-border basis has no relevance by itself, unless Antigua 
can point to some measure listed in its Panel re quest that contains some quantitative limitation 
specified in Article XVI:2, which it has not done.246 
3.129  Antigua  further argues that Article XVI:1 of the GATS clearly provides that each Member 
shall accord services and service suppliers of any ot her Member treatment no less favourable that that 
provided for under the terms, limita tions and conditions agreed and sp ecified in its Schedule.  This 
language is completely straightforward.  The Un ited States has made a full commitment to market 
access for gambling and betting services from other WTO Members supplied on a cross-border basis 
while simultaneously it completely prohibits all cross-border supply of gambling and betting services. 
This constitutes an obvious violation of Article XVI:1.   
                                                      
244 2001 Scheduling Guidelines, para. 8 ("A Member grants full market access in a given sector and 
mode of supply when it does not maintain in that sector and mode any of the types of measures listed in 
Article XVI."). 
245 The United States notes in particular that qualitativ e tests are beyond the scope of Article XVI.  The 
Scheduling Guidelines make explicit what is already clear from the text of the Article: The criteria in sub-
paragraphs (a) to (d) of Article XVI "do not rela te to the quality of the service supplied."  Ibid. 
246 Ibid., para. 10 (stating that "approval procedures or licensing and qualification requirements" need 
not be scheduled under Article XVI "as long as they do not contain any of the limitations specified in 
Article XVI").  WT/DS285/R 
 Page 53 
 
 
3.130  According to Antigua, the United States appears to argue that Article XVI:1 does not have a 
legal significance separate from Article XVI:2.  Antigua is  of the view that the text of Article XVI:1 is 
clear, and unambiguously imposes a legal obligation on the United States.  If the United States were to be correct that the first paragraph of Article XVI is merely an introductory clause to the second 
paragraph, by implication the wording of the firs t paragraph must somehow assist in or otherwise 
frame the interpretation of the second paragraph. Othe rwise, Article XVI:1 would be pointless.  Thus 
Article XVI:2 should be interpreted in a way that  ensures that services and service suppliers of the 
exporting Member are given the treatment by the im porting country described in Article XVI:1, which 
is market access "no less favourable than that provi ded for (...) in its Schedule."  The United States, 
however, does precisely the opposite and suggests a very restrictive interpretation of the 
subparagraphs of Article XVI:2.  In particular, the United States submits that limitations on the 
number of service suppliers and limitations on th e number of service operations are only caught by 
Article XVI if they are expressed in the form of sp ecific numerical restrictions.  However, as Antigua 
and the European Communities have pointed out, a total prohibition is a numerical restriction – of zero.  As explained by the European Communities,  if this were not the case it would be easy for 
Members to escape the prohibitions of subparagraphs (a) and (c) by refusing to specify an actual 
number and just simply prohibit any number – exactly  what the United States is attempting to do here. 
Such a restrictive interpretation would also conflict with the objective of Article XVI as defined in its 
first paragraph. 
3.131  As to the United States' argument that qualitativ e tests are beyond the scope of Article XVI, 
Antigua submits that it is precisely the point that it is seeking to make.  The reason why it is 
impossible for Antiguan operators to obtain an au thorization to supply ga mbling and betting services 
into the United States, while so many domestic operators  do have such an authori zation, is not that the 
Antiguan operators fail to meet a qualitative test th at United States operators do meet.  The United 
States' prohibition applies irrespective of the qualit y or specific characteristics of the service or the 
service supplier. Thus, the United States prohibition is a quantitative restriction and not a qualitative 
restriction.  Antigua also points out that Article XVI does not have any "likeness" requirement as that 
found in Article XVII.  Thus under Article XVI, the na ture and extent of the domestic industry is in 
fact irrelevant in assessing a Member's obligations in  a sector in which commitments have been made. 
3.132  The United States  replies that Antigua treats Article XVI as if it enshrines a general rule 
barring measures that impede "market access" in whole or in part.  That is simply the wrong interpretation.  A market access commitment in a pa rticular sector does not imply that Members lose 
all rights to restrict particular types of activity in that sector.  For exampl e, a commitment for cross-
border supply of medical services does not imply that  Members must then permit doctors to diagnose 
patients over the telephone or over the Internet.  The only question under Article XVI is whether the 
measure is in fact one of those listed in Article XVI :2.  The list includes, in relevant part, measures 
identified by their particular "form" – such as "in the form of numerical quotas."  The United States 
points out again that its restrictions on certain  remote supply gambling activities are expressed as 
limitations on the character of the activity supplied,  not as quantitative limits or other restrictions 
within the ambit of Article XVI:2.  
3.133  It has been suggested that an across-the-boa rd prohibition on cross-border services could 
amount to the same thing as a zero quantitative restriction, because under such a prohibition no 
foreign supplier can provide gambling services from out side the territory of the United States.  The 
legal premises for this argument are obscure; the te xt of Article XVI:2, quite clearly refers to the 
numerical expression of such limitations.  Moreover, the basic factual premise for this argument is completely absent.  There is no across-the-board prohibition on the cross-border supply of gambling 
services in US law.  US law certainly restricts th e remote supply of gambling, but these restrictions 
are not so broad that they prohibit all cross-borde r supply of gambling services.  An examination of 
specific provisions of US law, had Antigua undertaken one, would have borne this out. WT/DS285/R 
Page 54  
 
3.134  Antigua  reiterates that, by maintaining a total prohibition on the cross-border supply of 
gambling and betting services the United States completely denies market access and violates its obligations under Article XVI of th e GATS.  This total prohibition violates Article XVI:1 and XVI:2, 
regardless of whether the provisions are construed separ ately or jointly – that is even if Article XVI:1 
cannot be applied independently of Article XVI:2, it must at the very least govern the interpretation of 
Article XVI:2.  Stated differently, the sum of the rules in the subparagraphs of Article XVI:2 cannot 
be less than what is set out in Article XVI:1.  Th e United States' total prohibition, as such, is caught 
by Article XVI:2(a) because it is the equivalent of a zero quota.  The ability to apply Article XVI:2(a) to such a non-numerical zero quota is mandated by th e principle of effective treaty interpretation and 
confirmed by the 1993 Scheduling Guidelines. 
3.135  In Antigua's view, the individual legislative and regulatory provisions, applications thereof 
and related practices that make up the United St ates' total prohibition are also caught by both 
Article XVI:2(a) and XVI:2(c) as separate measures:  (i) federal laws specifically prohibiting "cross-
border" supply function, like an es tablishment requirement, and are ther efore the equivalent of a zero 
quota for cross-border supply;  (ii) state laws that  prohibit all gambling, in combination with other 
state laws that exempt specifically authorized gambling without providing a possibility for Antiguan 
operators to obtain an authorization to supply gambling services on a cross-border basis
247, are the 
equivalent of a zero quota for cross-border supply;  (iii) several state laws or regulations explicitly 
establish numerical quotas;248  (iv) several laws or regulations  expressly grant exclusive or special 
rights to operators of domestic origin;249  (v) several state laws require the physical presence of the 
operator within the territory of the state250 and, in doing so, constitute a zero quota for cross-border 
supply. 
3.136  During the first substantive meeting of the par ties with the Panel the United States explained 
that it does not prohibit the cross-border supply of all "gambling and betting services" because it 
allows cross-border supply of services such as "odds-making" or broadcasting of horse races.  
Although Antigua does not understand what point the United States seeks to make when qualifying its 
prohibition in such a way, this may constitute an e ffort to save its total ban from being found to be the 
equivalent of a zero quota prohibited by Article XVI.  Such an argument would be wrong.  If a 
Member makes a market access commitment in a sect or or sub-sector, that commitment covers all 
services that come with in that sector or sub-sector .  A Member cannot discharge its treaty obligations 
by allowing market access only for a fraction of the services covered by a sector or sub-sector while prohibiting all others.  This would make market access commitments under GATS largely 
meaningless.  More to the point, if a Member desire s to restrict market access with respect to certain 
services within a sector or sub-sector, it should,  as many Members (including the United States) 
indeed have done, set out the restrictions or limitations on access in the appropriate place on the 
Member's schedule of commitments under the GATS.  
3.137  The United States  maintains that Antigua fails to prove the inconsistency of any US 
measure(s) with GATS Article XVI.  As the Unite d States has previously explained, Article XVI 
prohibits Members that have inscribed commitme nts from maintaining or adopting six types of 
measures referred to in its paragra ph 2, sub-paragraphs (a) to (f).
251  A close comparison between 
Article XVI:2 of the GATS and its goods counterpa rt, Article XI of GATT 1994, demonstrates that 
                                                      
247 See above paras. 3.106-3.108. 
248 See above para. 3.109. 
249 Antigua notes that, for example, each of the 40 states that authorize a lottery allows only one 
operator, which then is permitted to operate a multitude  of gambling games.  Authorizations for horse race 
betting are only given to "associations that control pari -mutuel wagering services on horseracing in the United 
States" which the United States describes as a "sp ecial type of supplier" (see below para. 3.154). 
250 See above para. 3.109. 
251 The United States reiterates that, to the extent th at Antigua's claims rest on Article XVI:1, Antigua 
misconstrues that provision as a general rule requiring market access.  Article XVI prohibits only  the specific 
types of limitations on establishment listed in Article XVI:2.  WT/DS285/R 
 Page 55 
 
 
Antigua's claim that its alleged "total prohibition" is ipso facto  impermissible under Article XVI is 
incorrect.  While Article XI of GATT 1994 stat es a general rule banni ng any import or export 
"prohibition or restriction" except for a duty, tax,  or charge, Article XVI:2 of the GATS establishes no 
such general rule.  Instead, it defines, and caref ully describes, precise types of limitations that 
Members shall not maintain or adopt in committed sectors.  To prove its case as an initial matter, 
Antigua has the sole burden of proving that the United States maintains one of the precise types of 
limitations in Article XVI:2(a) to (f). 
3.138  The United States submits that Antigua's claims appear to rely on sub-paragraph (a), which 
bars the maintenance or adoption of "limitations on the number of service suppliers whether in the 
form of numerical quotas, monopolies, exclusive servi ce suppliers or the requirements of an economic 
needs test," and on sub-paragraph (c), which ba rs "limitations on the total number of service 
operations ... expressed in terms of designated numerical units in the form of quotas or the 
requirements of an economic needs test."  These provisions may be summarized as follows: 
 
Subject matter of limitation  
Prohibited form/manner of expression 
 
number of service supplie rs (sub-paragraph (a))  
"in the form of numerical quotas, monopolies, 
exclusive service suppliers or the requirements of an economic needs test" (emphasis added) 
 total number of service operations or total quantity of service output  (sub-paragraph (c))  
"expressed in terms of designated numerical units 
in the form of quotas or the requirement of an 
economic needs test" (emphasis added) 
 3.139  As the table above clarifies, paragraphs (a) and (c) each involve two explicit criteria.  First, 
the subject matter of the limitation must match the s ubject matter specified in the column on the left.  
Second, the "form"
252 of the limitation or the manner in which it is "expressed"253 must correspond to 
the detailed specifications reproduced in the column  on the right.  (Also, with respect to sub-
paragraph (c), the numerical units in question must be "designated."254)  Antigua has completely failed 
to offer the Panel the kind of precise statutory an alysis necessary to apply these requirements to US 
law. 
3.140  In fact, the subject matter of the US restri ctions on gambling mentioned by Antigua is the 
character of the activity involved, without regard to the "number of service suppliers" or the "total 
number of service operations of total quantity of service output."  For example, 18 U.S.C. § 1084 
applies to persons providing gambling services as a business.255  It says that such persons may not use 
certain facilities for certain types of transmissions.256  It does not purport to restrict the number of 
                                                      
252 The United States notes that the ordinary meaning of "form" in this context clearly refers to the 
particular way in which the limitation is manife sted, rather than its alleged effect.  See The New Shorter Oxford 
English Dictionary,  p. 1006 (defining "form" inter alia  as "shape, arrangement of parts," or "[t]he particular 
mode in which a thing exists or manifests itself," or, in linguistics, "the external characteristics of a word or other unit as distinct from its meaning."). 
253 The ordinary meaning of the verb "express" in this context is "[r]epresent in language; put into 
words" or "manifest by external signs."  See  ibid., p. 890. 
254 The ordinary meaning of the verb "designate" in this context is "[p]oint out, indicate, specify."  See  
ibid., p. 645. 
255 I.e., persons "engaged in the business of betting or wagering."  See  18 U.S.C. § 1084(a). 
256 The United States notes specifically, that th ey may not "knowingly use[] a wire communication 
facility for the transmission in interstate or foreign comme rce of bets or wagers or information assisting in the 
placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication 
which entitles the recipient to receive money or credit as a result of bets or wagers, or  for information assisting 
in the placing of bets or wagers." 18 U.S.C. § 1084(a). WT/DS285/R 
Page 56  
 
providers, operations, or quantity of output of services, much less do so in a form or manner of 
expression, or with a numerical designation, of the kind indicated in Article XVI:2 (a) or (c).  Significantly, 18 U.S.C. § 1084 does not prevent pe rsons engaged in gambling businesses from using 
wire communications facilities for other purposes.
257  This confirms that the US legislators drafting 
this provision accepted that a number of gambling service providers would continue to exist and 
operate without quantitative restraints.258  Congress only wished to require such providers to observe 
restrictions on the character of their activities i nvolving wire communications facilities.  The two 
other statutes, 18 U.S.C. §§ 1952 and 1955, also  restrict the characteristics of gambling services 
without purporting to restrict the number of provi ders, operations, or quantit y of output of gambling 
services.  Both statutes make it a crime at the federal level for gambling service providers or other 
persons to engage in activities that viol ate certain state and/or federal laws.259  In each case the 
restrictions take the form of, and are expressed as,  limitations on the characteristics of an activity; 
they do not mention, much less impose, a "numer ical quota," a "designated numerical unit," or any 
other prohibited form or ma nner of expression mentioned in  Article XVI:2(a) and (c). 
3.141  The United States reiterates that Antigua's de facto  "zero quota" claim lacks both a legal and a 
factual basis.  Legally, this claim incorrectly assu mes that Antigua's alleged "total prohibition" is 
automatically inconsistent with Article XVI:2.  As  discussed above, while such an assertion might be 
tenable under GATT Art. XI, there is no automatic  "prohibition on prohibitions" under the GATS.  
Moreover, Antigua's argument is untenable unde r the actual language of Article XVI:2, which 
requires that determinations as to the existence of a GATS-inconsistent quantitative restriction be 
based on the form, manner of expression, and designation of numerical quotas.  Factually, Antigua's 
"zero quota" claim relies entirely on its incorrect assertion of a "total prohibition" on cross-border 
supply of gambling services.  In reality, US restric tions do not preclude cross-border supply of all 
gambling services, and thus are not a "total prohibition ."  For example:  (i) persons not involved in the 
business of gambling may transmit casual or social bets by any means, provided that the transmission is permissible under state law;  (ii) pari-mutue l betting services may exchange the accounting data and 
pictures necessary to permit a racetrack outside the United States to offer pari-mutuel betting on US 
races (and vice-versa), provided that such gambling is legal in both the sending and the receiving 
jurisdictions;  (iii) suppliers of odds making and handicapping services (e.g ., handicappers of horse 
races) as well as other gambling informational servi ces may supply such services, provided that the 
form of gambling that they facilitate is legal in  both the sending and the receiving jurisdictions;  
(iv) gambling websites may (and many do) provide so-called "free play" games in which no real 
money is wagered;  and (v) any other gambling servi ce that does not consist of actual transmission of 
a bet or wager is legal to the extent stated in 18 U.S.C. § 1084(b), provided that it also does not violate 
                                                      
257 18 U.S.C. § 1084(b) ("Nothing in this section sh all be construed to prevent the transmission in 
interstate or foreign commerce of information for use in ne ws reporting of sporting events or contests, or for the 
transmission of information assisting in the placing of bets or wagers on a sporting event or contest from a State 
or foreign country where betting on that sporting event or  contest is legal into a State or foreign country in 
which such betting is legal."). 
258 The United States argues that Antigua incorrectly asserts that "the United States' prohibition applies 
irrespective of the quality or specific characteristics of the service or the service supplier" and concludes on that 
basis that "the United States prohibition is a quantitative re striction and not a qualitative restriction."  In fact, the 
application of US restrictions clearly depends on non-qua ntitative characteristics of the service and/or supplier 
(e.g., whether the services are supplied by wire communications facilities, whether they comply with sub-federal 
laws, etc.). 
259 18 U.S.C. § 1952 essentially makes it a crime at the federal level of government for violators of 
certain state or federal laws (including, but not limited to, laws pertaining to business enterprises involving 
gambling, untaxed liquor, narcotics, or prostitution) to  extend their activities into interstate or foreign 
commerce.  Section 1952 thus restricts the character of legally authorized ga mbling services to the same extent 
as the underlying laws that it enforces.  It does not,  however, limit the number of providers, number of 
operations, or quantity of output of such services.  Si milarly, 18 U.S.C. §1955 makes it a crime at the federal 
level of government to conduct a gambling business that meets specified size, duration and/or revenue 
requirements and is in violation of the law of the US st ate or other political subdivision in which it is conducted.  WT/DS285/R 
 Page 57 
 
 
state law in the US consumer's jurisdiction.  As these examples demonstrate, the United States does 
not "prohibit" cross-border supply of gambling services. 
3.142  Antigua  submits that the late effort of the United States to avoid the scope of Article XVI by 
stating that it indeed allowed certain cross-borde r "gambling and betting" services is baseless.  The 
latest US arguments on the interpretation of Article  XVI:2 are disingenuous on two accounts.  First, 
the United States interprets Article XVI:2 in a litera l, exclusively text-based way.  However, it does 
not do the same with Article XVI:1.  The text of  the latter unambiguously imposes a legal obligation 
on a Member to accord services of other Members trea tment no less favourable that that provided for 
in its Schedule.  The United States previously argued that the Panel should set aside this clear text on 
the basis of a phrase from the 2001 Scheduling Guidelines.260  In Antigua's view, if Article XVI:2 is to 
be interpreted in a purely text-based way, that shoul d also be the case for the Article XVI:1.  Second, 
the United States' textual analysis of Article XVI :2(a) is disingenuous because it is not based on the 
actual text of Article XVI but on a table summarizing  the text.  The actual text of Article XVI:2(a) 
mentions "limitations on the number of service suppliers whether in the form of numerical quotas, 
monopolies, exclusive service suppliers or the requ irements of an economic needs test" (emphasis 
added).  The United States has removed the word "whether" and reads Article XVI:2 as if its says 
"limitations on the number of service suppliers in the form of numerical quotas, monopolies, 
exclusive service suppliers (...)".  However, the fact  that the actual text contains the word "whether" 
indicates that the enumeration following it is not meant to limit the application of Article XVI:2(a) but rather to make it clear that the four forms of limitations on the number of service suppliers explicitly mentioned are in any event caught by Article XVI:2(a). 
3.143  As discussed in its response to question 9 from the Panel, Antigua's interpretation is 
confirmed by the 1993 and the 2001 Scheduling Guidelines  which state unequivocally that a 
nationality requirement for service suppliers woul d be caught by Article XVI:2(a) as equivalent  to a 
zero quota despite the fact that it does not have the form  of a numerical quota. In fact, the United 
States' interpretation would for example allow a law that explicitly provides that "all foreign services 
are prohibited" to escape the application of Article XVI, because it is not expressed in numerical 
terms.  This clearly cannot be the case. 
3.144  The United States  recalls that it would under no circ umstances concede the existence of a 
commitment.  Although the United States has rai sed Antigua's failure to provide evidence and 
argumentation as a threshold matter in this dispute, and also raises it in relation to each of Antigua's 
substantive claims.  To the extent that Antigua ma kes claims of violation based on its alleged "total 
prohibition" and fails to relate those to particular US laws and regulations, it also fails to meet its 
burden for those claims.  US previous arguments  on these issues and the alleged effect of US 
statements apply equally to the complaining party's burden under Article XVI and the other 
substantive provisions at issue.  The main issue under Article XVI appears to be the question of 
Antigua's "zero quota" argument.  The United States  has explained that such an argument cannot be 
reconciled with the text of Article XVI, which clearly refers to limita tions in the "form" of quotas, and 
so on.  A comparison between Article XVI of the GATS and Article XI of the GATT shows that the 
GATT provision contains a "prohibition on prohibitions," and the GATS provision does not.  Antigua's arguments are therefore inconsistent with the text of Article XVI. 
3.145  The United States argues that Antigua also has its  facts wrong.  In its answer to one of the 
Panel's questions, Antigua states that "during the fi nal Panel meeting of the session the United States 
once more made clear its position that the cross- border provision of gambling and betting services 
from Antigua to the United States was illegal under Un ited States law."  In fact, the United States 
stated at that time, and mainta ins, that it in fact permits some cross-border supply of gambling 
services from Antigua.  This is what the United St ates meant when saying that proving a "total 
prohibition" is an impossible task.  Previously, An tigua appeared to argue, based on its "zero quota" 
                                                      
260 See above para. 3.126, and footnote 244. WT/DS285/R 
Page 58  
 
theory, that it would take an across-the-board prohibition of all cross-border gambling services to violate Article XVI – hence its misguided effort to try to show a "total" US prohibition on cross-
border gambling services.  Since the United States in fact permits some cross-border gambling services, and since Antigua disregards the actual cont ent of US law, Antigua lacks a factual basis for 
arguing a "blanket" prohibition. 
3.146  The United States notes that Antigua now asserts that a prohibition on any fraction of the 
services covered by a sector or sub-sector would amount to a "zero quota" and would therefore be inconsistent with Article XVI:2(a) under Antigua's "zero quota" theory.
261  In other words, Antigua's 
view is that a full market access commitment mean s that nothing whatsoever subject to that 
commitment may be prohibited.  This is a signifi cant step beyond the "blanket" prohibition theory 
previously discussed by Antigua and certain third parties.262  Antigua's new argument regarding 
fractional prohibitions fails on the same textual gr ounds as its blanket prohibition argument, that is, 
Article XVI only addresses limitations that take cer tain carefully-specified forms.  Moreover, 
Antigua's fractional prohibition argument does not withstand scrutiny in light of the objects and purposes of the GATS.  Members cannot effectively ex ercise the "right to regulate" services that are 
the subject of a commitment if they lack an y power to prohibit services within a sector or 
sub-sector that do not conform to the Member's regulation.  The right to regulate recognized in the GATS implies the power to set limitations on the scope of permissible activity, as the United States has done with gambling services. 
3.147  Antigua  rejects the US argument that a Member that makes a market access commitment 
with regard to a certain sector, escapes the app lication of Article XVI if it does not maintain 
Article XVI limitations with regard to some of the services within that sector.  Antigua believes this is 
legally wrong:  the Article XVI obligation obvi ously applies to all services within that sector. 
5. GATS Article XVII
263 
(a) "Likeness" of services and service suppliers 
3.148  Antigua  argues that services and service suppliers of Antigua are "like" those of the United 
States.  The types of games offered from Antigua are the same as those offered in the United States 
and all involve the winning or losing of money.  Th e only differences are the origin of the services 
and the suppliers and the mode of supply (cross- border as opposed to comme rcial presence).  These 
differences, however, are not relevant in the cont ext of a commitment to national treatment of cross-
border supply under the GATS.   
3.149  To date, panels and the Appellate  Body have addressed the issue of "likeness" in the GATS in 
only two disputes ( EC – Bananas III  (US)  and Canada – Autos ).  In both disputes the panels accepted 
that the services and the service suppliers were "lik e" without the extensive discussion that has taken 
place in the "likeness" debate in the context of the GATT.264   In the view of Antigua, this is not a 
coincidence because the concept of  likeness will often be less important in disputes concerning trade 
in services than in disputes on trade in goods.265  In the case of trade in goods the characteristics of a 
                                                      
261 See above para. 3.136. 
262 See below para. 4.35. 
263 In addition the arguments presented here, see also parties' responses to Panel questions Nos. 16-26 
and 40-43 in Annex C of this Report. 
264 Panel Report on EC – Bananas III (US) , para. 7.322, and Panel Report on Canada – Autos , 
paras. 10.247-10.248. 
265 Antigua submits that the view that the likeness debate may be of lesser importance in services 
context than in goods context is also supported by the Appellate Body's statement in Japan – Alcoholic 
Beverages , according to which the "likeness" concept is a fl exible one that may have different meanings in 
different WTO Agreements and in differe nt circumstances: 'the concept of 'lik eness' is a relative one that evokes 
the image of an accordion.  The accor dion of 'likeness' stretches and squeezes in different places as different  WT/DS285/R 
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specific product are often inherently "locked in" to the good (for instance in a specific type of cement 
as in EC – Asbestos ).  In the case of trade in services, how ever, the characteristics of the "product" – 
the service – are intangible and often easily adaptable.266  Thus, even if services and service suppliers 
are "unlike" it will often be relatively simple to ad apt the foreign service and service supplier in order 
to make these "like" their domestic counterparts.  Of course, the regulatory system of the importing 
WTO Member must offer the foreign services and supp liers an opportunity to be or become "like."  
For example, a WTO Member cannot set up a regulatory system that is only open to domestic services 
and suppliers and then argue that all foreign ser vices and suppliers are "unlike" because they are 
unregulated.  Such an approach would sanctify a re gulatory regime that is inherently discriminatory 
and cannot therefore be compliant w ith Article XVII of the GATS.  In this respect, Antigua invites the 
Panel to exercise judicial economy in deciding whether an investigation of specific characteristics of 
various gaming services is necessary to dispose of this  dispute.  Antigua strongly believes this not to 
be the case because access to the US  market for gambling and betting services is not determined by 
the application of objective criteria to the servi ces and the service suppliers.  Even an Antiguan 
service that is identical to a service of US origin (which many – perhaps all – are) would have no 
access to the United States market simply because it is  provided from a foreign location.  This factor, 
however, can play no role in the determination of "likeness" in Article XVII because it is the specific 
purpose of Article XVII to remove different treatment solely on the basis of origin.267   
3.150  The fact that services of Antiguan gaming opera tors are supplied via a different "mode of 
supply" than services of suppliers of United States  origin (cross-border as opposed to commercial 
presence) does not make these "unlike."268  If the use of a different "mode of supply" were sufficient 
for a WTO Member to escape the obligations of nati onal treatment on the basis of "unlikeness," this 
would seriously undermine the effectiveness of the GATS.  In particular, a commitment to national 
treatment for cross-border supply would be meaningl ess because the simple fact that a service is 
supplied cross-border would make that service and its  supplier "unlike" their domestic counterparts 
and remove the national treatment obligation.  Such an interpretation is contrary to the principle of 
                                                                                                                                                                     
provisions of the WTO Agreement  are applied.  The width of the accordion in any of those places must be 
determined by the particular provision in which the term 'like' is encountered as well as by the context and the circumstances that prevail in any given case to which that provision may apply."  (Appellate Body Report on 
Japan – Alcoholic Beverages II , p. 21). 
266 William J. Davey and Joost Pauwelyn, "MFN Unconditionality:  A Legal Analysis of the Concept in 
View of its Evolution in the GATT/WTO Jurisprudence with  Particular Reference to the Issue of 'Like Product'" 
in Thomas Cottier and Petros C. Mavroidis (eds.), Regulatory Barriers and the Pr inciple of Non-Discrimination 
in World Trade Law  (The University of Michigan Press, 2000), p. 13-50, at footnote 14:  "It would seem to be 
difficult to transpose this approach to the GATS.  Sin ce most, if not all, features of services and service 
suppliers are intangible, none of them can really be said to be objectively linked to the service or service 
supplier itself." 
267 See, by analogy on Article III:4 of the GATT 1994 the Panel Report on US – FSC (Article 21.5 – 
EC) "[W]e view the principal purpose of the 'like product' inquiry under Article III:4 of the GATT 1994 as 
ascertaining whether any formal differentiation in treatment between an imported and a domestic product could be based upon the fact that the products are different – i.e. not like – rather than on the origin of the products 
involved" (para. 8.132) and "[W]e do not believe that the mere fact that a good has US origin renders it 'unlike' 
an imported good" (para. 8.133).  See also (again with  regard to Article III:4 of the GATT 1994), the Panel 
Report on India – Autos , para. 7.173-7.176. With regard to Article III:2 of the GATT 1994, see the Panel Report 
on Indonesia – Autos , para. 14.113: " ... an origin-based distinction in respect of internal taxes suffices in itself 
to violate Article III:2, without the need to demonstrate the existence of actually trad e like products" and, also 
with regard to Article III:2 of the GATT 1994, the Panel Report on Argentina – Hides and Leather , 
paras. 11.168-11.169.  With regard to the possibility to make use of hypothetical examples in the "likeness" analysis (in the context of Article III:2 of the GATT 1994), see Appellate Body Report on Canada – 
Periodicals , pp. 20-21. 
268 Note by the WTO Secretariat entitled The Work Programme on Electronic Commerce  (S/C/W/68) 
which, in para. 33 (concerning Article XVII of the GATS) st ates that: "[A]s discussed in the context of Article II 
on MFN, likeness in the national treatment context also depends in principle on attributes of the product or 
supplier per se  rather than on the means by which the product is delivered." WT/DS285/R 
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effective treaty interpretation because it renders re dundant an important part of the GATS, i.e. all 
schedules with national treatment commitments for cross-border supply.
269  
3.151  In the context of trade in goods the Appellate Body referred to four categories of 
characteristics that have been used to assess "lik eness" in the context of the GATT: (i) physical 
properties; (ii) capability of serving the same or similar end-uses; (iii) consumer perception; and 
(iv) international tariff classification.270  To the extent that a compar able analysis of characteristics 
would need to be made in the GATS context, An tigua submits that the gambling and betting services 
offered from Antigua and those offered in the Unite d States are virtually the same.  The types of 
games are the same and all involve the placing of wagers and the winning or losing sums of money. 
Consumers perceive Antiguan and US gambling services as interchangeable.271  Both Antiguan and 
US origin gambling and betting services are offere d to the public via communication technology 
including telephone and electronic co mmunication.  Finally, the international classification of services 
used in the WTO context, the CPC Prov., provides only one category for gambling and betting services.  The more recent versions of the CPC classification, CPC 1.0 and CPC 1.1 also provide for just one category for gambling and betting services.
272  To the extent that suppliers from Antigua and 
suppliers from the United States provide like ser vices, they are also like service suppliers.273 
3.152  The United States  recalls that the panel in EC–Bananas III  (US) stated that "[i]n order to 
establish a breach of the national treatment obligati on of Article XVII, three elements need to be 
demonstrated: (i) the (Member) has undertaken a commitment in a relevant sector and mode of supply; (ii) the (Member) has adopted or applied a measure affecting the supply of services in that sector and/or mode of supply; and (iii) the measure  accords to service suppliers of any other Member 
treatment less favourable than that it ac cords to (its) own like service suppliers.
274  The United States 
has already demonstrated Antigua 's failure to prove the first element – existence of a specific 
commitment in a relevant sector.  Furthermore, Antigua has ignored the second element – adoption or application of a measure affecting the supply of services in the relevant sector and/or mode – by 
failing to argue the scope or meaning of specifi c measures.  Even if these elements had been 
established, however, Antigua has also failed on the third element by proving neither how its services 
and service suppliers are "like" US services and service suppliers nor how specific US measures 
accord Antiguan services and service suppliers less favourable treatment. 
3.153  The United States submits that the burden rests on Antigua to provide evidence demonstrating 
that Antiguan services and service suppliers are " like" particular US services and suppliers for 
purposes of GATS Article XVII.
275  Antigua states that it licenses only two types of gambling services 
                                                      
269 See also, with regard to the principle of effective treaty interpretation, the Appellate Body Report on 
US – Gasoline , p. 23 and Appellate Body Report on Korea – Dairy , para. 81. 
270 Appellate Body Report on EC – Asbestos , para. 101. 
271 Antigua notes that various gambling operators of United States origin state that the cross-border 
supply of gambling and betting services is hurting their sales. See the statement by Mr. Steve Woodall, Fiscal 
Officer in Idaho (reported in The Spokesman Review  (2 February 2001); the statement by Mr. Dennis Kennedy, 
Executive Director of the Ohio Lottery, reported in David Bennett, "Lottery's pot for schools ends up short", 
Crain's Cleveland Business  (23 July 2001).  See  also the arguments put forward by the horse race betting 
industry in Florida (reported in Jim Saunders, "Video-gambling debate spins in soft economy", The Florida 
Times-Union  (28 December 2002); and the stat ement of Mr. Joe Lupo, manager of a bookmaker in Las Vegas, 
reported in Michael Kaplan, "Gambli ng in America:  A Special Report", Cigar Aficionado  (September/October 
2002), p. 66. 
272 Both CPC 1.0 (1998) and 1.1 (2002) classify "gambling and betting services" as a class (9692) and 
subclass (96920) under "Section 9 – Community, social and personal services"; "Division 96 – Recreational, 
cultural and sporting services"; and "Group 969 – Other amusement and recreational services". The different 
versions of the CPC can be consulted electronically on  http://unstats.un.org/unsd/cr/registry/regct.asp?Lg=1. 
273 Panel Report on EC – Bananas III (US) , para. 7.322; Panel Report on Canada – Autos , para. 10.248. 
274 Panel Report on EC – Bananas  III (US),  para. 7.314. 
275 Panel Report on  Canada – Autos, para. 10.289.  WT/DS285/R 
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– "virtual casino" services and sports book services, with  the former supplied by Internet and the latter 
by Internet and telephone.276  Antigua approaches its burden by first dismissing the likeness inquiry as 
hardly important in the context of services.  Anti gua essentially urges the Panel to find that in the 
context of Article XVII it is sufficient to merely  assume likeness.  Contrary to Antigua's assertions, 
nothing about the "intangible" nature of services re nders likeness a given, or an analysis of likeness 
unnecessary; services can be like or unlike one another (for example, in their manner of performance), 
and so can suppliers.  Had the Uruguay Round negotia tors not believed this, they would not have 
made likeness of services and suppliers an elemen t of the Article XVII inquiry.  According to the 
United States, Antigua itself identified, in its statem ent of facts, several different forms of gambling 
services with different characteristics.277  Yet Antigua goes on to assert for purposes of Article XVII 
that gambling services offered from Antigua are "virtually the same" as those offered in the United 
States, because "the types of games are the same and all involve the placing of wagers and the 
winning or losing [of] sums of money" and because  "consumers perceive Antiguan and United States 
gambling services as interchangeable."  These cursor y and baseless assertions ignore the important 
distinctions between different gambling and betting services.  For example, as a general matter, the 
National Research Council has found that "[t]he characteristics of game technologies, such as the 
number of gambles offered per time period, the phy sical and informational environment of games, 
game rules, speed of play, probabilistic structure, cost per play, and jackpot size, appear to affect 
gambling preferences and habits."278  Antigua has not addressed any of these factors.  Nor has it 
addressed distinctions that may be relevant in d ecisions regarding how to regulate various types of 
gambling services.   
3.154  According to the United States, Antigua also ignores potentially relevant differences in 
service suppliers.  For example, Antigua states that US state lotteries are supplied exclusively through 
state monopolies, but nowhere does it attempt to say wh at, if anything, makes its (presumably private, 
non-state) service suppliers "like" state lottery m onopolies in any sense.  Nor does it try to explain 
how its suppliers are "like" the associations that  control pari-mutuel wagering services on horseracing 
in the United States, or any other special type of su pplier in the US market.  Antigua further fails to 
address differences in the object of the bet or wager that distinguish different gambling services.  For 
example, the distinctions between selecting random  numbers, picking winners in a race or sport, 
playing a table game with gambling paraphernalia , and other forms of gambling shape consumer 
perceptions and influence the odds of winning, which determine the profitability of different forms of 
gambling.  Antigua fails to take account of such distinctions between, e.g., its sports book services 
and gambling services provided in the United States.  Indeed, Antigua actually provides evidence that 
sports betting is unlike pari-mutuel betting by ob serving that "[w]hen betting with a bookmaker a 
gambler bets against the bookmaker as opposed to betting against the other gamblers, as is the case 
with pari-mutuel betting."279 
3.155  Antigua's own evidence also demonstrates that Internet virtual casinos are unlike real casinos 
in that the true object of the bet or wager in a virtual casino is the generation by a software algorithm 
of some random number.280  This result is often presented thro ugh a visual and audio simulation of 
gambling paraphernalia such as cards, dice, wheels,  gaming boards, etc., that one would find in a 
casino.  In contrast to a real casino, however, th e online casino is an illusion – a "virtual reality" 
environment in which outcomes are controlled by a com puter rather than by the laws of the physical 
world.  The odds in virtual gambling are thus set by  manipulation of the software simulation, and bear 
no necessary relationship to the outcomes that would occur in a casino with the use of physical 
                                                      
276 See above para. 3.2. 
277 See above para. 3.1. 
278 National Research Council, Pathological Gambling: A Critical Review,  pp. 7-5 to 7-7 (1999). 
279 Ibid., see above para. 3.12.   
280 United Kingdom Department for Culture, Media & Sport, The Future Regulation of Remote 
Gambling: A DCMS Position Paper , April 2003, paras. 90, 93. WT/DS285/R 
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gambling paraphernalia.
281  Antigua also concedes major di fferences in consumer perceptions 
between real and virtual casino services.  For example, Antigua admits that the "noise and visual effects of the casino floor . . . heightens the thrill and pleasant tension" that consumers perceive in a 
real casino.
282  Its own evidence indicates that consumer perceptions are influenced by the physical 
surroundings, layout, amenities, and real-world stimuli of a real casino.283  Moreover, Antigua 
concedes that US consumers who go to real casinos  are "brought in" by "shows by major stars, 
Broadway-style musicals, revue spectaculars, and a variety of lounge acts" as well as meals and other amenities.  None of this exists in the virtual casino, in which a lone play er sits in front of a terminal in 
a home, school, office, etc.  Thus, far from proving that Internet virtual casinos are like real casinos, Antigua has actually shown the opposite to be true – in terms of consumer  perceptions, a virtual 
casino is nothing like a real casino. 
3.156  The United States submits that Antigua further disregards significant differences in scope of 
availability of different services, particularly availab ility to minors.  To the extent that they can be 
legally offered, gambling services in the United Stat es operate under intense regulatory controls that 
constrain the scope of their availability, often to a particular facility.  Moreover, there is no means to 
prevent minors from gaining access to remotely su pply gambling services comparable to the means 
available in connection with supply of gambling services in the United States.  Likewise, Antigua fails to address the law enforcement, addiction, and other risks associated with remote supply of gambling.  
These risks make Internet and other remotely supp lied gambling services quite "unlike" other forms 
of gambling.  The Appellate Body has stated in the goods context that "[w]e are very much of the view that evidence relating to the health risks associated with a product may be pertinent in an 
examination of 'likeness' under Article III:4 of the GATT 1994."
284  Similarly, in the context of 
Antigua's claims of likeness under GATS Article XVII,  the significant differential risks and concerns 
associated with gambling by remote supply, as comp ared to other gambling services, are pertinent.  
The burden rests on Antigua to show that its remotely supplied gambling services are "like" services in the United States in spite of such obvious differe nces, including, for instance, those relating to law 
enforcement and consumer protection,  protection of youth, and health.  Antigua has failed to meet this 
burden. 
3.157  Antigua  notes that third major prong of the United States' defence agai nst the claims of 
Antigua and Barbuda is its attempt to categor ise the gambling and betting services offered by 
Antiguan providers as not "like" the gambling a nd betting services provided by United States 
domestic suppliers.  The US argument is constructe d of three contentions.  First, the United States 
attempts to differentiate between various kinds of  gambling games and activities.  Second, the United 
States contends that the ownership or structure of particular service suppliers renders them "unlike."  
Third, the United States attempts to saddle cross- border gambling with regu latory, health and law 
enforcement concerns that it apparently presumes are not applicable to gambling and betting services 
provided by domestic suppliers. 
3.158  Before getting into detail on the US claims , Antigua wishes to point out some of the 
misstatements and errors contained in the United Stat es' discussion on this topic.  First, Antigua does 
not license "only two types of gambling services (…). "  In fact, Antigua provides for two types of 
gambling licenses , and a significant number of games and gambling opportunities are then furnished 
under the scope of those two kinds of licenses.  Anti gua notes that the United States labels as "cursory 
and baseless" Antigua and Barbuda's statements that gambling services offered from Antigua are 
                                                      
281 The United States submits that this situation is thus distinguishable from the situation in which 
electronic supply of a service merely represents another means of supplying the same underlying content or 
service. 
282 See above para. 3.9. 
283 Bill Friedman, Designing Casinos to Dominate the Competition: The Friedman International 
Standards of Casino Design,  University of Nevada (2000). 
284 Appellate Body Report on EC - Asbestos , para. 113.  WT/DS285/R 
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"virtually the same" as those offered by United States service providers and that "consumers perceive Antiguan and United States gambling services as inte rchangeable."  Far from being "cursory and 
baseless," Antigua's statements are supported by a number of independent sources that were cited in 
footnote 271 above.  Further, the United States asserts that Antigua "disregard[ed] significant 
differences" and "fail[ed] to address the law enforcem ent, addiction, and other risks associated with 
remote supply of gambling (…)."  The reality is th at Antigua has neither disregarded differences nor 
failed to address social issues – the United States h as simply refused to give Antigua's extensive 
discussions on the gaming industry and problems associ ated with gambling any credence, or in fact 
any reference, whatsoever.  More disingenuously , the United States assumes as a fact something 
which Antigua strongly disputes – that there are any different or more extreme "law enforcement and 
consumer protection, protection of youth and health" risks associated with cross-border (or what the 
United States prefers to call "remote" or "rem ote access") gambling and betting than with domestic 
gambling and betting in the United States.  As w ill be discussed in detail further on, Antigua's 
fundamental position is that no meaningful basis ex ists for distinguishing the services provided by 
Antiguan operators from those provided by United States operators for the purposes of the GATS. 
3.159  Antigua argues that the most serious defect in  the United States' discussion on the concept of 
"likeness" in Article XVII of the GATS is perhaps its complete lack of context.  Indeed, other than a 
reference to the Appellate Body Report in EC – Asbestos  in an (overstated) effort to establish that 
health risks can be a factor in determining "lik eness," the United States provides no framework for its 
discussion at all.  Perhaps that failure is because  in the two reported instances in which "likeness" 
appeared to have been remotely at  issue, the panels have simply concluded without elaboration that 
the services were "like."  The paucity of discu ssion on the "likeness" issue in these cases lends 
credence to the point already made by Antigua that, in the services context, "likeness" is much less of 
an issue given the ease at which services may be made "like."   
3.160  According to Antigua, the failure of the United St ates to provide the Panel with a context for 
its discussion on "likeness" may be due to the fact that  the US claim will not stand up in the face of a 
complete analysis of "likeness" on the basis of the seminal Appellate Body Report in EC – Asbestos .  
In EC – Asbestos , the Appellate Body reviewed a panel determ ination that two types of fibre and two 
types of cement incorporating two types of fibre were "like" for purposes of Article III:4 of the 
GATT 1994.  In its report, the Appellate Body, having  first thoroughly discussed some of the inherent 
difficulties in determining "likeness" and surveying the considerable body of GATT 1994 jurisprudence on the subject, proceeded to analyzed the issue under four criteria:  (i) the physical 
properties of the products;  (ii) the extent to wh ich the products are capable of serving the same or 
similar end-uses;  (iii) the extent to which cons umers perceive and treat the products as alternative 
means of performing particular functions in order to satisfy a particular want or demand;  and (iv) the 
international classification of the products for tari ff purposes.  Before applying these criteria to the 
facts in this proceeding, it is important to note va rious other helpful points that may be gleaned from 
the Appellate Body Report in EC – Asbestos .  First, in paragraph 92 of its report, the Appellate Body 
recognized that "like" products may have different  characteristics or qualities, and that important 
aspects of a "likeness" analysis include:  (i) determ ining what characteristics or qualities are important 
in assessing "likeness," (ii) determining to what degree or extent the products must share  qualities or 
characteristics to be considered "like" and (iii) deciding from whose perspective "likeness" should be 
considered.  Second, analyzing GATT 1994 language substantively similar to Article XVII:1 of the 
GATS, the Appellate Body concluded in paragra ph 99 of its report that the determination of 
"likeness" was "fundamentally, a determination about the nature and extent of a competitive relationship between and among products." 
3.161
 Returning to the four criteria applied in EC – Asbestos , Antigua and Barbuda submits that a 
"physical properties" comparison is inherently mo re problematic when dealing with a service than 
with a discrete product, particularly given the vari ous methods by which a service can be supplied.  
While the United States has not presented its "likeness" discussion in the context of EC – Asbestos , 
two of the United States' themes might be applicable to these criteria:  (i) the ostensible differences WT/DS285/R 
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between Antiguan gambling and betting services and tho se of United States domestic providers that 
arise primarily because the Antiguan services are "remote" or furnished on a cross-border basis;  and (ii) the ostensible differences between Antiguan gambling and betting services and those of United 
States domestic providers that arise because the outcome of certain games offered by Antiguan operators is determined by comput er equipment and not "by the laws of the physical world".  Framed 
mostly through discussion of the superficial differences between "bricks and mortar" gaming and 
"remote" gaming, the United States' first and most elaborate argument is that cross-border supply via remote communication, in and of itself, makes An tiguan services (and its service suppliers) "unlike" 
those of domestic providers.  As e xplained above, this simply cannot normally be the case in a context 
where a Member has made a commitment to "nationa l treatment" of cross-border supply of services.  
By definition, cross-border supply requires the use of remote communication – thus if the different 
mode of supply ipso facto  results in a conclusion that services are "unlike" it would render Members' 
commitments in respect of cross border supply under the GATS meaningless.  Indeed, the United States has itself stated in a submission to  the WTO on electronic commerce that "there should 
be no question that where market access and nationa l treatment commitments exist, they encompass 
the delivery of the service through electronic means, in keeping with the principle of technological 
neutrality."
285 
3.162  Antigua and Barbuda submits therefore that, in the context of a commitment by a Member to 
national treatment of cross-border supply, there must at least be a presumption that the fact that the 
services are provided by cross-border supply cannot, standing alone, make a service "unlike" a domestically provided service.  Antigua agrees that in certain specific circumstances a service could 
be considered "unlike" only because it is supplied on a cross-border basis.  However, in line with 
Antigua's reasoning above, and the position expressed by Japan in its third party submission, Antigua 
and Barbuda believes that it is for the United St ates to rebut what should be an assumption of prima 
facie  "likeness" of services supplied on a cross-borde r basis.  Antigua does, however, disagree with 
Japan when it submits that cross-border supply can be considered "unlike" domestic supply simply 
because the regulatory circumstances are different.  As the European Comm unities observes, this 
would make commitments on cross-border supply meaningless because regulatory circumstances will almost always be different for cross-border supply.  Or, as in Antigua's case,  a Member could simply 
refuse to accept another Member's regulatory schem e or refuse to allow the other Member's service 
suppliers to qualify under its own regulatory scheme.  Furthermore, this approach would conflict with 
the approach adopted by the Appellate Body in cases such as US –  Gasoline.   In a further attempt to 
brand the Antiguan gambling and betting services as "unlike" those of United States providers, the 
United States cites certain law enforcement and hea lth concerns to assert that cross-border supply of 
gambling and betting services via remote communication is sufficiently "unlike" United States domestic gambling and betting to re quire radically different treatment under the GATS.  As the 
Appellate Body in EC – Asbestos  considered "health ri sks" associated with a product as part of its 
"physical properties," Antigua will do so in this dispute as well. 
3.163  Antigua notes that the primary "concerns" of th e United States in this respect appear to be 
(i) the risk of under age gambling; (ii) the risk of  increased pathological gambling; (iii) the risk of 
abuse of non-domestic service providers for money la undering purposes; and (iv) the heightened risk 
of crime, fraud and related consumer protection i ssues.  Antigua notes initially that the United States 
fails to substantiate its statements  about the "differences" in the natu re of these risks in the context of 
"remote" gaming as opposed to domestic gaming.  The scant traces of "evidence" submitted by the 
United States on this point should never be enough to justify a distin ction between services for the 
purposes of Article XVII of the GATS.  In paragraph 114 of its report in EC – Asbestos,  the Appellate 
Body noted that it was particularly important for panels to focus on physical properties of products 
that are likely to influence the competitive relations hip between products in the marketplace.  In that 
case, the Appellate Body determined that the very real  health risks inherent in the physical properties 
                                                      
285 Work Programme on Electronic Commerce , Submission by the United States, WT/GC/16 
(12 February 1999).  WT/DS285/R 
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of asbestos fibres would clearly affect the competitive position of the product in the marketplace, as, given a choice between two otherwise similar pr oducts, it was logical to conclude that most 
consumers would prefer a non-carcinogenic product  over a competing product that is a proven 
carcinogen.  Under this analysis, Antigua and Ba rbuda believes that the supposed regulatory and 
health risks referred to by the United States in this proceeding have a materially different impact in 
this case than did the health risks at issue in EC – Asbestos .  In particular, the factors raised by the 
United States cannot in any material respect influen ce the decision of a consum er to use the services 
of a licensed and regulated Antiguan provider ov er those of a licensed and regulated domestic 
United States provider – and indeed, the fact th at so many United States consumers do use the 
services of Antiguan gaming companies confirms that these concerns are not relevant from the 
perspective of the consumer.  The possible law en forcement and health concerns raised by the 
United States are the concerns of the authorities, not of the individual gambler, and consequently 
cannot influence the consumer's decision.  If these law enforcement or regulatory concerns were to 
have a place in this case, it would be in the context of Article XIV of the GATS.  Indeed, in its report 
in EC – Asbestos  the Appellate Body explicitly made this point when it stated in paragraph 115 that 
(original emphasis): 
"Under Article III:4, evidence relating to h ealth risks may be relevant in assessing the 
competitive relationship in the marketplace between allegedly "like" products.  The 
same, or similar, evidence serves a di fferent purpose under Article XX(b), namely 
that of assessing whether a Member  has a sufficient basis for 'adopting or enforcing' 
a WTO-inconsistent measure on the grounds of human health." 
3.164  Article XX(b) of the GATT 1994, of course, is fundamentally the same as Article XIV of the 
GATS.  The United States, however, has not raised  an Article XIV defence in this proceeding. 
3.165  Antigua notes that the United States' second argument concerning physical properties seems 
to be that, in the random selection games offere d by Antiguan operators, the random selection is 
performed by software and not by the laws of the physical world.  This distinction only relates to 
random selection games and not to sports betting or  card games, which presumably the United States 
is not attempting to distinguish on this basis.  In its discussion, the United States fails to mention that 
in the case of almost all random selection games offe red in the United States, the random selection is 
performed by a machine – not exactly the "laws of the physical world."  This includes lotteries, 
gambling machines and table games such as roulette .  Some gambling machines legally available in 
the United States are mechanical (for instance traditional slot machines, although an increasingly 
large number of "traditional" slot machines are in  fact computers with a mechanical façade over 
them), others are electronic (for instance video lotte ry terminals and video poker and other card game 
terminals).  In fact, gamblers in the United St ates will often not know whether the machine that 
performs the random selection is electronic or mechani cal.  Clearly, it is not possible to differentiate 
in any material, meaningful way between US and Antiguan gambling on this basis.  More 
importantly, Antigua's evidence, and the popularity of remote gambling in the United States 
demonstrates that this alleged "physical differe nce" in the operation of the various games has no 
impact on consumer preferences and no impact on the competitive position of cross-border gambling service providers vis-à-vis domestic service pr oviders, nor has the United States submitted any 
evidence to indicate that consumers care one bit wh ether a machine delivers its result electronically or 
mechanically.  Thus Antigua concludes that the United States has not submitted arguments or 
evidence sufficient to support a conclusion that  United States and Antiguan gambling and betting 
services are "unlike" due to diffe rences in "physical properties." 
3.166  Turning to the second and third criterion elaborated in EC – Asbestos, what the Appellate 
Body summarised in paragraph 117 of its report as "end-uses" and "consumers'  tastes and habits," 
Antigua considers the two criteria toge ther, which the Appellate Body in EC – Asbestos considered 
particularly important because they "involve certa in of the key elements relating to the competitive 
relationship between products (…)."  Evidence from independent sources already submitted by WT/DS285/R 
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Antigua (see footnote 271) shows that consumer s in the United States do switch between gambling 
and betting services offered domestically and gamb ling and betting services offered on a cross-border 
basis via remote communication.  This evidence clearly indicates that the two methods of service delivery do in fact compete with each other.  The United States' admission that there is "explosive 
growth" and a "dramatic increase"
286 in such gambling further confirms this.  Antigua and Barbuda 
believes that no one would dispute that:  (i) the se lling of music over the Internet competes with the 
selling of music in "brick and mortar" stores;  (ii) the delivery of specialized news services over the Internet competes with paper based delivery of such services;  and (iii) the selling of books, wine, cars 
or other products via the Internet or mail-orde r catalogues competes with the selling of these products 
in "brick and mortar" establishments.  In all these ca ses it is clear that the "brick and mortar" and the 
Internet based business model compete because they are capable of "serving the same or similar end-
uses" and are perceived as interchangeable by c onsumers.  There is no reason why this would be 
different for gambling services and suppliers of su ch services, nor has the United States offered any 
evidence of any such difference. 
3.167  Antigua notes that the United States alleges th at the two methods of delivering the gambling 
and betting services at issue here should be viewed differently than the examples just cited because 
"brick and mortar" casinos use marketing techniques such as shows by popular stars, free meals and 
audiovisual effects to attract customers which cross- border suppliers can not offer. This is irrelevant 
because it concerns marketing techniques and not the service or the service supplier.  What is important here is, as the Appellate Body recalls in EC – Asbestos
287, that some characteristics may be 
meaningful and others not when dete rmining whether things are "like."  For instance, while there may 
be a number of superficial distinctions between th e way a slot machine might look in a casino versus 
how a computer generated slot machine looks at a computer terminal, both involve an individual, frequently sitting alone, engaging in unsupervised gambling activity. The mere assertion by the United States that the Antiguan games and services ar e "different" from those of domestic providers is 
simply no evidence.  Further, the United States offers no evidence that the supposed "differences" 
have any impact on the "end-use" of the services or  "consumer tastes and habits."  Antigua, on the 
other hand, has shown that the offerings do comp ete with each other for consumer attention. 
3.168  Antigua notes that the United States cites various  "differences" but then fails to indicate that 
the putative difference has any probative effect what soever.  For example, the United States says (see 
above paragraph 3.154) "[I]ndeed , Antigua actually provides evidence that sports betting is unlike 
pari-mutuel betting by observing that '[w]hen betti ng with a bookmaker a gambler bets against the 
bookmaker as opposed to betting against the other gamble rs, as is the case with pari-mutuel betting.'"  
But after making this point, the United States fails to demonstrate or even allege that a gambler cares 
whether he or she is betting against a bookmaker or  other gamblers.  In light of the foregoing 
discussion, Antigua and Barbuda submits that on the basis of their capability of serving the same or similar end-uses and on the basis of consumer pe rception Antiguan and United States gambling and 
betting services must be considered "like" for purposes of GATS Article XVII. 
3.169  The fourth and final criterion for "likeness"  considered by the Appellate Body in EC – 
Asbestos is the tariff classification of the product.  In the context of this dispute,  this would equate to 
the classification of the offered services under W/120 and the CPC.  As Antigua has already 
established, W/120 and the CPC both provide for just  one category applicable  to gambling and betting 
services.  This is particularly important given the comprehensiveness of the CPC and the huge number 
of categories delineated under it.  Having reviewed, at quite some length, the applicability of the EC – 
Asbestos  methodology on "likeness" to the facts in this dispute with the United States, Antigua is 
brought to the inevitable conclusion that the An tiguan gambling and betting services are "like" those 
offered by United States suppliers for purposes of the GATS. 
                                                      
286 See above para. 3.15. 
287 Appellate Body Report on EC –  Asbestos,  para. 92.  WT/DS285/R 
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3.170  Concerning the issue of "like service supplie rs", Antigua notes the US argument that 
Antiguan service suppliers are not "like" certain service suppliers of United States origin, namely 
state-owned lotteries, "associations controlling pari -mutuel wagering services" or "any other special 
type of supplier in the US market."  With regard  to this issue Antigua and Barbuda agrees with the 
European Communities that the ownership of a servi ce supplier can play no role in determining the 
"likeness" of service suppliers.  To hold otherwise would be contrary to the principle of effective 
treaty interpretation, as it would make it very easy for WTO Members to circumvent Article XVII of the GATS by only giving authorizations to so-calle d "special" domestic operators such as state owned 
companies.  This would largely nullify the effect of the GATS in sectors such as telecommunications 
and postal services, where Members often maintain  state monopolies.  If such was the case, even 
Members with full commitments on market access and national treatment could simply and 
effectively prevent all forms of competition from ot her Members.  In addition, Antigua cannot see 
how the United States can argue that it does not violate Article XVI and, in the context of 
Article XVII, justify its refusal to give Antiguan op erators an authorization on the basis that it only 
gives authorizations to "special" operators of domestic origin.  Surely a Member cannot 
simultaneously argue that, on the one hand, it does not maintain monopolies and exclusive rights and 
therefore does not violate Article XVI, and that, on the other hand, foreign operators cannot be given 
a licence because they are unlike th e "special" operators of domestic origin that have been given a 
licence.  On a more basic level, there is simply no thing in evidence to indicat e that consumers care at 
all about the legal structure or identity of the pr oviders of "like" gambling services, and it is quite 
possible that the "likeness" of service providers has little functional relevance in this case.  In similar 
circumstances, the Appellate Body, in paragraph 7.322 of its report in EC – Bananas III simply 
concluded that "to the extent that entities provide these like services, they are like service providers." 
3.171  While Antigua and Barbuda firmly believes th at the issue of "likeness" is properly and 
conclusively resolved in its favour, it also thinks  that the United States has raised some tangential 
issues that should be addressed.  In particular the United States refers to differences in game 
characteristics such as the rules of the game.  Howe ver, the United States makes no attempt to explain 
how, on that basis, it could po ssibly make a distinction between  gambling services of Antiguan and 
United States origin.  Not all differences – to the extent that they actually are  differences – can justify 
different treatment under an international trade treaty (let alone radically different treatment).  A red 
car is undoubtedly "unlike" a blue car in one respect , namely its colour.  This does not allow however, 
different treatment under WTO law.  Given the need for "remote" gambling and betting service 
providers to compete effectively against domestic opera tors, in most cases significant effort is made to 
create game play and "feel" as similar to domestic offerings as possible.  In this respect, Antigua and Barbuda submits that it is unaware of any pr oduct offering by its ga mbling and betting service 
suppliers that has no clear counterpart in the gam es offered by domestic suppliers in the United States. 
3.172  In this context it is also important for the Pane l to keep in mind that the debate on likeness in 
this case does not take place in a context of an au thorization system in the United States based on 
objective, qualitative criteria – a context one woul d perhaps normally expect in an Article XVII 
debate.  Antiguan gambling services are not prohibited in the United States because of specific game 
rules or other specific characteristi cs, and they cannot become legal by adapting game characteristics 
to objective, qualitative criteria.  They are pr ohibited because they are supplied from abroad. 
Consequently, specific game characteristics are irreleva nt to this dispute because whatever they are, or 
could become, under the United States legal schem e cross-border Antiguan gambling services of any 
kind – even if completely identical in every wa y to United States domestic services – would still be 
prohibited. 
3.173  Turning to law enforcement and health concerns , Antigua submits that, as is true with the 
"differences" in the various games or services provided by Antiguan gami ng operators over those 
provided by United States operators , Antigua and Barbuda believes that its earlier discussion in the 
context of EC – Asbestos fully addresses the relevant impact of law enforcement and health concerns 
in making a "likeness" determination.  However, the numerous unfounded a llegations of the United WT/DS285/R 
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States with respect to law enforcement and health  issues should be addressed specifically in more 
detail.  As noted earlier, the United States' concerns seem to be in four distinct areas:  (i) under age 
gambling;  (ii) pathological gambling;  (iii) mone y laundering;  and (iv) organized and other crime, 
fraud and consumer protec tion concerns.  From the outset, Antigua observes that the United States 
does not provide any evidence in its  first submission that any of these concerns are particularly 
associated with the cross-border provision of  gambling and betting services from Antigua and 
Barbuda.  Nor does the United States counter the su bstantial evidence submitted by Antigua that is 
expressly to the contrary.  Antigua will show not on ly that there is no evidence of any pathologies or 
other problems associated with cross-border gamb ling services different than those historically 
associated with gambling in general, but also th at there is no evidence that cross-border gambling 
results in higher levels of pathologies or great er law enforcement risks than domestic gambling. 
3.174  Antigua submits that, in analysing youth gamblin g issues, it is important to note that both 
Antigua and Barbuda and the United States set mi nimum legal ages for gambling.  Unlike Antigua 
and Barbuda however, which strictly  prohibits gambling by those younger than 18 years of age, the 
United States permits youths under the age of 18 to  gamble on charitable games such as bingo or pull 
tabs in approximately 19 states, either alone or in the presence of their parents.
288  The United States 
avers in paragraph 3.18 that "remote" access gami ng poses an unacceptable and unmanageable risk of 
under age gambling, but not surprisingly it provides no evidence to support this statement.  The only material concerning under age gambling it does  refer to, does not relate to remote access gaming.  In 
fact, numerous investigations have shown the exis tence of under age gambling in the United States 
but these all concern conventional gambling opportun ities offered by operators inside the United 
States.  The NGISC reports: 
"Although illegal in every state, the sale of lottery tickets to minors nevertheless 
occurs with a disturbing frequency.  For example, one survey in Minnesota of 15-to 18-year-olds found that 27 per cent had purchased  lottery tickets.  Even higher levels 
of 32 per cent, 34 per cent, and 35 per cen t were recorded in Louisiana, Texas, and 
Connecticut, respectively.  In Massachuse tts, Connecticut, and other states, lottery 
tickets are available to the general public  though self-service vending machines, often 
with no supervision regarding who purchases th em.  Thus, it is not surprising that a 
survey conducted by the M assachusetts Attorney General's office found that minors 
as young as 9 years old were able to purch ase lottery tickets on 80 per cent of their 
attempts, and that 66 per cent of minors were able to place bets on keno games.  
Seventy-five per cent of Massachusetts hi gh school seniors report having played the 
lottery."
289 
3.175  Antigua and Barbuda is not aware of any inves tigation that has found under age participation 
in remote access gambling to be a significant probl em.  The obvious reason for this is that remote 
access gambling requires the use of financial instruments such as credit cards which are not generally 
available to minors.  Because of this significant prac tical hurdle, the legally sanctioned, cash intensive 
forms of gambling available in the United States ar e a much more attractive option for the under age 
gambler.  The United States further argues that preventing under age use of remote access gambling is not feasible, and asserts, in paragraph 3.25, th at "[C]hildren have ready access to payment 
instruments, and no technology has yet been devel oped to enable constraints on Internet gambling 
even approaching those that are possible in othe r settings where gambling can be confined and access 
to it strictly controlled."  It is difficult to see, how ever, how any age restriction system could be less 
effective than the situation descr ibed in the paragraph from the NG ISC on under age lottery playing.  
Particularly troublesome to Antigua and Barbuda in  the face of the United States' allegations in 
respect of minors' access to payment instruments and lack of control technology is the fact that  the 
                                                      
288 Table 1 from I. Nelson Rose, "The United States: Minimum Legal Age to Place a Bet," Futures at 
Stake: Youth, Gambling and Society , Howard J. Shaffer, ed., University of Nevada Press (2003). 
289 NGISC Final Report, 18 June 1999, pp. 3-4.  WT/DS285/R 
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United States has recently adopted legislation that aims to protect minors from harmful content on the 
Internet by expressly providing that on-line merchants can be protected against claims of violations of 
the legislation by using credit cards as an exclus ive means of payment in order to prevent access by 
minors to harmful content such as pornography.290  The United Kingdom also makes use of the fact 
that payment systems such as credit cards are not available to minors to prevent under age use of 
remote access gambling facilities.291 
3.176  Regarding pathological gambling, Antigua notes that, in 2001, a group of  seven eminent 
experts in the psychology of gambling, including  Dr. Howard Shaffer of Harvard University (who is 
quoted by the United States) published a seminal editorial in the Journal of Gambling Studies .  The 
editorial was an appeal to the scientific community researching gambling behaviour to adopt a more 
serious and "scientific" approach when making stat ements about the impact of gambling.  In the 
Article they stated that "[I]mmature fields lik e gambling studies also prov ide the opportunities for 
quasi-scientists and even charlatans to influence the public, policy makers and perhaps themselves to 
thinking that their "evidence" supports a particul ar treatment, causal relationship or public policy."292 
In this respect Antigua notes that the United States submits, in paragraph 3.18, that gambling websites 
have been designed to resemble video games and ther efore are especially attractive to children.  This 
conclusion is based on a statement of the executive vice president of the National Football League 
who, presumably, is a football expert, not a ps ychologist who studies gambling behaviour.  In any 
event none of the games offered from Antigua and Ba rbuda are designed to resemble video games in 
order to attract children. 
3.177  Antigua and Barbuda has extensively surveyed literature associated with problem gambling, 
and has been unable to find any discernable body of  scientific evidence to support the assertion of the 
United States that remote access gambling is any more problematic than other forms of gambling when it comes to compulsive, problem or other form s of pathological gambling.  However, to better 
substantiate its findings, Antigua and Barbuda engaged the services of internationally recognized 
experts in the field of pathological gambling to advi se with respect to evidence of particular problems 
associated with remote (and in particular, Internet ) gambling.  These experts confirmed the results of 
Antigua's own research, and in fact each has pointed  out some areas in which Internet gambling may 
present fewer risks associated with problem gambling than "brick and mortar" gambling.
293 
3.178  Antigua submits that, concerning money la undering, the United States makes, in 
paragraph 3.16, the unsubstantiated statement th at "[r]emote supply gambling businesses provide 
criminals with an easy vehicle for money laundering (…)."  It further submits that "[t]he industry is 
far more cash-intensive than conventional forms of telephone or Internet commerce, yet it lies outside 
the special regulatory and monitoring structures deve loped for financial services."  And it concludes, 
in paragraph 3.25, that "Antigua's attempts to  regulate gambling and money laundering cannot address 
basic concerns relating to remote supply of gamb ling."  The alleged insufficiency of Antigua and 
Barbuda's anti-money launde ring measures is not explained further.  The United States simply states it 
to be so, and in so doing ignores the fact that in ternational bodies such as the Financial Action Task 
Force (or "FATF") and the Caribbean Financial Acti on Task Force have recognized the effectiveness 
of Antigua's anti-money laundering legislation.  The United States even ignores the fact that it has itself lifted a so-called "Financial Advisory" in relation to money launderi ng that it had imposed on 
                                                      
290 "The Child Online Protection Act", 47 United States Code Ann. §231. 
291 United Kingdom Department for Culture, Media & Sport, The Future Regulation of Remote 
Gambling:  A DCMS Position Paper   (April 2003), para. 43. 
292 Howard J. Shaffer, Mark Dickerson; Jeffrey Derevensky, Kenneth Winters, Elizabeth George, 
Marvin Karlins, Walter Bethune (eds.), Considering the Ethics of Public Claims:  An Appeal for Scientific 
Maturity , Journal of Gambling Studies, Vol. 17. No. 1 (2001), p. 1. 
293 Prof. Mark Griffiths & Dr. Richard Wood, Is Internet Gambling More Addictive and/or Problematic 
Than Other Forms of Gambling? , The International Gaming Research United, Division of Psychology, 
Nottingham (UK), October 2003 (document submitted by Antigua to the Panel). WT/DS285/R 
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Antigua and Barbuda in 1999.  This Financial A dvisory advised financial institutions to give 
"enhanced scrutiny to all financial transactions routed into or out of Antigua and Barbuda."
294  I n  
2001, the United States considered this no longer necessary due to regulatory changes in Antigua and 
Barbuda and lifted the Financial Advisory.  In doing so, it made no exemption for gambling and 
betting transactions.  Furthermore, the United Stat es' explanation as to why remote supply gambling 
businesses provide criminal enterprises with an easy vehicle for money laundering lacks credibility.  
The United States seems to argue that money can  be laundered by placing it in a gambling account, 
losing a small amount of it and requesting repaym ent of the balance (which would apparently 
somehow make the original source untraceable).  Not only do Antigua's Gaming Regulations require 
that winnings be paid back to the same bank acc ount or credit card from which the stake was paid, 
they also prohibit funding accounts with cash.  Furt her, the use of credit cards and other financial 
instruments leaves a large and traceable electronic footprint.   
3.179  Antigua notes that, in footnote 72, the United States also refers to money laundering methods 
allegedly described in a report from the FATF.  However, the examples in that FATF report do not 
describe how Internet gambling can be used as  a money laundering vehicle. The FATF report 
submitted as evidence by the US does mention however , that "cash remains the major if not primary 
form in which illegal funds are generated."295  Furthermore, that report states that "traditional casino 
gambling has been confirmed as being a well us ed channel for money laundering in some FATF 
jurisdictions"296 and it mentions specific methods used in casinos in the United States involving safe 
deposit boxes.  Should there remain any furthe r doubt about the money laundering opportunities 
presented by the cash-heavy United States gambli ng business versus the non-cash gambling industry 
in Antigua and Barbuda, Antigua s ubmits a copy of a recent press Article describing how a major Las 
Vegas casino that has a representative in Tokyo ha d been facilitating the money laundering efforts of 
a member of a Japanese organized crime syndicate.297  The presence of cash transactions in a 
gambling operation is key to its attractiveness fo r money laundering.  And because remote access 
gambling in Antigua makes no use of cash at all, it  is simply not attractive for money laundering.  
This is confirmed by the GAO which reported the foll owing findings from its investigation on Internet 
gambling: 
"Banking and gaming regulatory officials did not view Internet gambling as being 
particularly susceptible to money launde ring, especially when credit cards, which 
create a transaction record and are subject to relatively low transaction limits, were used for payment.  Likewise, credit card and gaming industry officials did not believe 
Internet gambling posed any particular risks in terms of money laundering. (…)  In 
general, gaming industry officials did not believe that Internet gambling was any 
more or less susceptible to money laundering than other electronic commerce businesses and noted that the financial i ndustry – which is responsible for the 
payments system – is better suited to monito ring for related suspicious activity in the 
area than the gaming industry itself."
298 
3.180  Antigua notes that the United Kingdom, which has spent considerable  time and effort 
studying the feasibility of Internet gambling, also tak es the view that "there appears to be a paucity of 
proof" that money laundering through Internet gambling sites is "a significant problem" and that "[i]t 
                                                      
294 United States Department of the Treasury – Financial Crimes Enforcement Network, FinCEN 
Advisory , Issue 11 (April 1999). 
295 Financial Action Task Force on Money Laundering, Report on Money Laundering Typologies, 
2000-2001  (1 February 2001), para. 39. 
296 Ibid., para. 37. 
297 "Las Vegas Casinos Named in Arrest – Money La undering Involving Japan Loan Shark Alleged", in 
reviewjournal.com  (14 November 2003), at http://www.revie wjournal.com/lvrj_home/2003/Nov-14-Fri-
2003/news/22583394.html.  
298 United States General Accountin g Office, GAO Report, p. 37.  WT/DS285/R 
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is safe to say that gambling transactions complete d online can be more secure than cash business 
conducted in traditional gambling outlets."299 
3.181  Concerning crime, fraud and consumer prot ection concerns, Antigua notes that, in 
paragraph 3.15, the United States levels the allega tion that "[l]aw enforcement authorities in North 
America have seen evidence that or ganized crime plays a growing part  in remote supply of gambling, 
including Internet gambling."  In the same paragr aph, the United States quotes a government official 
as saying that "[w]e have now seen evidence that orga nized crime is moving into Internet gambling."  
However, in neither case does the United States bother to  share any of this "evidence" with the Panel, 
and characteristically its claims about organized  crime involvement in Internet gambling are 
completely unsubstantiated.  The United States conti nues, in paragraph 3.17, to make unsubstantiated, 
largely irrelevant statements about possible fraud ri sks that may be associated with the provision of 
cross border gambling services.  However, Antigua and Barbuda fails to see the relevance of fraudulent lotteries in the context of this disput e, nor does it see any support for the United States' 
claims that the "potential for fraud is heighten ed when gambling opportunities are supplied from 
remote locations."  Antigua notes in particular that, in the "Top 10 Consumer Fraud Complaints" 
submitted as evidence by the United States (which is not specific to electronic commerce), the 
category "Prizes, Sweepstakes & Lotteries" ranks seventh with four per cent of all complaints.  This is 
behind:  Internet auctions at 13 per cent;  Internet services and computer complaints at six per cent;  advance-fee loans and credit protection at five pe r cent; and shop-at-home and catalogue sales at four 
per cent.  Although Antigua questions the releva nce to this dispute of  "prizes, sweepstakes and 
lotteries," in the "Top 10 List" such activities are ranked just before:  business opportunity and work-
at-home plans at three per cent; and telephone servi ces and health care at two per cent each.  While 
Antigua and Barbuda does not take law enforcement and health related issues lightly, the fact of the 
matter is that these concerns are applicable to ga mbling and betting in genera l and indeed to a large 
number of other economic activities, not simply to cross-border or "remote access" gambling and betting.   And, just as the United States has chosen  to do, Antigua and Barbuda has determined that 
these risks and concerns, to the extent present at all, can be acceptably minimised through effective 
regulation. 
3.182  The United States  reiterates that Antigua has failed to prove the fundamental premises that 
its services and service suppliers are "like" US services and service suppliers, and it has not shown 
how specific US measures accord Antiguan services a nd service suppliers less favourable treatment.  
The differences between the views of Antigua and the United States flow from a fundamental 
difference in their respective understandings of the pr inciple of national treatment.  Antigua appears to 
claim that a cross-border commitment for gambling services would mean that allowing any domestic gambling opens the door to all forms of cross-borde r gambling, regardless of likeness of services or 
service suppliers.  If one applied this novel view of  national treatment to the medical services example 
above, it would mean that so long as certain domestic  doctors are allowed to diagnose certain patients 
under limited circumstances within a Member's territo ry, all cross-border doctors  must be allowed to 
diagnose all patients by telephone or Internet throug hout that Member's territory.  The United States 
takes a very different view.  A cross-border commit ment for national treatment entitles the provider of 
another Member to offer services only to the extent  that like domestic suppliers can offer the like 
services.  That simply means that where domestic doctors cannot diagnose patients over the telephone 
or by other means of remote s upply, neither can foreign doctors. 
3.183  The United States submits that, after a cursory treatment of the issue of likeness of services 
and service suppliers in its first submission, Antigua has more recently adopted the strategy of trying 
to reverse its burden of proof by asserting that "t he United States has not submitted arguments or 
evidence sufficient to support a conclusion that the United States and Antiguan gambling and betting 
                                                      
299 United Kingdom Department for Culture, Media & Sport, The Future Regulation of Remote 
Gambling:  A DCMS Position Paper , April 2003, paras. 69-70. WT/DS285/R 
Page 72  
 
services are 'unlike.'"
300  Antigua is again trying to ignore the complaining party's burden of proof in 
WTO dispute settlement proceedings.  Antigua is the party asserting a violation of Article XVII, 
therefore Antigua alone bears the burden of provi ding evidence and argumentation proving likeness.  
Past panel and Appellate Body reports provide  little detailed discussion of the legal issues 
surrounding likeness of services and suppliers, but the b asic framework for such an  analysis is clear.  
A panel assessing likeness must make a case- and fact-s pecific analysis of the particular services and 
suppliers at issue.  In doing so, the panel must  examine the characteristics of the allegedly like 
services and suppliers.  These characteristics are not defined in the text of the GATS, and vary on a 
case-by-case basis.  To engage in this analysis, this  Panel must first identify the services and suppliers 
it is comparing.  Antigua has described the typ es of services and suppliers it licenses as Internet 
"virtual casinos" and Internet and telephone  sports betting ("sports book") operators.301  The Panel's 
task therefore appears to be to determine whether Antigua has in the first instance established that its 
Internet "virtual casino" services and suppliers are "like" US non-remote gambling services and 
suppliers, and whether Antigua's Internet and tele phone sports book services and suppliers are "like" 
sports book services and suppliers in  the State of Nevada (the only part of the United States where 
such services are allowed). 
3.184  The United States disagrees with Antigua's suggestions that the Panel must examine 
characteristics that relate to the "end use" of a servi ce or "consumer tastes a nd preferences" regarding 
that service, including consumer preferences and th e "physical" characteristics of the service.  
Contrary to Antigua's argument, these are by no  means the only factors to consider in a GATS 
likeness analysis.  As discussed belo w, likeness in the context of this particular dispute depends more 
heavily on the regulatory characteristics of services and suppliers.  Assuming arguendo  that consumer 
perceptions nonetheless play a role in a GATS likeness analysis, a full analysis of the characteristics 
relevant in shaping consumer perceptions wei ghs strongly against a finding of likeness between 
virtual and real gambling. 
3.185  The United States submits that remote gambli ng has different consumers.  Antigua's own 
evidence shows that Internet gambling services have different customer bases than other gambling 
services, as reflected by Bear Stearns' conclusion that "Internet gamers are generally not the same customer as land-based gamers."
302  Indeed, Internet gambling site s tend to attract gamblers who do 
not consume other forms of gambling, partly by virtue of the ability to indulge in gambling in 
seclusion without the stigma or effort requi red to go to a public gambling facility.303  Most telling of 
all is the fact that Antigua's ow n consultants unequivocally state that Internet gamblers are different 
from other gamblers in terms of "financial stabili ty, motivation, physiological effects, need for 
acknowledgement, and social facilitation."304  Besides, Antigua itself concedes that a virtual casino is 
                                                      
300 See above para. 3.165. Antigua's comments on the issu e of likeness consisted of an attack on what it 
described as "claims" by the United States regarding the absence of likeness.  See  above paras. 3.158 and 3.160.  
Needless to say, the only "claims" at issue regarding likeness in this dispute are the unsubstantiated claims made 
by Antigua. 
301 The United States notes that Antigua seems to take issue with this characterization, but has offered 
no alternative description of its services and suppliers fo r purposes of a "likeness" analysis.  Antigua clearly 
stated that it offers an interactive gaming license, which is "for casino-type, random selection and card games" – 
also described by Antigua as "virtual casinos" – supplie d by Internet; and an interactive wagering license, which 
is "for sports betting" supplied by Internet or telephone.  See above para. 3.2.  These services and their operators 
are the relevant Antiguan services and supp liers for purposes of a likeness analysis. 
302 Bear Stearns, E-Gaming: A Giant Beyond Our Borders , p. 55 (September 2002).  This assessment 
plainly contradicts the four anecdotal statements relied on by Antigua (see above footnote 271 and para. 3.166) for the proposition that its services are "virtually the same" as services offe red in the United States. 
303 American Psychiatric Association, APA Advisory on Internet Gambling  (16 January 2001), p. 1 
(discussing solitary nature of Internet gambling). 
304 Prof. Mark Griffiths & Dr. Richard Wood, Is Internet Gambling More Addictive and/or Problematic 
Than Other Forms of Gambling? , The International Gaming Research United, Division of Psychology, 
Nottingham (UK), October 2003 (document submitted by Antigua to the Panel), pp. 5-6.  WT/DS285/R 
 Page 73 
 
 
a mere imitation of a real casino.305  The games operate differently; while designed to resemble real 
casino games, virtual games actually consis t of betting on software algorithms.306  Antigua's own 
evidence shows that the environments virtual casi no services operate are completely different from 
those of real casinos.307  As to other forms of remotely supplied gambling, Antigua still has not 
attempted to offer specific proof of likeness.  The United States reiterates that particular forms of 
gambling have operational and supplier characteristics that sharply distinguish them from other forms 
of gambling.  The two most clear-cut examples ar e lotteries and pari-mutuel wagering, which differ 
from other forms of gambling both in terms of their operation (for example, by a common pool in the case of pari-mutuel betting) and their suppliers. 
3.186  The United States argues that in assessing  "end use" or "consumer tastes and preferences," as 
Antigua urges, the Panel should begin from the premise repeatedly asserted by Antigua – that 
gambling is a recreational service.  Assuming that to be the case for purposes of argument
308, the "end 
use" of a gambling service would be to provide recreation.  The characteristics shaping consumer perceptions of gambling services would therefore be primarily those characteristics that influence the 
recreational value of gambling activity.  Antigua's  "end-use" and "consumer perception" arguments 
thus require the Panel to determine whether the r ecreational experience provided by a virtual casino is 
similar enough to that of a real casino to make them "like services."  The United States submits that it is not.  No one would dispute that, in terms of th e consumer's experience, ser vices providing graphical 
"virtual reality" simulations that mimic such r ecreational activities as horseback riding, participation 
in sports, etc., are unlike actual participation in tho se activities.  In the context of recreational services, 
where the consumer's purpose is to purchase the recreational experience itself, the qualitative 
difference between the consumer's experience in a real setting as compared to a virtual setting 
assumes vastly greater importance than such a distin ction might have in the context of other services. 
3.187  The United States has already shown that real casinos offer a vastly different consumer 
experience than virtual casinos, and that the virtua l games do not involve the use of traditional gaming 
paraphernalia.
309  This evidence demonstrates that the sensations and environmental attributes likely 
to shape consumer perceptions of recreational value of an Internet virtual casino are no more "like" 
those of a real casino than the attributes of partic ipation in a football video game are like those of 
participation in a real football game.  And the fact ors that shape the recreational value of a virtual 
casino are worlds apart from the characteristics of a real casino.  Antigua's own consultants, Prof. Griffiths and Dr. Wood, appear to agree.  Th ey cite a litany of differences that distinguish the 
                                                      
305 Antigua states that a virtual casino "is designed to mimic land-based casino settings" and provides 
"virtual imitations of video poker terminals, slot machines and other gambling machines."  
306 Given the differences between goods and services, it may be more accurate to refer not only to 
"physical" characteristics, but also to "operational" or "fun ctional" aspects of the service.  Antigua dismisses the 
these issues as "superficial."  Such characteristics can not be dismissed as irrelevant, especially not in the 
gambling context, where they determine c onsumer's chances of win or loss (i.e. , the "price" of the gambling 
service). 
307 The United States notes that Antigua attempts to respond to this point by simply claiming that a 
person sitting at a real slot machine is having the sa me experience as a person playing a virtual slot machine 
from a home, school, etc.  As discussed below, Antigua's own evidence confirms that the consumer perception 
of the virtual setting differs greatly from the real setting. 
308 The United States reiterates that it is only assuming arguendo  the existence of a commitment for 
such services for purposes of explaining the failure of Antigua's argument.  As discussed above, gambling 
services are not "other recreationa l services (except sporting)" within  the meaning of the US specific 
commitments. 
309 See above para. 3.155.  Antigua tries to dismiss some of these differences as mere "marketing 
techniques" that have no impact on consumer perceptio ns, but overlooks the fact that the entire point of a 
"marketing technique" is to influence consumer perceptions.  Moreover, Antigua's assertion is further 
contradicted by its submission of a report stating that consumers in the U.S. perceive gambling as a diversion rather than a daily activity.  See  Bear Stearns, E-Gaming: A Giant Beyond Our Borders , (September 2002), 
p. 45.  If true, that would suggest that the qualitative di fference in consumer experience between virtual and real 
casinos is especially per tinent to US consumers. WT/DS285/R 
Page 74  
 
allegedly recreational experience of Internet ga mbling from that of traditional gambling.  For 
example, they observe that:  (i) "the 'physical' transaction of collecting winnings ... can be highly 
rewarding" – and lack of this sensation creates a "barrier" between traditiona l gamblers and gambling 
on the Internet;
310  (ii) "Internet and traditional gamblers appeared to be different in terms of 
motivation to gamble. Traditional gamblers gambled for more expressive and affective reasons than 
Internet gamblers. Traditional gamblers enjoyed gambling as a means of escape. The 'real' gambling 
environment was more conducive to satisfying th ese needs than Internet gambling in the home";311  
"[T]raditional gamblers reported gr eater physiological effects (e.g. , increased heart rate) when 
gambling compared to Internet gamblers. For instan ce, traditional gamblers re ported more feelings of 
nausea, dizziness and stomach contractions after experiencing a sizeable loss";312  "Internet gambling 
sites may not satisfy a deeper psychological need  – the need for self-esteem. Typically, gambling 
establishments have always operated in a social  environment. An important aspect of such an 
environment has been the level of social reinforcem ent that exists. ... At first sight, it would appear 
that social reinforcement is unavailable in Internet gambling, i.e. , if you win on an Internet gambling 
site, who is there to witness it?"313  All of these observations go directly to the issue of consumer 
perception.  They confirm that consumer per ceptions of Internet gambling are nothing like 
perceptions of real gambling.  Antigua's comparis on between Internet gambling and Internet sale of 
music, or sale of goods (books, wine, etc.) reinforces  the foregoing point.  In Antigua's examples, the 
consumer's end objective in using a particular service is to transact for the attainment of something – 
be it a song, a bottle of wine, etc. – that is identical or nearly identical to the product or service one could get by going to a physical facility.  In such a case, whether the shopping is done in a real or a 
virtual environment may be immaterial to the liken ess of the service supplied.  In a case where the 
consumer is buying the experience of engaging in  recreation, however, one must recognize that 
consumers will inevitably perceive the simulation of a recreational activity in a virtual environment as 
vastly different from actually experienci ng such activity in the real world. 
3.188  The United States disagrees with Antigua's asser tion that the regulatory and law enforcement 
risks inherent in a service are relevant to "liken ess" only insofar as they shape consumer perceptions 
and competitive relationships in the marketplace for services.
314  The United States also disagrees with 
Antigua's denial that virtual casinos or other form s of gambling by remote supply involve different 
regulatory and law enforcement risks than real casinos .  Regulatory distinctions are directly relevant 
under GATS Article XVII, and should be considered in  their own right – not solely through the lens 
of consumer perceptions.  The GATS explicitly reco gnizes in its preamble the "right of Members to 
regulate" services.  The "like services and supplie rs" language of Article XVII must therefore be 
interpreted in light of that object and purpose of the GATS.  Thus one must consider not only the different competitive characteristics of a service or supplier as such, but also the existence of 
regulatory distinctions between services in in terpreting and applying the likeness analysis under 
Article XVII.  Such issues have sometimes been addressed in the goods context under the rubric of 
consumer perceptions and their im pact on competitive relationships
315, but they merit independent 
consideration in the context of the GATS.  They assu me particular importance in this dispute because 
gambling is so heavily regulated.  As previously  discussed, the United States maintains and applies a 
                                                      
310 Prof. Mark Griffiths & Dr. Richard Wood, Is Internet Gambling More Addictive and/or Problematic 
Than Other Forms of Gambling? , The International Gaming Research United, Division of Psychology, 
Nottingham (UK), October 2003 (document submitted by Antigua to the Panel), p. 5. 
311 Ibid. 
312 Ibid. 
313 Ibid., pp. 5-6. 
314 See above para. 3.163, where Antigua also quotes the Appellate Body's statement in EC–Asbestos  
that "[U]nder Article III:4, evidence relating to health risks may be relevant in assessing the competitive 
relationship in the marketplace between allegedly 'like'  products."  In the servic es context, regulatory 
distinctions between services and suppliers have a significant impact on the "competitive relationship in the marketplace" between those services and suppliers, and could therefore be consider ed under that analysis. 
315 For example, the Appellate Body in EC – Asbestos  considered health dang ers in the context of 
consumer perceptions.  See Appellate Body Report on EC – Asbestos , para. 113.  WT/DS285/R 
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regulatory distinction between remo tely supplied gambling services and other gambling services, with 
the former subject to even tighter restrictions than the latter.  This distinction arises from the 
numerous distinguishing law enforcement, consumer protection, and health concerns associated with 
the remote supply of gambling.   
3.189  The United States has provided evidence showi ng that US law enforcement authorities have 
seen organized crime playing a growing role in Internet gambling.316  Antigua claims that any such 
concerns are indistinguishable from existing concer ns about organized crim e involvement in other 
forms of gambling.  The comments of a Canadian law enforcement official show why Antigua is 
incorrect, and confirm the views of US law enforcem ent.  According to a Detective Inspector of the 
Ontario Illegal Gaming Enforcement Unit: 
"Internet Gambling provides organized criminals with everything they could ever 
want from a criminal enterprise: anonymity, large amounts of cash, the ability  to control the odds, very little chance of ge tting caught, and power. Criminals gravitate 
towards money and the more fast-moving the money is, the more appealing it is."
317 
3.190  The US Federal Bureau of Investigation ("FB I") Racketeering Records and Analysis Unit 
provided the following assessment to Congress in 1999: 
"Organized crime ['OC'] groups are heavily  involved in offshore gambling.  OC 
involvement is in four different areas.  (1) Using offshore sports books as layoff sources for US based bookmaking operati ons, (2) Extending credit to finance 
offshore gambling operations, (3) Se tting up offshore gambling operations 
temporarily for the purpose of ripping off customers, (4) Setting up offshore 
gambling operations as a permanent means of income for the organization."
318 
3.191  Looking ahead, the FBI stated that "[O]ffshore gambling will become increasingly popular as 
it is legalized and accepted in more nations thr oughout the world.  Despite it's appearance of 
legitimacy, organized crime has already infiltrated the industry".319  As the foregoing comments 
suggest, while the tentacles of organized crime clearly reach many forms of gambling, remotely 
supplied gambling, and Internet gambling in part icular, raises uniquely grave concerns.  These 
include, inter alia,  the enticing new opportunities for organized crime presented by the amount of 
money and manipulability inherent in Internet gamb ling; the opportunity to use gambling by remote 
means of supply as a clearinghouse through which or ganized crime bookmakers in the United States 
                                                      
316 The United States notes that by asserting that US claims about th e involvement of organized crime 
in Internet gambling are "unsubstantiated," Antigua is apparently choosing simply to disbelieve the official 
statements of US and Canadian authorities on this issue cited in para. 3.15 above.  Nonetheless, these statements are clear.  Moreover, at a Congressional hearing on 3 October 2001, Dennis M. Lormel, who was then chief of 
the Financial Crimes Section at the Federal Bureau of Investigation, had the following discussion with a US 
legislator:   
Rep. Oxley:  I won't ask you to discuss specifics, but is the Bureau pursuing any cases that involve a 
linkage between Internet gambling and money laundering? 
Mr. Lormel:  Yes, sir.  There are a minimum of two pending investigations, as we speak, that I'm aware 
of.  It's more in keeping with our organized-crime site [s ic] of the house, which is not my area of expertise.  But 
I am -- from my prior assignment in Pittsburgh, I'm aware of a case that we actually worked in our shop out 
there. 
Rep. Oxley:  And are you pursuing any cases linking organized crime to Internet gambling? 
Mr. Lormel:  I believe so, sir, yes. Dismantling the Financial Infrastructure of Glob al Terrorism: Hearing Before House Committee on 
Financial Services, 107th Cong., p. 42 (2001). 
317 L.D. Moodie, Detective Inspector, Ontario Illegal Gaming Enforcement Unit, Gambling Law 
Enforcement Systems Issues Co nference (8 March 2002), p.18. 
318 Federal Bureau of Investigation, RRAU Analysis of Offshore Gambling (1999), p. 1. 
319 Ibid., pp. 4-5. WT/DS285/R 
Page 76  
 
can "lay off" their bets;
320 and the opportunity for organized criminals to more easily hide their 
involvement in gambling and evade law enforcemen t by operating beyond the intense scrutiny of 
regulators and law enforcement officials in the gambler's jurisdiction.321 
3.192  The United States argues that Antigua asserts that  it has enacted laws to deal with money 
laundering, but whatever the impact of Antigua's legislation, it is not relevant to the issue of the 
concerns regarding the susceptibility of remote s upply of gambling to money laundering in the United 
States.  Moreover, a September 2003 report by the US Drug Enforcement Administration ("DEA") disagrees with Antigua's assertions.  The DEA report  concludes that "Internet gambling in Antigua 
and Barbuda is sometimes used for money laundering."
322  It also states that Internet gambling in three 
other Caribbean countries raises money laundering concerns.323  Similarly, a US State Department 
report, while praising changes in Antigua's statut es, nonetheless concluded that Antigua "remains 
susceptible to money laundering because of its loosel y regulated offshore financial sectors and its 
Internet gaming industry."324  Antigua denies that the potential for fraud is heightened when gambling 
is supplied from remote locations, and again asserts  that there are no special concerns regarding 
fraudulent Internet gambling.  It is true that  many forms of gambling involve a high potential 
vulnerability to fraud and other crimes; that is  a major reason why gambling services require the 
utmost regulatory scrutiny.  But here again Antigua disregards the even greater threat when fraudulent 
gambling services operate far away from their victim s, through anonymous media, and in some cases 
subject to at best uncertain law enforcement scrutiny.   It also disregards the inherent manipulability of 
Internet gambling.  The NGISC found that "the global dispersion of Internet gambling operations 
makes the vigilant regulation of the algorith ms of Internet games nearly impossible."325  Antigua goes 
to great lengths to try to show that Internet ga mbling is no more addictive than other forms of 
gambling.  Yet ultimately it only proves the obvious proposition that the precise mechanics of gambling addiction is a novel issue on which not al l authorities agree.  The United States has already 
demonstrated that the respected American Psychiatric Association views Internet gambling as posing a special health threat, and othe r evidence corroborates that threat.
326  Whether the health threat comes 
                                                      
320 See, e.g. , Press Release, dated 4 June 2002, 17 Members and Associates of the Gambino Crime 
Family Indicted for Corruption on the New York Waterf ront, United States Attorney 's Office for the Eastern 
District of New York ("The defenda nts allegedly used off-shore wire-r ooms in Costa Rica to place tens of 
thousands of dollars in sports bets pe r week for approximately 30 bettors."). 
321 The United States notes that the latter concern was a major factor in the adoption of restrictions on 
the remote supply of gambling in the early 1960s.  At the time, long before the Internet exacerbated the 
problem, US Attorney General Robert F. Kennedy alre ady testified that "our information reveals numerous 
instances where the prime mover in a gambling or other illegal enterprise operates by remote control from the safety of another State – sometimes half a continent aw ay."  Testimony of Attorney General Robert Kennedy, 
Hearings Before the Senate Judiciary Committee on the Attorney General's Program to Curb Organized Crime 
and Racketeering, 87th Cong., 1st Sess., (1961), p. 4. 
322 Drug Enforcement Administration, The Drug Trade in the Caribbean: A Threat Assessment , 
(September 2003), DEA-03014, p. 3.  See  also See  Bear Stearns, E-Gaming: A Giant Beyond Our Borders , 
(September 2002), p. 40, (discussing Antigua and five other jurisdictions, and concluding that "although these major markets provide for some of the most lucrative and popular gaming sites on the Internet, they also provide 
for the least amount of public informati on. . . . In our view, this lack of access to information increases the risk 
profile of the region tremendously."). 
323 Ibid., pp. 12, 19, and 31. 
324 US State Department, International Narcotics Control Strategy Report: Money Laundering and 
Financial Crimes (March 2003), p. XII-87, available at http://www.state.gov/documents/organization/18171.pdf. 
325 NGISC Final Report, pp. 5-6.  Putting the point more bluntly, the Senate Committee on the 
Judiciary stated that the Committee agreed with one of the NGISC commissioners, who stated that "anyone who 
gambles over the Internet is making a sucker bet" Unlawful Internet Gambling Funding Prohibition Act and the 
Internet Gambling Licensing and Regulation Commission Act, Hearing before the Subcommittee on Crime, 
Terrorism, and Homeland Security of the Committee on the Judiciary, 108th Congress 10 (2003) (statement of 
John G. Malcom) , p. 6. 
326 For example, the American Psyc hiatric Association states that "Internet gambling, unlike many 
other types of gambling activity, is a solitary activity, which makes it even more dangerous: people can gamble  WT/DS285/R 
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from the nature of Internet play itself or simply from the added population of potential victims – including youth – reached by a medium as pervasiv e as the Internet is an interesting question for 
scientific debate, but it is not releva nt to this dispute.  Even if ( quod non ) Internet gambling is only 
equally addictive, or only half as addictive, ope ning the floodgates to legalized remote supply of 
gambling services into homes, schools, offices, etc., w ould clearly involve an enormous growth in the 
opportunity for gambling and, consequently, for gambling addiction.
327 
3.193  According to the United States, Antigua admits that the United States imposes age restrictions 
on non-remote gambling, but argues that Internet gambling poses no greater risk of child and youth gambling.  Antigua specifically denies that any of the remotely supplied gambling games offered from 
Antigua are designed to resemble video games or be attractive to children.  The United States attached 
to its second submission images of a few of the numerous child-oriented games offered on gambling 
websites licensed by the Antiguan government.  The video game presentation, cartoon-like design, and childish iconography of such games such as "Hau nted House," "Rock'n Roller," "Dinosaur Slots," 
"Alien Alert," "Goblins Cave," and "Ocean Princess" speak for themselves.
328  Antigua also argues 
that minors lack access to credit cards and other payment instruments.  The testimony of a senior 
executive of Visa (which describes itself as the world's largest consumer payment system)329 before 
the US Commission on Online Protection refutes Antigua's assertion in the clearest possible terms.  After observing that the Child Online Protection Ac t "basically assumes that only adults have access 
to a credit card or a debit card," the Visa executive testified: 
"To the contrary, it is important for the Commission to understand that this 
assumption simply is not correct. Access to a credit card or a debit card is not a good 
proxy for age. The mere fact that a person uses a credit card or a debit card in 
connection with a transaction does not m ean that this person is an adult. 
Many individuals under the age of 17 have legitimate access to, and regular use of, 
credit cards and debit cards. For example, parents may designate their child as an 
'authorized user' of the parent's credit car d or debit card.  This actually is quite 
common, particularly for credit cards.  Wh enever this occurs, the child will have 
access to the parent's credit card number or debit card number and can use that card number to access materials deemed 'harmful to minors' on the Internet. 
In addition, many children under the ag e of 17 have their own deposit accounts and 
may have access to a debit card that accesses such account.   [...] 
                                                                                                                                                                     
uninterrupted and undetected for unlimited periods of time."  American Psychiatric Association, APA Advisory 
on Internet Gambling  (16 January 2001), p.1. 
327 The United States notes that one of Antigua's own consultants has stated that "[r]esearch has 
consistently shown a positive relationship between the av ailability of gambling and both regular and problem 
gambling."  See  Mark Griffiths and Paul Delfabbro, The Biopsychosocial Approach to Gambling: Contextual 
Factors in Research and Clinical Interventions, eGamb ling: The Electronic Journal of Gambling Issues, issue 5 
(2001), available at http://www.camh.net/egambling/archive/pdf/EJGI-issue5/EJGI-issue5-complete.pdf.  See 
also NGISC Final Report, pp. 4-19 (stating that "[a]s the opportunities for gambling become more 
commonplace, it appears likely that th e number of people who will deve lop gambling problems also will 
increase."). 
328 In addition, the American Psychiatric Association st ates that "[o]ne significant hazard is that many 
online games sites – which target children and teens – have direct links to gambling sites.  Many of these sites 
offer "freebies" and other supposed discounts to get young people started."  American Psychiatric Association, 
APA Advisory on Internet Gambling  (16 January 2001), p. 2. 
329 Visa describes itself as "the world's leading payment brand and largest consumer payment system," 
with more than 396 million cards issued through U.S. financial institutions.  See 
http://usa.visa.com/personal/newsroom/?it=ss_/index.html. WT/DS285/R 
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Thus, although the [Child Online Protectio n] Act assumes that only adults have 
access to a credit card or a debit card, it is important for the Commission to understand that this assumption is simply not true.  As a result, the Commission may want to focus its attention on more suitable methods of verifying age."
330 
3.194  The same Visa executive also noted the dange r of unauthorized use of credit cards by 
minors.331  In addition, a 1999 survey conducted in the United States found that 28 per cent of 
respondents between the ages of 16 and 22 had at l east one major credit card, including seven per cent 
of the younger high school students (age 16 to 18).332  Since 1999, efforts to market credit cards to 
Americans under the age of 18 have only expanded.333  Thus Antigua's assertion that "payment 
systems such as credit cards are not available to minors" is wrong; minors do have ever-increasing 
access to such instruments, therefore the anonym ity of Internet gambling does in fact create a 
significant opportunity for under age gambling as compared to other forms of gambling that can be controlled through in-person supervision. 
3.195  Whether the foregoing law enforcement, health, and consumer protection concerns are viewed 
separately or together, it is clear that significantly different regulatory issues arise in connection with 
the remote supply of gambling by virtue of the fact  that it is supplied remotely.  The United States 
does not assert that such concerns would always est ablish a regulatory distin ction between remotely 
supplied services and non-remote services.  Likeness is  a case-by-case analysis.  Gambling is a special 
case because it is a service that is "the target of  special scrutiny by governments in every jurisdiction 
where it exists."
334  Remote supply of gambling poses a far greater danger of eluding that scrutiny, 
causing the various problems described above and th erefore requiring a regulatory distinction between 
remote supply and other forms of supply. 
3.196  The United States submits that to the extent that international cl assifications bear on the issue 
of likeness, the explanatory notes to recent servi ces classifications support the finding of a "likeness" 
distinction between remote supply of gambling and ot her forms of gambling.  For example, the most 
recent version of the CPC, version 1.1, identifies four distinct components of CPC subclass 96920, 
"Gambling and betting services."  They are (1) "organisation and selling services of lotteries, lottos, 
off track betting," (2) "casino and gambling hou se services," (3) "gambling slot-machine services," 
and (4) "on-line gambling"  (emphasis added).335  Antigua asserts that W/120 and the CPC both 
provide a single category for gambling services.  Of course, this is incorrect with respect to the W/120 categories, which do not mention gambling services.  With respect to the CPC, it is hardly surprising the provisional document referenced in the GA TS negotiating history, unlike its more recent 
successor, did not address the new phenomenon of on-line gambling.  These sources should not play a 
significant role in any likeness analysis that the Pa nel might undertake in this particular dispute. 
3.197  Antigua  submits that the United States uses much of its Article XVII discussion not only to 
develop its "remote" gambling theory but also to lay out its claims concerning "law enforcement and 
                                                      
330 Testimony of Mark MacCarthy, Senior Vice Presid ent for Public Policy, Visa U.S.A., Before the 
Commission on Online Protection (9 June 2000), pp. 3-4.  
331 Ibid., p.3. 
332 American Savings Education Council, 1999 Youth and Money Survey, available at  
http://www.asec.org/youthsu rvey.pdf, pp. 4, 11. 
333 Amit Asaravala, Why Onlin e Age Checks Don't Work, Wired News  (10 October 2002).  ("Since 
[1999], credit card companies have been making it even easier for minors to get cards in their names."). 
334 NGISC Final Report, p. 3-1. 
335 Central Product Classification Version 1.1, ST/E SA/STAT/SER.M/77/Ver.1.1, E.03.XVII.3, code 
96920.  See also International Standard Industrial Classification of all Economic Activities, 
ST/ESA/STAT/SER.M/4/Rev.3.1, E.03.XVII.4, code 9249, (with explanatory note breaking down "gambling and betting activities" into five distinct categories, cons isting of (1) "sale of lottery tickets," (2) "operation 
(exploitation) of coin operated gambling machines," (3) "operation (exploitation) of coin operated games," (4) 
"operation of gambling cruises," and (5) "operation of virtual gambling websites"  (emphasis added)).  WT/DS285/R 
 Page 79 
 
 
health considerations."   The United States uses both of these concepts to allege that Antiguan 
gambling and betting services and service suppliers are not "like" gambling and betting services and service suppliers domiciled in the United States.  Antigua stresses it does not believe there is any 
meaningful category of "remote" gambling for the purposes of this dispute.  Antiguan services are necessarily "remote" because they are furnished cros s-border, but this does not change their character 
as fundamentally gambling and betting services.  The United States complaint that Antigua wishes to 
reverse the "burden of proof" on the issue of likeness is another misstatement.  Antigua has demonstrated with considerable evidence and le gal discussion that its gambling and betting services 
are "like" those in the United States for purposes of Article XVII – and that the United States has 
failed utterly to establish the contrary. 
3.198  According to Antigua, the US argument that Antiguan so-called "remote" gambling services 
do not compete with the gambling services offered domestically by United States operators because 
"remote gambling has different consumers" is based on a statement in the Bear Stearns' report that "Internet gamers are generally not the same customer as land-based gamers."
336  But this obviously 
does not mean that "Internet based" and "land-b ased" gambling and betting services do not compete.  
It simply means that, in Bear Stearn's view, gamblers choose their preferred distribution channel.  For 
example, most consumers who buy music over the Inte rnet will normally reduce or stop their visits to 
"brick and mortar" music shops.  But, of course, there is  competition between the two distribution 
channels because consumers switch from one to the other – just like a gambler can switch from one 
land based casino to another.  The United States also refers to the statements in the expert report of 
Professor Griffiths and Dr. Wood that Internet gambling could involve a smaller risk of excessive 
gambling or "gambling addiction" than the more tr aditional forms of gambling available in the United 
States.337  To the extent that regulatory concerns can pl ay a role in the context of Article XVII at all 
(which Antigua and the EC both discount), Antigua re peats that not every difference in public interest 
concerns raised by domestic and foreign services is capable of justifying radically different treatment. 
Certainly the prohibition of a less harmful  foreign service cannot be justified by the argument that it is 
not "like" a more harmful  domestic service that is allowed. 
3.199  With regard to the claim that cross-border gambling offers a "mere imitation" of a casino, 
Antigua submits, first, that casino "imitations" form  only part of the Antiguan product offerings.  
Second, and more importantly, Antigua strongly di sagree that various product offerings can be 
meaningfully distinguished on what are really s uperficial comparisons between how they look, how 
they sound or whether their components clink abou t mechanically or connect electronically.  The 
mistake the United States makes in trying to compare cross-border gambling and domestic gambling 
with physical activities such as "virtual reality" horse riding and actual horse riding is this – it is the 
recreational activity of gambling – the experience of winning or losing  – that is fundamentally being 
engaged in, not the flipping of cards or the watc hing of a screen.  The flipping of cards and the 
watching of a screen are merely the methods thro ugh which the same recreational experience is 
delivered.  This is precisely why the United States ' prohibition focuses on the wagering of money.  A 
US exhibit to the Panel provides examples of statut ory provisions articulating state gambling policies.  
The statute cited for Louisiana says "[G]ambling h as long been recognized as a crime in the state of 
Louisiana and despite the enactment of many legalized gaming activities remains a crime.  Gambling which occurs via the Internet embodies the very activit y that the legislature seeks to prevent".  In this 
connection, it is important to keep in mind that, as Dr. Howard J. Shaffer of  Harvard University has 
stated in his expert's report that Antigua has submitted to the Panel, in essence, all gambling is 
experienced "locally" by the individual gambler himself
338, irrespective of whether the source of the 
gambling is a slot machine in a casino, a scratch ticket that the gambler scratches at home or an 
Antiguan operator who communicates via the Internet. 
                                                      
336 See above para. 3.185. 
337 See above paras. 3.185 and 3.187. 
338 Howard J. Shaffer, Internet Gambling & Addiction , Harvard Medical School, Division on 
Addictions (16 January 2004), p. 8. WT/DS285/R 
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3.200  Antigua notes it is possible to engage in the dubious activity of comparing gambling 
offerings.  For instance, Antigua provided the Pa nel with examples of scratch cards with a casino 
theme marketed by United States lotteries.  These ar e also "mere imitations" of a casino and cannot be 
distinguished on that basis from Antiguan services.  Casino games and their "im itators" all operate on 
the basis of the same simple premise – random selecti on.  The fact that random selection is performed 
by a software algorithm does not make a random se lection game "unlike" a random selection game 
using another selection method. Furthermore random  selection by software algorithms is used on a 
grand scale in state-sanctioned gambling in the United States and consequently cannot be the basis of a distinction between random selection games of Antiguan and United States origin.
339  Alleged 
"operating differences" are in any event irrelevant for the betting on sports and other future events and 
for card games where players play against each other via Internet connections rather than whilst all 
sitting together in the same room (both major components of the Antiguan gambling industry).  
Further, these alleged differences  cannot distinguish Antiguan cross-border gambling services from 
non-casino gambling that is legally and prolifically o ffered in the United States  such as lotteries, the 
electronic gambling devices (or "EGDs") that are ava ilable in thousands of American pubs, bars, truck 
stops and convenience stores, or the "remote acce ss" gambling that is offered by United States 
operators. 
3.201  Antigua maintains that the regulatory issues ar e not relevant for the assessment of likeness 
under Article XVII.  Further, the United States is bei ng disingenuous when it claims to "regulate" so-
called "remote" gambling differently than "other gambling services." What the United States in fact 
does is prohibit  cross-border gambling from other WTO Members, tolerate  extensive domestic inter-
state gambling and regulate  at state level the rest of the massive domestic gambling market (whether 
"remote" or "non-remote").  The United States also  continues to make its vague and unsubstantiated 
allegations that "remote gambling" poses a greater organized crime threat.  The United States says in its second submission that "Antigua is  apparently choosing simply to di sbelieve the official statements 
of U.S. and Canadian authorities on this issue (...)."  That is absolutely correct, at least in so far as 
such statements are intended to apply to the cross- border gambling industry in Antigua.  Further, the 
United States does not explain exactly what constitutes "organized crime" but in most of the materials 
submitted by the United States, the crime at issue ap pears to be the gambling itself – and, of course, 
this makes the United States' argument circular: the gambling is organized crime because the United 
States declares it illegal. 
3.202  Antigua agrees with the United States that it is  more difficult to police an activity that is 
partially taking place abroad.  Howeve r, this applies to all cross-border economic activity and trade.  
Furthermore organized crime syndicates can and do abu se many areas of international trade to further 
their criminal objectives.
340  The answer to this threat is not a blanket prohibition of international trade 
but international cooperation.  Despite the cynical statement that "Internet gambling in Antigua and 
Barbuda is sometimes used for money laundering,"341 the United States does not cite even one specific 
                                                      
339 See articles describing the use of computerized dr awings and games by United States lotteries in  
"the Minnesota Lottery's New Digital Draw Show Debut," www.telecomgamefactory.com, (5 March 2003), 
"The Lottery Draw," Public Gaming International, (March 2003), and Patricia McQueen, "Lottery, Department 
of Revenue - Summary.  See also  Matt Connor, "Game Trends", International Gaming & Wagering Business 
(January 2004), p. 28: "With a majority of the slots currently in use in U.S. casinos being the video variety 
(…)". 
340 The report referred to by the United States in above footnote 324. The report describes how 
"international trade", as such, is abused fo r criminal purposes (U .S. State Department, International Narcotics 
control Strategy Report: Money Laundering and Financial Crimes (March 2003) p. XII-27).  See also  United 
States Drug Enforcement Agen cy, Department of Justice, Drug Intelligence Brief: Money Laundering in 
Canada (August 2003), p. 6 (www.usdoj.gov/deal/pubs/intel/03034/03034.pdf) (concluding that as of 
August 2003 organized crime syndicates in the United States and Canada uses Canadian jewelry stores, travel agencies, video rental stores, courie r services, land-based casinos and international computer networks to 
launder illicitly obtained proceeds). 
341 See above para. 3.192.  WT/DS285/R 
 Page 81 
 
 
example of money laundering via Antiguan gambling opera tors.  Further, as of this day, the Antiguan 
authorities have received no  communication whatsoever from the United States – much less any 
requests for judicial cooperation – concerning mone y laundering via Antigua' s gambling industry.  
Yet, Antigua has received numerous other requests or enquiries from the United States about other 
instances of financial crime under the Mutual Legal Assistance Treaty which exists between Antigua 
and the United States and which the United States acknowledges operates successfully.  If the United 
States has any  information about infiltration of organized crime syndicates in the Antiguan gaming 
industry or the use of our industry for money la undering purposes, the United States would have 
communicated this information to Antigua to ensure  appropriate action by both our authorities and 
theirs.  Antigua has since 1999 handled more than 30 formal requests for information from the United 
States under a Mutual Legal Assistance Treaty yet not one of these requests involved criminal conduct 
related to Antigua's gaming industry.  Antigua is and has always been willin g to cooperate with the 
United States to combat crime.  For instance,  the Office of National Drug and Money Laundering 
Control Policy (the "ONDCP") routinely cooperates with the United States Drug Enforcement Administration or ("DEA") and the Federal Bureau of Investigation ("FBI").  In fact, DEA and FBI 
agents often operate in uni son with the ONDCP agents. 
3.203  Antigua notes that the United States tries to s ubstantiate its allegation concerning organized 
crime by referring to a statement from the investment bank Bear Stearns
342,  which bases its view on 
the fact that little public information is availabl e about Antiguan operators.  However, if Antiguan 
operators were able to operate lawf ully and if they were confident that the information would not be 
used by the United States to prejudice their pos ition, more information would be made publicly 
available to the Americans.  It was not so long ago that the Directorate of Offshore Gaming would 
routinely contact the United States government for background informati on on American citizens 
applying for gaming licenses in Antigua.  Also, in 1997 the then-director of Offshore Gaming 
travelled to the United States expressly to meet with United States officials to discuss the Antiguan 
gambling and betting industry and any concerns that the United States might have with respect to the 
industry.  A copy of her report to the Prime Mini ster on these meetings is submitted to the Panel as 
exhibits.  On the topic of consumer fraud, the United States has not provided even one  example 
involving Antigua but only makes general statements about Internet gambling, irrespective of source.  
The United States asserts the compelling need for regulation and appears to suggest that other 
countries, and in particular countries such as Antigua , can never be capable of regulating a service as 
well as a developed economy like the United States. Of course, it can never be sufficient for a WTO 
Member to make such a general, unsubstantiated st atement – in its own terms a "mere assertion" – to 
escape its obligations under the GATS.  Any other po sition would turn the GATS into an agreement 
that only works in one way: export from developed countries to developing countries.   
3.204  Antigua considers that the real answer to an y actual concerns the United States may have 
regarding the abuse of cross-border trade for m oney laundering, consumer deception, fraud or other 
criminal activities is international cooperation.343  The Panel should also note that there is  clear 
evidence of involvement of organized crime, m oney laundering and consumer fraud in the United 
States' own gambling industry.344  Yet the United States does not prohibit this domestic gambling.  
Much effort has been expended by the United States  to convince the Panel that cross-border gambling 
and betting presents unique health risks to American  citizens, although the United States appears to 
come around to the point of view that "the precise mechanics of gambling addiction is a novel issue 
                                                      
342 See below para. 3.280. 
343 A view shared by the United States' Federal Trad e Commission, see "FTC Chairman Muris presents 
the FTC's New Five-Point Plan for attacking cross-bo rder fraud and highlights links between competition and 
consumer protection", Federal Trade Commission (31 October 2002). 
344 See document entitled "Organized Crime in the United States Gambling Industry", Document 
entitled "Money Laundering in the United States Gambli ng Industry", and document entitled "Fraud within the 
United States Gambling Industry". WT/DS285/R 
Page 82  
 
on which not all authorities agree."
345  Antigua responds that a "novel issue on which not all 
authorities agree" per se is an insufficient basis on which to distinguish between services under the 
GATS. 
3.205  Antigua submits that on the substance of the Un ited States claim, the very short opinion from 
the American Psychiatric Association346 cited by the United States is based on studies prepared by 
Professor Griffiths and Dr. Wood and by Dr. Shaffer – each of whom serves as an expert to Antigua 
in this proceeding.  The opinion in fact says very  little about risks specifically related to Internet 
gambling.  First, it mentions that Internet gamb ling is often unregulated.  Internet gambling in 
Antigua is regulated.  As stated many times previ ously, Antigua is prepared to amend its regulatory 
scheme if the United States were to have any specifi c concerns or suggestions.  Second, it mentions 
that Internet gambling is a solitary activity but that  is also the case for most gambling in the United 
States.  Third, it mentions that people who gamb le on the Internet can gamble uninterrupted and 
undetected for unlimited periods of time. However, United States operators lawfully use numerous 
techniques to ensure that gamblers do just that in order to maximize the gambler's losses (and the 
operator's gains).347  The remainder of the document from the American Psychiatric Association 
simply discusses the risks of gambling in general. 
3.206  In his Article prepared for this proceeding, Dr. Shaffer, Director of the Harvard Medical 
School Division of Addictions and one of the leading e xperts in the field, concludes that to the extent 
there is a demonstrable difference at all in the health risks associated with gambling, the primary 
distinction is not between Internet gambling and ot her forms of gambling, but between "rapid-cycle" 
games and other kinds of gambling that involve eith er more deliberation or participation by other 
persons.  A thorough reading of Dr . Shaffer's paper reveals that only sports gambling and multi-player 
table games appear to clearly evade the "rapid-cycle " effect or the single player environment that may 
exacerbate health concerns.  But it is clear from Dr. Shaffer that, as acknowledged by the United States in the quote above, this is not a field in wh ich there is any scientific certainty.  The United 
States pleads that allowing the u se of the Internet or the telephone to offer gambling and betting 
services from Antigua would "open the floodgates" and would add to the "population of potential 
victims."  This smacks of the unscientific hysteria  that Dr. Shaffer and his colleagues warned against 
in their joint editorial in the Journal of Gambling Studies and that he references in his paper submitted 
to you today.
348  Such bare hyperbole simply cannot form  a basis for distinguishing between services 
for purposes of the GATS. 
3.207  According to Antigua, the reality is that num erous legal gambling opportunities are available 
in the United States to people who want to gamble, w ith or without Internet gambling.  Certainly the 
expansion of gambling opportunities has not been a c oncern to the United States in the past.  In 1999 
the NGISC called for a pause in the expansion of gambling opportunities. Since then, however, 
gambling opportunities have expanded considerably in the United States349 and total gross gaming 
revenue increased almost 25 per cent from already very high levels.350  Furthermore lotteries 
promoted by American authorities themselves, and not by private companies, use aggressive and 
sophisticated marketing techniques to sell as many lottery products as possible.  One of their most widespread selling techniques is to market scratch cards as impulse purchase products on the counters of thousands of shops throughout the country.
351  In this respect it is wo rth referring back to the quote 
                                                      
345 See above para. 3.192. 
346 American Psychiatric Association, APA Advisory on Internet Gambling  (16 January 2001). 
347 See above para. 3.9. 
348 See above para. 3.176. 
349 Document entitled "Examples of recent expansion of gambling opportunities in  the United States". 
350 1998 figures compared to 2002 figures. 
351 The Report concerning the Wisconsin Lottery "97-2 Wisconsin Lottery, Department of Revenue – 
Summary, and the stat ement of the Ohio lottery reported in Public Gaming International (September 2002), p. 
20 ("The Ever-Advancing ITVM," public Gam,ing International, (September 2002)).  WT/DS285/R 
 Page 83 
 
 
from the Champion v. Ames decision of the United States Supreme Court in the United States first 
submission referring to the "widespread pestilence of lotteries" which "infests the whole community; 
it enters every dwelling; it reaches every class."  Furthermore the Panel should note that the United 
States federal government has even subsidised Native American tribes to develop gambling 
enterprises.352  Against this background the United States ca nnot credibly contend that it seeks to limit 
gambling opportunities.  What they describe as the "population of potential victims" already 
comprises the entire United States population. Allowing cross-border gambling simply provides another gambling option to choose from. 
3.208  Antigua wish to draw the Panel's attention to the 1999 decision of the United States Supreme 
Court in the Greater New Orleans case.
353  The Supreme Court found that  federal rules that prohibited 
the broadcasting of advertisements for private casinos whilst allowing it for Native American casinos 
was unconstitutional.  In that case the United Stat es argued that the prohibition was necessary to 
protect the American public from gambling opportunities.  However, the Supreme Court found that, whatever the character of the broadcasting ban was in 1934 when it was adopted, "the federal policy of discouraging gambling in genera l, and casino gambling in particular, is now decidedly equivocal."  
The Supreme Court also rejected the federal gove rnment's argument that Native American casinos 
were a lesser threat because they operated in isolated locations and found that:  "[I]f distance were 
determinative, Las Vegas might have remained a relatively small community or simply disappeared 
like a desert mirage."
354  This is an authoritative statement that is highly relevant for the current 
dispute.  As a result of the Greater New Orleans ruling, United States gambling operators can now 
advertise in all states.   
3.209  In Antigua's view, the United States has also made nothing but "mere assertions" regarding 
the supposed increased risk to childre n posed by Internet gambling.  Antigua has shown not only that 
its regulatory scheme and the nature of the busin ess in general works against the participation of 
children in cross-border gambling, but that there are other ways to avoid child gambling as well.  While the United States quotes a credit card official to  the effect that credit cards are available to 
children
355, this does not change the fact that the Unite d States Congress has seen fit to legislate the 
use of credit cards as an effective way to k eep children from engaging in potentially harmful 
behaviours on the Internet.  Antigua has presen ted additional factual evidence regarding child 
gambling in the United States.356  This material also shows that United States government-run 
lotteries actively target the youth market, and even the under age market.357  Suffice it to say that 
American children have many opportunities to ga mble (for instance on scratch cards with "cartoon-
like design and childish iconography"358) and Antigua believes that Internet gambling is among the 
very least accessible ways for them to do so.  The United States has presented no evidence to the 
contrary.  The last "likeness" point raised by th e United States is international classification in the 
most recent version of the CPC359.   But the most recent version of the CPC does not  provide a 
different subclass for Internet gambling. Rather it explicitly includes "on-lin e gambling" in the same 
category as other "gambling and betting servi ces" – thus supporting Antigua's position. 
3.210  Recalling that it does not concede the th reshold issue of a commitment, the United States  
notes that Antigua argues for a likeness analysis clos ely following the goods model, while at the same 
                                                      
352 The US Supreme Court's Decision in Cabazon , 480 U.S. 202, 107 S.Ct. 1083. 
353 Greater New Orleans Broadcasting Assoc., Inc. v. United States , 527 U.S. 173 (1999). 
354 527 U.S. 173, 119 S.Ct. 1923, at p. 10. 
355  See above para. 3.193. 
356 Document entitled "Youth Gambling", p. 4. 
357 Document entitled "Youth Gambling", p. 2 (with regard to the under age market, note the statement 
from the Washington D.C. Lottery concerning "Generation X, Generation Y and Generation Z." See also  Iowa 
Lottery Winner Claim Form, a "Winner claim form" of the Iowa lottery that allows minors to claim their winnings by post. 
358 See above para. 3.193. 
359 See above para. 3.196. WT/DS285/R 
Page 84  
 
time arguing that likeness is not important.  The United States maintains that likeness is a crucial 
component of the Article XVII inquiry, and supports an analysis in this case that looks at regulatory 
concerns, such as those identified by the United Stat es, which have a significant impact on likeness in 
the particular context of gambling services.  A nu mber of third parties also appear to support 
examination of regulatory concerns on a case-by-case basis.  The United States disagrees with 
Antigua's disjunctive reading of "services and service suppliers."  If the text were intended to mean 
that likeness could be proven with respect to one or  the other, but not both, it would have said services 
"or" service suppliers.  Instead, the drafters chose th e word "and," reflecting an intent to require that 
likeness of both the services and their suppliers be shown.  The parties to the GATS negotiations did 
not intend that likeness with respect to suppliers only,  or with respect to services only, without regard 
to one another, would be sufficient – the two are intertwined.  A contrary reading would lead to 
absurd results – such as finding likeness of supplie rs even though they supply different services. 
3.211  The United States maintains its arguments rega rding the particular regulatory concerns 
surrounding remote supply of gambling services, and wishes to emphasize and elaborate on a few key 
points.  Remote supply of gambling services presents additional regulatory risks that do not exist, or 
are not present to the same degree, in non-remote settings, such as casinos.  In a casino, the gambler 
must be physically present.  Therefore, he or she can be identified with a reasonable degree of 
certainty.  Casinos are thus able to restrict a ccess to minors, known criminals, persons who are known 
to be financially insolvent, and so on.  However,  due in large measure to the virtual anonymity of 
remote media such as the Internet, remote supply gambling operations cannot reliably identify their 
customers.  The evidence on age verification submit ted by the United States to this Panel illustrates 
this fact.  Similarly, disreputable suppliers can exploit the anonymity of remote media in ways not 
possible with non-remote supply of gambling services.  Remote gambling also presents special health 
and youth protection risks in part because it is ava ilable to anyone, anywhere – including compulsive 
gamblers and children – who can gamble 24 hours a da y with a mere "click of the mouse."  Isolation 
and anonymity compound the danger.  In the words of  a gambling addict interviewed on the videotape 
provided by the United States, "nobody has to see you do it" and "nobody has to know."
360 
3.212  With respect to Antigua's continuous argumen t that the United States has not shown the link 
between Internet gambling and various forms of crim e, the United States has al ready established that 
remote supply of gambling is particularly susceptible  to organized crime, money laundering, and other 
forms of crime, and also raised law enforcement concerns when discussing Article XIV.  The United 
States remains unable to discuss pending law enforcement matters out of concern for compromising 
criminal investigations, but has located publicly av ailable evidence of one case study that illustrates 
the link between criminal activity and Internet ga mbling.  Mr. William Scott describes himself as one 
of the persons responsible for bringi ng gambling to the island of Antigua.361  Antigua licensed Mr. 
Scott to operate an Internet gambling site in spite of  the fact that records av ailable publicly show that 
Mr. Scott had been convicted of racketeering in the United States.  In an October 2001 Canadian 
television broadcast, Mr. Scott admitted that he was a felon and had spent three years in prison.362  In 
an interview with the same Canadian program, th e Solicitor General of Antigua, Mr. Lebrecht Hesse, 
stated that the Government of Antigua was not aware that this individual was a felon and that it had no indication of such during the "due diligence" pr ocess that led to the granting of a license to operate 
a gambling web site to a convicted felon.  The se gment of the broadcast transcribed below follows a 
long discussion of Mr. Scott's background and a Canadian company with which he did business.  It 
picks up with Mr. Scott's release from prison and his decision to relocate his operations. 
[...] 
                                                      
360 Canadian Broadcasting Corporation, "The Big Gamble", broadcast on The Fifth Estate  
(31 October 2001).  
361 Ibid. 
362 Ibid.  WT/DS285/R 
 Page 85 
 
 
Reporter : Antigua has a law that you can't – a licensee can't – have a criminal record.  
You were sentenced to eight years for illegal bookmaking and extortion. 
Mr. Scott : Illegal bookmaking and extortion, that's correct.  [...] 
Reporter : So how did, how did you get around the rule in Antigua? 
Mr. Scott : Uh, I think it was grandfathered in.  I mean, I just put down, and they 
licensed me.  [...] 
Reporter : So how did Bill Scott slip through the cracks? 
Solicitor General Hesse : How did he ... I don't know what you mean by that.  He has 
a criminal record?  [...] Reporter : I spoke to him yesterday and he admits it. 
Solicitor General Hesse : A due diligence was conducted on him and this did not 
come out. Reporter : Not a very good due diligence.  It is not difficult to find out.  Forgive me 
sir. Solicitor General Hesse : No.  We have people who conduct it.  We don't do this due 
diligence ourselves. 
Reporter : So what do you do now? 
Solicitor General Hesse : You have raised a very important issue and I have to mount 
an investigation into it.
363  [...] 
3.213  The United States submits that the report on this  videotape states that convicted felon William 
Scott transferred his license to a relative.  Notwith standing that transfer, the tape showed him to be 
actively involved in the supply of gambling servi ces.  Mr. Scott still owned an Internet gambling 
concern based in Antigua as recently as last year364, and to the best of US knowledge, he continues to 
provide gambling services by remote supply from Anti gua.  Mr. Scott does in fact have a lengthy 
criminal history in the United Stat es.  Most notably, he received three concurrent eight year sentences 
entered in 1984 after his guilty plea to three counts of a six-count criminal indictment.  The 
indictment included one count of violating the R acketeer Influenced and Corrupt Organizations Act 
based upon multiple predicate acts of bribery of police officials, the act of conducting an illegal bookmaking business, and multiple acts of extortion for the payment of gambling debts through the 
use of violence or other criminal means to cause harm to a person.  The indictment also contained five 
counts of extortion for the payment of gambling debts through threats of the use of violence or other criminal means to cause harm to a person.  In 1 998, the United States issued an arrest warrant for 
Mr. Scott based on a criminal complaint for federal gambling violations.  Mr. Scott is a fugitive from 
that complaint.  The United States argues that William Scott is by no means the only supplier of 
remote gambling services.  There are many others  operating from Antigua and other locations.  The 
United States has already discussed its views on or ganized crime involvement in remote supply of 
gambling, and provided the views of the US Federal Bureau of Investigation.  In the view of the 
United States, Mr. Scott is the tip of the iceberg. 
3.214  On the related issue of money laundering, the United States disagrees with Antigua's 
statement that there is essentially no difference in  the relative threat between remote and land-based 
casino gambling.  Unlike casino gambling in which the gambler is physically present, Internet 
gambling allows for virtually anonymous and instan taneous communications that are difficult to trace 
to a particular individual or account. While it is true that casino gambling can be used, among other 
things, to launder the cash proceeds of crime duri ng the placement stage of money laundering, remote 
supply of gambling is a convenient vehicle for money launderers to conceal th e ownership and nature 
of the proceeds through layering and integration, the second and third stages of money laundering.  
Due in part to the virtual anonymity availabl e to Internet gamblers, remote supply gambling 
operations are not susceptible to effective an ti-money laundering and "know your customer" 
requirements.  The volume and speed of remote tran sactions, combined with the virtual anonymity of 
                                                      
363 Ibid. 
364 Prospectus – Consolidated Gaming Corporation Limited, (31 January 2003), p. 33. WT/DS285/R 
Page 86  
 
such transactions, makes remote supply of gambli ng a prime mechanism for the money launderer to 
conceal and disguise the proceeds of illicit activity by  creating a deceptive "paper trail" that makes the 
money appear to be legitimate.  In the layering stage, money launderers conceal transactions by 
burying them in huge volumes of transactions daily and by creating records and "audit trails" that 
conceal and disguise the true nature, source and owne rship of the ill-gotten gains of crime.  Remote 
supply of gambling is especially well-suited to fac ilitate money laundering in the layering stage. 
3.215  The United States further submits that Antigua  is unable to persuasively rebut its own 
evidence on the differences in customers and custom er experiences that distinguish remote and non-
remote gambling.  Bear Stearns has observed that  Internet and land-based customers were not the 
same, to which Antigua replies, implausibly and withou t any basis, that this really means that the two 
services are competing for the same customers.  Mo reover, Antigua's argument that gambling is only 
about the "experience of winning or losing" without regard to the recreational impact of remote or 
non-remote settings contradicts the statements of its  own consultants.  The United States further notes 
that Antigua implies that the United States some how endorses statements by Antigua's consultants 
that the Internet poses a lesser health  risk than other forms of gambling.  That is incorrect.  In line 
with the views of the respected American Psychiatri c Association, the United States continues to view 
Internet gambling as posing a greater health risk.  And a reasonable observer could hardly deny that 
the Internet and other remote media propagate this risk to large new populations of potential victims. 
3.216  The United States argues that Antigua makes asser tions about lotteries and other distinct US 
gambling services without having proven likeness be tween these particular services and suppliers and 
any Antiguan services and suppliers.  For example,  Antigua asserts that lotteries target under age 
players, citing the example of an Iowa lottery form.  In fact, the Iowa lottery, like other US lotteries, is 
age-restricted (in Iowa players must be 21).  Had Antigua examined Iowa law, it would have found that Iowa regulations require a seven-day suspension of  the license of any retailer that sells a ticket to 
an under age player, followed by 30 days for the second offence within one year, followed by one 
year for the third offence within one year.
365  US state lotteries enforce age restrictions, and in many 
cases offer special programs to curb under age gambling.366  Moreover, members of the National 
Association of State and Provincial Lotteries subscrib e to advertising restrictions designed to ensure 
that lottery advertising does not appeal  to persons under the legal purchase age367, all of which is far 
more than Antigua could possibly do to limit under ag e Internet gambling, given the lack of effective 
age verification technologies.  Finally, the United St ates rejects Antigua's assertions that despite clear 
evidence of money laundering, organized criminal ac tivity and fraud involved in domestic gambling, 
the United States does not prosecute domestic illegal gamblers.  The United States describes below in 
paragraph 3.235 the hundreds of prosecutions involving  illegal gambling.  However, only a handful of 
illegal gamblers based outside the United States ha ve been prosecuted, such as Jay Cohen who is 
currently in prison. 
3.217  Referring to the television documentary368 submitted by the United States, Antigua  submits 
that this video is offensive and totally irrelevant to  the legal questions that arise in this proceeding:  
the fact that the United States seeks to adduce it as ev idence at all, let alone at this late stage, makes 
the ruse all the more obvious.  This programme portrays Antigua as a backwater, the Antiguan 
Solicitor General, who is African and whose mother tongue is not English, finds himself depicted as 
incompetent.  The approach adopted by the produ cers of this documentary is precisely what one 
would expect from sensational commercial televisi on seeking to maximise its viewing figures and 
advertising revenues.  If the United States is struggling so much in this case that it needs to resort to a 
                                                      
365 Iowa Admin. Code Sec. 531–12.12(4), at http://www.legis.state.ia.us/Rules/Current/iac/ 
531/53112/53112.pdf . 
366 See http://www.naspl.org/support.html ; http://www.naspl.o rg/programs.html . 
367 See http://www.naspl.org/nasplad.html . 
368 Canadian Broadcasting Corporation, "The Big Gamble", broadcast on The Fifth Estate 
(31 October 2001).  WT/DS285/R 
 Page 87 
 
 
media hatchet-job of a small developing country that  does not have the clout to get a retraction, then 
the United States is really clutching at straws.  The most offensive fact of all, however, is that by 
submitting this video as evidence, the United States explicitly adopts the views expressed in it as its 
own formal view vis-à-vis Antigua.  If put in the context of the rest of the US argument, the United States is essentially saying that Antigua is a backwater, irredeemably incapable of organising a 
respectable gaming, or any other industry.  This is  an astonishing statement, which sends a message to 
all developing countries that they can be condemn ed with the weakest reputational attacks. The 
United States does not have to assess the regulatory efforts of Antigua and consequent behaviour of 
its operators – it can simply refuse market access to  all Antiguan companies on the basis of outright 
prejudice.  
3.218  Antigua notes, however, that this position is in star k contrast with the latest Strategy Report of 
the United States State Department concerning mone y laundering and financia l crimes, published in 
March 2003, which describes at some length the respons ible steps taken by Antigua to regulate its 
financial services and gaming industries, 
369 based on the United States own analysis by its competent 
agencies and not by a producer or a television station.   It is also in contrast to a letter sent to the 
Prime Minister of Antigua and Barbuda a few week s ago by the US Secretary of State, Mr Collin 
Powell, thanking him for Antigua's cooperation in  the fight against money laundering and drug 
trafficking.  No regulatory system is foolproof. Th at is the case for gaming regulation in Antigua, but 
also for gaming regulation in the United States.  A number of exhibits submitted by Antigua in this 
dispute make that abundantly clear. As to Mr. Scott, on whose example the United States seeks 
predominantly to rely, the facts do not in any even t demonstrate that the Antiguan regulatory system 
is fatally flawed.  The gambling related offences in  relation to which Mr. Sc ott pleaded guilty took 
place 20 years before the documentary was made. When  Mr. Scott first came to Antigua there was no 
gambling regulation in force but since its introduction he has to the best of our knowledge been scrupulously compliant in relation to every aspect.  Two years ago Mr. Scott's company was sold to a publicly held Australian company and he retired from the business:  the United States' statement that 
he "continues to provide gambling services by remote  supply from Antigua" is therefore wholly false. 
The United States said he was the tip of the iceberg:  given the falsity of their remarks about him, that 
iceberg has melted in the stark sunlight of truth.  Over all, therefore, it is not clear why anything in this 
television programme makes a case against Mr. Sco tt which Antigua should have pursued, let alone a 
case against the Antiguan gaming industry as a whole.  In any event, Antigua and the United States 
have a Mutual Legal Assistance Treaty under wh ich the United States has made numerous requests 
and inquiries of Antigua, and received swift respon ses.  If the United States has any concerns about 
any operator in the gaming industry in Antigua, why have  they not brought this to the attention of our 
authorities so that appropriate  action could be taken?   
3.219  The United States  replies that Antigua protests too mu ch with regard to the Canadian 
Broadcasting Corporation program that the Unite d States provided on video tape.  Antigua has 
submitted dozens of journalistic reports as evidence, and this one submitted by the United States is no 
different;  it is entitled to the same evidentiary we ight.  If anything, it has greater probative value 
because in the video the actors sp eak for themselves.  Moreover, th e lack of due diligence displayed 
before granting William Scott a license indicates that  Antigua does not screen persons before granting 
them a licence to operate an Internet gambling s ite.  While the due diligence requirement may be the 
law in theory, Antigua's practice has sometimes diverg ed from this theory.  This is a similar type of 
problem that was observed in the 1990s, when some  of Antigua's offshore banks were found to be 
engaged in money laundering and pe rsons of questionable character – some of whom were later 
convicted of fraud and money laundering in US c ourts – had been granted licenses to operate 
Antiguan banks.  There is a similar concern re garding Antigua's money laundering laws, which 
appears to have resulted in no convictions since they  were enacted and the advi sory issued by the US 
Treasury was withdrawn. 
                                                      
369 US State Department, International Narcotics Control Strategy Report: Money Laundering and 
Financial Crimes  (March 2003), p. XII-87 to XII-89. WT/DS285/R 
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3.220  Concerning the reference made by Antigua to the report issued by the US Department of State 
in March 2003 as evidence that the US government has no concerns with Antigua, the United States 
wishes to quote from the first sentence of that report on page 209 under the heading of Antigua and Barbuda:  "Antigua and Barbuda has comprehensiv e legislation in place to regulate its financial 
sector, but it remains susceptible to money laund ering because of its loosely regulated offshore 
financial sectors and its Internet gaming industry."
370  As reflected in the State Department report, the 
issue is not whether Antigua has laws on the books, the question is whether those laws are adequately 
enforced.  The United States is also encouraged by  the statement of the delegate of Antigua that 
Mr. Scott may no longer be operating an Internet gambling site in Antigua;371 this understanding that 
he operated the business as late as 2003 was based upon a document su bmitted by the United States to 
the Panel.372  The United States would be interested in Antigua's views on how he got licensed in the 
first place, and continues to be concerned about  the operation of gambling businesses through third 
parties, as cases have been prosecuted in the Un ited States where a person who cannot be licensed 
continues to run a gambling operation through third parties. 
(b) Treatment no less favourable 
3.221  Antigua  argues that the US Schedule provides no limitations on national treatment for the 
cross-border supply of gambling and betting services.  The fact that the United States' measures at issue in this case disfavour services and service suppliers of other WTO Members compared to services and service suppliers of United Stat es origin needs no further explanation. 
3.222  The United States  submits that on the "less favourable  treatment" prong of Article XVII, 
Antigua again offers no argumentation at all; it me rely asserts that this issue "needs no further 
explanation."  The United States has pointed out from  the earliest stages of consultations that its 
restrictions applicable to Internet gambling (and other forms of gambling services that Antiguan firms 
seek to supply on a cross-border basis) apply equa lly within the United States.  Antigua fails to 
provide evidence or argumentation pointing to any US law or regulation restricting supply of services 
or service suppliers from outside the United States that is not accompanied by an equal or greater 
restriction on services originating inside the United St ates.  Its claim therefore must fail.  Underlying 
this failure of proof is a failure on the part of Antigua to address the fact that relevant restrictions on 
remote supply of gambling under US law, whether by  Internet or other means, are based on objective 
criteria that apply regardless of the national origin of the service or service supplier.  As the Chairman 
of the Group of Negotiations on Services observed with  respect to Article XVII during the final stages 
of the Uruguay Round negotiations , "distinctions without a link to  national origin and based on 
objective criteria would not normally violate the national treatment provisions."
373  Stripped down to 
its essence, Antigua's Article XVII claim is plainl y unsustainable.  If accepted, Antigua's argument 
would let Antiguan companies offer gambling on a scal e and in a manner that would be illegal for US 
suppliers.  Such an outcome would afford Antiguan companies treatment vastly more favourable than 
domestic suppliers – something that Article XVII clearly does not require. 
3.223  Antigua  replies that literally thousands of gamb ling and betting services are offered in the 
United States by state-sanctioned providers.  Antig ua has shown the existence and extent of these 
operations.  On the other hand, it is not possible fo r Antiguan suppliers to obtain an authorization to 
supply gambling services on a cross-border basis. The United States nevertheless submits that there is 
no violation of Article XVII of the GATS because the laws that prevent Antiguan service suppliers 
from supplying gambling services by "remote" means also prevent United States domestic service 
suppliers from doing the same.  Antigua disagrees.  Article XVII:3 explicitly provides that formally 
                                                      
370 Ibid., p. 209. 
371 Ibid., para. 5. 
372 Prospectus – Consolidated Gaming Corporation Limited, (31 January 2003). 
373 See Informal GNS Meeting – 10 December 1993, Chairman's Statement,  MTN.GNS/49, circulated 
11 December 1993, section 1.  WT/DS285/R 
 Page 89 
 
 
identical treatment can be less favourable if it modi fies conditions of competition.  Prohibiting foreign 
cross-border service suppliers from using means of remote communication makes it impossible for 
them to supply their services.  The impact of that  prohibition on domestic operators is clearly much 
less far reaching, as they can still supply services via other means even if not considered "remote."  
Thus, the "formally identical treatment" advanced  by the United States modifies conditions of 
competition very considerably.  In fact, it makes competition from Antigua and Barbuda impossible.  
3.224  In Antigua's view, "remote access" gambling is rampant across the United States in a variety 
of different forms, from the off-track betting ser vices and the Internet-based betting to the most 
obvious form of "remote" gambling – the lotteries – which market their products in almost 180,000 stores, petrol stations, pharmacies, news stands, bars  and restaurants (not to mention stand-alone self-
service lottery vending machines) that have nothing bu t at best an electronic connection to the source 
of the lottery.  The federal laws that prohibit the use of remote communication to offer gambling 
services do not apply to these opera tions, either because the remote communication does not cross a 
state or international border (which is the case for the lotteries) or because the operations have 
obtained an exemption (which is the case for the horse race betting industry).  The United States 
argues that lotteries "are not offered by remote supply."
 374  In fact, virtually all  lottery games in the 
United States are offered by remote supply.  Star ting in the early 1980s, providers of United States 
lotteries invested heavily in electronic communications networks linking their central computers with thousands of purpose-built computer terminals set up in the approximately 180,000 retail points 
mentioned above for the specific purpose of making lottery gambling as accessible as possible.  These 
communication networks have also allowed the lotteries to compete with casino-style gaming by 
offering more and more frequent games.  Long before  the arrival of the Internet, the lotteries referred 
to these games as "on-line" games.
375 In essence, Antiguan suppliers of "on-line" gambling games do 
the same as the lotteries.  But rather than us ing the very expensive purpose-built communication 
networks that the US lotteries use, Antiguan operato rs use the generic technology of the Internet.   
3.225  Antigua does not agree with the US arguments that the amendment of the Interstate Horse 
Racing Act allowing betting by the Internet has no legal effect under United States law. 376  Antigua 
cannot see how a law adopted by the United States Congress can have no legal effect, particularly given that operators in the United States are offering betting services via the Internet.  Most 
importantly, however, the United States undertakes no law enforcement actions against these large 
scale Internet betting operations.  If the United Stat es continues to argue that these operations are 
unlawful under United States law, Antigua and Barbuda  will have to withdraw its suggestion to the 
Panel not to examine the actions listed in Secti on III of the Annex to its Panel request as separate 
measures.  In a situation of selective enforcemen t of the law against foreign suppliers only, law 
enforcement measures obviously "do something" that is relevant for the purposes of WTO law – they 
result in less favourable treatment.  Antigua submits th at the United States' inference that it is in the 
process of investigating these operations lacks credibility.  The United States has undertaken 
considerable law enforcement efforts against Antiguan operators. Yet, no enforcement action 
whatsoever has been taken against its domestic operators, who must present a much easier law enforcement target, given their presence within the territory.  The Panel should further note that one 
of these Internet betting businesses, Capital OTB, is  a public corporation owned by the State of New 
York.  In addition, the United States' position on this  issue is linked to its attempt to characterise 
gambling opportunities in the United States as "confined to particular locations."  As demonstrated in 
the map showing the locations of casinos in the United States
377, the "particular locations" (which on 
the map do not include the thousands upon thousands  of lottery sales outlets mentioned above) do not 
appear very limited or "confined." 
                                                      
374 See above para. 3.22. 
375 NGISC Final Report, p. 2-1. 
376 See above para. 3.22. 
377 "Casinos in the United States", Bear Stearns 2002-2003 North American Gaming Almanac . WT/DS285/R 
Page 90  
 
3.226  The United States  reiterates that the burden also r ests on Antigua to provide evidence and 
argumentation showing that its servi ces and suppliers receive "less fa vourable treatment."  The United 
States again points out that US restrictions applicable to Internet gambling and other forms of gambling services that Antiguan firms seek to supply on a cross-border basis apply equally to those remote supply activities within the United States.  In this regard the United States would like to 
correct the misstatement by Antigua that Antiguan gambling services "are prohibited because they are 
supplied from abroad."  This is incorrect.  The laws governing remote supply of gambling apply 
equally within the United States. 
3.227  Antigua  emphasises that to the extent that Article  XVII of the GATS can play a role in this 
dispute
378, Antigua believes that the United States' total prohibition and the legisl ative and regulatory 
provisions, applications thereof and related pract ices that make up the total prohibition violate 
Article XVII in a number of ways.379  First, the United States' tota l prohibition, as such, violates the 
United States' commitment to national treatment of  cross-border supply.  Domestically supplied 
gambling and betting services are permitted whilst cross-border supply of foreign services is 
completely prohibited.  Second, the federal laws  and other legislative and regulatory provisions, 
applications thereof and related practices specifi cally prohibiting or preventing cross-border supply 
from Antigua whilst allowing domestic supply, whet her remote or in person, within states by 
authorized domestic suppliers, result in less favour able treatment of Antiguan services and service 
suppliers.  Third, the United States' authorities a llow in a number of instances, whether because it is 
lawful or as a matter of selective enforcement of  state and federal laws, the "remote" supply of 
gambling and betting services between states in the United States.  The United States' authorities do 
not, however, allow cross-border supply of gamb ling and betting services from Antigua.  Fourth, even 
if it were to be correct that all "remote" s upply of gambling and betting services was effectively 
prohibited in the United States, quod non , the United States would still be in violation of Article XVII 
of the GATS because such formally identical treatment of Antiguan and United States origin services 
results in less favourable conditions of compe tition for Antiguan services and service suppliers: 
domestic operators can still supply their services "in person" (i.e . non-remote).  For service suppliers 
in Antigua, however, it is obviously impossible to supply services in person. This violates 
Article XVII in the context of a full national treatment  commitment to cross-border supply.  Fifth, the 
state laws that prohibit all gambling, while exem pting gambling specifically authorized but without 
providing a possibility for Antiguan operators to obtai n an authorization to supply the same services 
on a cross-border basis380, result in less favourable treatment of Antiguan services and service 
suppliers.  Sixth, the state laws or regulations that  grant exclusive or special rights to operators of 
domestic origin381 result in more favourable treatment of those domestic operators and their services 
compared to Antiguan services and service suppliers. And, seventh, the state laws that require the 
physical presence of the operator within the territory of the state382 result in less favourable treatment 
of Antiguan service suppliers that seek to supply their services on a cross-border basis.  
3.228  The United States  submits that it is important to recall that even within a group of like 
services or like suppliers, nothing in the GATS pr events the maintenance of nationality-neutral  
regulatory distinctions.383  Thus, even if one assumes for the sake of argument that Antigua could 
                                                      
378 See Antigua's reply to Panel question No. 16. 
379 Antigua notes that some of these violations comprise de jure less favourable treatment whilst others 
comprise de facto  less favourable treatment. Yet other violations are difficult to qualify as de jure or de facto  
less favourable treatment. The application of Article XV II, however, does not requ ire the qualification of a 
particular instance of less  favourable treatment as de jure or de facto.   It only requires the establishment of less 
favourable treatment of like services. 
380 See above paras. 3.106 and 3.107. 
381 See above footnote 249. 
382 See above para. 3.109. 
383 Robert E. Hudec, GATT/WTO Constraints on National Treatmen t: Requiem for an "Aim and Effect" 
Test, 32 International Lawyer 619-649 (1998), at: http ://www.worldtradelaw.net/articles/hudecrequiem.pdf,   WT/DS285/R 
 Page 91 
 
 
show likeness between some remotely supplied gambling service and supplier and a non-remote 
gambling service and supplier (which it cannot), the United States may nonetheless maintain a 
regulatory distinction between remote and non-remote supply of gambling services.384  The GATS 
only requires that such distinctions, whether de jure  or de facto,  must afford no "less favourable 
treatment" to foreign suppliers on the basis of nati onal origin (Article XVII:1 and XVII:2).  It also 
provides that treatment that "modifies the conditions of competition" in favour of domestic like 
services or suppliers "shall be considered to be less favourable" (Article XVII:3).  US restrictions on 
remote supply of gambling services comply with these requirements.  One pair of commentators has 
observed that "a foreign crook who is subject to a nation's criminal laws is still receiving 'national 
treatment.'"385  That observation applies equally in this di spute.  As the United States has repeatedly 
pointed out, US restrictions on remote supply of  gambling apply regardless of national origin.  
Nonetheless, Antigua appears to make a claim of de jure  discrimination based on its assertion that US 
law authorizes two domestic gambling services – pari -mutuel betting on horseracing and state lottery 
services – to operate by remote supply.386  Once again, Antigua's assertions are factually incorrect. 
The United States has addressed the issue of remote supply of pari-mutuel wagering on horseracing in 
its responses to the Panel's questions.387  To briefly summarize, Antigua claims that US federal law in 
the form of the Interstate Horseracing Act creates an "exemption" that permits remote supply of pari-
mutuel wagering on horseracing by domestic  suppliers.  This is incorrect.  US federal criminal statutes 
continue to prohibit the transmission of bets or wa gers on horse races to the same extent that they 
prohibit other forms of remote supply of gambling services.  The 2000 amendment to the Interstate Horseracing Act did not alter pr e-existing federal criminal law.
388  In fact, contrary to Antigua's 
claims, the Interstate Horseracing Act  actually provides more favourable treatment to foreign 
suppliers of gambling services.  As noted in the US  response to the Panel's question 22, US laws do 
not prohibit remote supply of information assisting in the placing of pari-mutuel wagers on horseracing (or any other form of gambling) as long  as the information is being transmitted from a 
place where that betting is legal to a place where that betting is legal.  In the pari-mutuel horseracing 
context, the Interstate Horseracing Act imposes sp ecial requirements on the supply of such gambling 
services domestically (e.g., requiring certain writte n consent agreements), but does not impose any 
                                                                                                                                                                     
p. 30-31 ("[A] government is permitted to distinguish between otherwise "like" service providers by imposing 
regulatory distinctions based on some other characteris tic of the service provider or service transaction."). 
384 The United States considers that this distinction is not, contrary to Antigua's assertion, an intermodal 
distinction between cross-border supply and supply by local presence.  A US domestic remote supplier is no less 
subject to US restrictions on remote supply of gambling than a remote supplier operating on a cross-border 
basis. 
385 Don Wallace, Jr. and David B. Bailey, The Inevitability of National Treatment of Foreign Direct 
Investment with Increasingly Few and Narrow Exceptions, 31 Cornell Int'l L.J. 615, 627 (1998). 
386 The United States recalls that, as noted above, Antigua still has not shown, and cannot show, that it 
offers "like services" through "like suppliers" with respect to either  of these services. 
387 See the United States' replies to Panel question Nos. 21-22. 
388 In above para. 3.225, Antigua suggested in connec tion with this issue that  it might "withdraw its 
suggestion to the Panel not to examine the actions listed in Section III of the Annex to its Panel request as 
separate measures," apparently for th e purpose of asserting a new claim of de facto  less favourable treatment.   
Antigua cannot "withdraw" its clarifica tion regarding the measures at issue here.  The Panel's terms of reference 
are what they are; they are estab lished by the complaining Member's Panel request, not by how a responding 
party defends itself.  Antigua has already clarified, in the Panel's words, that "it does not intend to treat the items 
listed in Section III as distinct and autonomous 'measur es' but, essentially, will seek to rely upon them as 
evidence to illustrate the existence of a general prohib ition against cross-border supply of gambling and betting 
services in the United States."  See Communication from the Panel, 29 October 2003, para. 31, in Annex B of this Report.  The Panel has therefor e already determined that it "will not consider and examine [the items in 
Section III of the Panel request] as separate, autonomous measures."  Ibid. Any attempt by Antigua to retract its 
clarification of its Panel request would amount to an im proper attempt to expand the Panel's terms of reference. WT/DS285/R 
Page 92  
 
requirements on cross-border supply of the same services.
389  Foreign services and suppliers thus get a 
better deal under the Interstate Horseraci ng Act than their domestic counterparts. 
3.229  According to the United States, Antigua asserts that lottery games are offered by remote 
supply in the United States, apparently because, unsur prisingly, state lotteries use computers and other 
electronic devices to communicate with their various offices and distributors.  Each of the distribution 
mechanisms that Antigua identifies (stores, gas sta tions, pharmacies, newsstands , bars and restaurants, 
and vending machines) requires the service consumer to present himself or herself in person at an authorized lottery distribution location.  Thus th e supply of the service by these means is non-remote.  
In other words, Antigua simply confuses the fact that lotteries often have many retail points of 
presence with the entirely different concept of remote supply. 
3.230  The United States argues that overshadowing Antigua's de jure  national treatment claims 
regarding lotteries and  pari-mutuel betting on hor seracing is a much more ambitious claim about de 
facto  national treatment.  Antigua argues that although  US law provides "formally identical" treatment 
to foreign and domestic services and suppliers, the fact that it restricts remote supply of gambling 
more severely than non-remote supply alters th e "conditions of competition" in the market for 
gambling services in a way that disfavours Antiguan suppliers.  The basis for Antigua's argument is 
difficult to discern.  As a factual matter, one can only assume that the abolition of US restrictions on the remote supply of gambling would pose an enor mous new competitive threat to Antiguan services 
and suppliers, as major US-based gambling service pr oviders would begin offering their services in 
competition with those of Antiguan websites.  Nonetheless, Antigua complains that it is 
disadvantaged because US domestic suppliers can still supply their services by means that are not 
remote.  This argument fails because Antigua has no t offered evidence of any restriction that would 
stop its suppliers from supplying their services by the same non-remote means available to domestic 
suppliers.  Hence there is no national treatment viola tion.  If what Antigua really means to argue is 
that it is inherently harder for foreign suppliers  to supply non-remote services in the United States, 
then its argument is precluded by Article XVII, footnote 10, which states that: 
"Specific commitments assumed under this Ar ticle shall not be c onstrued to require 
any Member to compensate for any inhere nt competitive disadvantages which result 
from the foreign character of the relevant services or service suppliers." 
3.231  Consistent with footnote 10, even if one assumes, contrary to fact, that the United States made 
a national treatment commitment for gambling services, the United States would be under no obligation to make up for the fact that Antiguan services and their suppliers are from somewhere other 
than Nevada, New Jersey, etc., and by reason of that fact may find it inherently more difficult to offer 
non-remote gambling services in the United States than would be the case for some domestic suppliers.  Through footnote 10, the negotiators of  the GATS anticipated and rejected precisely this 
kind of argument. 
3.232  Antigua  submits that the United States clearly has and enforces laws that specifically outlaw 
gambling services that cross international borders.  This is de jure discrimination in the context of a 
national treatment commitment for cross-border supply, irrespective of whether these laws also prohibit inter-state gambling.  To the extent th at these laws would indeed  prohibit inter-state 
gambling, Antigua has shown that they are not enforced against domestic operators which also 
constitutes a discrimination.  The US argument on less favourable treatment is entirely based on the 
notion of "remote supply," an unspecified distribut ion method which is allegedly not used by United 
States gambling operators.  The United States argu es, for instance, that lottery gambling is not 
"remote" because lotteries use computers and ve nding machines that are placed in the 180,000 
                                                      
389 15 U.S.C. § 3002(3) (defining an "interstate off-track wager" to include only domestic wagers 
between US states); § 3004(a) (requiring a consent ag reement as a condition precedent to acceptance of an 
interstate off-track wager).  WT/DS285/R 
 Page 93 
 
 
"authorized lottery distribution locations" in th e United States. But this obviously is "remote" 
gambling because the gambler does not need to physica lly go to the lottery to play.  Rather, he can 
play in the local grocer, pharmacy, petrol station or other location where he must go to buy other products in any event.  Furthermore lotteries do  allow players to play at home.  United States lotteries 
allow players to purchase tickets to participate in numerous drawings spread out over several months 
or even a year.
390  Players can verify winning numbers on the television or the Internet.  Many United 
States lotteries allow players to purchase lottery ticke ts by post, pay by cheque or even credit card, 
and then claim any winnings by post – all without ever leaving the home.391  Several United States 
lotteries also have games that allow players to pa rticipate from home in a televised lottery game.392  
Some United States lotteries can even be played from home by minors under the age of 18, as 
illustrated by the form used by the Iowa lottery which allows unde r age gamblers to claim their 
winnings by post.393  Sports betting operators in Las Vegas also allow punters to place bets on events 
occurring in the near- or the far-distant future, retu rn to their homes and claim their winnings by post 
days, weeks or months later.394 
3.233  Antigua submits that, given the absence of  a clear definition of the term "remote"395, a 
discussion concentrating on whether or not something is  "remote" is unlikely to be fruitful.  Rather the 
discussion should be conducted on the basis of the terms of Article XVII which requires "conditions of competition" that are "not less favourable" fo r "like services."  In paragraph 3.230, the United 
States stated that Antigua "has not offered evidence of any restriction that would stop its suppliers 
from supplying their services by the same non-remote means available to domestic suppliers."  This 
begs the question whether it would be legal for An tiguan operators to place computers in bars, shops 
or other outlets through which cons umers could then gamble with An tiguan operators (similar to, for 
instance, the New York state lottery).
396  Such an operation would violate state law because it is not 
specifically authorized and it would of course also  violate the Wire Act and the other federal anti-
gambling laws because the gambling service crosses an international border. 
3.234  In Antigua's view, this gives rise to two further issues in the debate about the application of 
Article XVII to the inability of Antiguan services su ppliers to use specific distribution methods.  The 
first issue is "less favourable treatment within sp ecific distribution methods."  The United States 
allows its gambling operators to use distribution met hods (whether intra-state or  inter-state) that could 
be used by Antiguan operators to supply gambli ng and betting services on a cross-border basis: the 
Internet, telephone, post, television, vending machines,  electronic links with computers and the like.  
The United States prohibits, however, the use of these distribution methods for Antiguan services.  
This inevitably results in a finding of "less favourable treatment."  The second issue is "less 
favourable treatment across specific distribution methods."  In Antigua's view, the United States also 
violates Article XVII by allowing domestic suppliers to  use distribution methods that require physical 
                                                      
390 Information on how to play New York's Mega Millions lottery game, found at www.nylottery.org. 
391 See, for instance, the Virginia Lottery (which offe rs "subscriptions for season tickets" that can be 
ordered from home by regular post [www.valottery.com/m egamillions/subscription.asp] and allows winnings to 
be collected by sending a signed lottery ticket,  regular post, with a return address on it 
www.valottery.com/faq/kb_detail.asp?id=7]).  The Illinois lottery's Internet web site offers players a 
downloadable form to purchase up to a year's worth of lottery tickets by mail, with payment to be made by credit card. (www.illinoislottery.com/subsections/Subscrip.htm).  See also  www.nylottery.org regarding "Lotto 
from Home" in New York. 
392 For instance, the material on the Ohio lottery's "The Cash Explosion – Play-At-Home Bonus Box". 
393 Iowa Lottery Winner Claim Form (the claim fo rm specifies how minors under the age of 18 can 
claim their winnings [www.ialottery.com /LegalRequirements/claimform.pdf]).  
394 Extract from the 2002 NAICS Definition, Exhib it AB-208 [sic].  The Panel notes that, when 
commenting on the draft descriptive part, Antigua indica ted that the correct reference was to Exhibit AB-198, 
containing material from the "V enetian" casino in Las Vegas. 
395 In its reply to Panel question No. 20, Antigua has explained how it intended to use the term "remote 
gambling."  The United States obviously uses this term in a different way. 
396  Information on how to play Quick Draw, found at www.nylottery.org. WT/DS285/R 
Page 94  
 
commercial presence (such as brick and mortar casi nos) whilst prohibiting the use of a distribution 
method that can be used for cross-border supply (suc h as the Internet).  Because of its commitment to 
national treatment of cross-border supply, the United States must allow Antiguan operators to compete with United States' brick and mortar casi nos under equal conditions of competition.  This 
does not mean that they should receive formally iden tical treatment (which is indeed unlikely in view 
of the different distribution method).  It does, how ever, mean that the Unite d States must allow fair 
competition. 
3.235  The United States notes that Antigua has asserted a lack of prosecution of violators of US 
laws restricting remote supply of gambling, and horseracing in particular.
397  The United States has 
already provided the Panel with statistics and indivi dual cases attesting to the robust enforcement of 
such laws.  To add to that information, the Organized Crime and Racketeering Section of the 
Department of Justice has compiled statistics c oncerning the number of racketeering prosecutions 
approved by the RICO Review Unit from 1992 to 20 02 alleging predicate violations of federal 
gambling statutes 18 U.S.C. § 1084, 18 U.S.C. § 1 955, or both.  In other words, these are federal 
racketeering cases that were premised on two federal gambling laws.  Over that period, the 
Department of Justice approved 90 of those cases.398  The United States does not keep statistics on the 
number of cases in which the fact pattern alleged involved international as opposed to purely domestic 
gambling activity.  However, the Deputy Chief of the Organized Crime and Racketeering Section, has 
confirmed based on his many years of personal experience that the vast majority of these 90 cases involved purely domestic betting activity, not cross-border gambling.  In fact, that is only a fraction of 
all the gambling cases pursued by the federal governme nt.  In all, US statistics show 125 cases filed 
under Section 1084 and 951 cases filed under Sec tion 1955 between 1992 a nd September 2003.  
Many of those cases involve multiple defendants, so the number of individuals involved would be 
substantially higher.  The majority of these cases involve the activities of organized crime syndicates.  
In addition there were cases filed under Section 19 52 involving illegal gambling, but those statistics 
would include other kinds of cases as well, since S ection 1952 is not limited to gambling.  As these 
numbers reflect, illegal gambling continues to be a primary enforcement program in the 24 Organized 
Crime Strike Force Units in U.S. Attorneys' offices around the United States.  All but a very few of these cases involve purely domestic illegal gambling activity.  There have only been a handful of cases (some of them with multiple defendants) th at involved supply of gambling from outside the 
United States. 
3.236  The United States notes that, regarding horseracing in particular, Antigua asserts in its 
response to the Panel's question 19 that the United States fails to prosecute providers of remote 
gambling on horseracing.  In fact there have been many reported court cases (representing just a small fraction of all prosecutions) in which the Department of Justice used federal gambling laws challenged by Antigua to prosecu te illegal wagering on horseracing.
399  Regarding the activities of 
entities such as Youbet.com, this i ssue came to prominen ce well after 1998, when the United States 
took action against Mr. Jay Cohen, Mr. Scott, and other Antigua-based remote suppliers.  It was not 
until December 2000 that amendments to the Intersta te Horseracing Act created  what some now cite, 
incorrectly, as the statutory basis for Internet ga mbling on horseracing.  The United States is aware of 
these activities and US law enforcement officials do not agree with assertions made by the service 
providers who rely on this alleged justification.  While the United States is not at liberty to discuss 
pending investigations or prosecutions, it can point to  the fact that Youbet.com itself disclosed in its 
                                                      
397 Antigua's reply to Panel question No. 19. 
398 Department of Justice document – Criminal Caseload Statistics, 18 U.S.C. 1955. 
399 Erlenbaugh v. United States , 409 U.S. 239 (1972); United States v. Southard , 700 F.2d 1 (1st Cir. 
1983), cert. denied , 464 U.S. 823 (1987); United States v. Denton , 556 F.2d 811 (6th Cir.), cert. denied , 434 U.S. 
892 (1977); United States v. O'Neill , 497 F.2d 1020 (6th Cir. 1974; United States v. Sacco , 491 F.2d 995 (9th Cir. 
1974); United States v. Swank , 441 F.2d 264 (9th Cir. 1971); United States v. Bergland , 318 F.2d 159 (7th Cir. 
1963), cert. denied , 375 U.S. 861 (1963); United States v. Athanas , 362 F. Supp. 411 (E.D. Mo. 1973); United 
States v. Yaquinta , 204 F. Supp. 276 (N.D.W.Va. 1962).  WT/DS285/R 
 Page 95 
 
 
2002 annual report that "the United States Justice Depa rtment is in the process of taking action against 
selected companies that it deems to be operating without proper licensing and regulatory approval."400  
The company added that, while it "believes that its  activities conform" to applicable laws, "this 
conclusion is not free from doubt."401  The annual report went on to  acknowledge that Youbet.com 
"faces the risk" of criminal proceedings and penalties brought by the government, and the 
United States agrees with that risk assessment.402  Finally, Antigua has raised the issue of restrictions 
on advertising for gambling services.  Antigua, however, has again fa iled to identify what laws or 
regulations on this subject, if any, within the scope  of the Panel's terms of reference allegedly embody 
this restriction.  The same is true of Antigua's new assertions a bout the Indian Gaming Regulatory Act 
("IGRA").  The IGRA is outside the Panel's terms of reference. 
3.237  Antigua  rejects the US statement with regard to  the activities of entities such as Youbet.com 
that "this issue came to promin ence well after 1998."  Page 5-4 of the NGISC Final Report discusses 
the activities of Youbet.com and footnote 14 mentions that the website was visited on 17 March 1999.  
The activities of TVG are discussed at page 2-13 of the same report. 
3.238  The United States  notes that Antigua insists that it does not ask that its services and suppliers 
be treated more favourably than US services and supp liers.  Yet at the same time, Antigua asks that 
the United States allow remote services and suppliers  to operate cross-border from Antigua when they 
are not allowed to do so domestically.  It also asks that the United States engage in the development 
of international standards to permit remote supply403 when no such standard permits such activity 
domestically.  In short, these requests by Antigua make  clear that it is in fact asking that its services 
and suppliers be allowed to do things th at domestic services and suppliers cannot do. 
6. GATS Article VI404 
3.239  Antigua  argues that the United States maintains numerous laws and regulations prohibiting 
the supply of gambling and betting services unless a sp ecific authorization has been granted. These 
are "measures of general application affecting trade in services" caught by Article VI:1 of the GATS.  Many service suppliers of United States origin have  been given an authorization to supply gambling 
and betting services.  It is impossible, however, for fo reign service suppliers to obtain an authorization 
to supply services on a cross-border basis or to even a pply for such an authorization.  Antigua submits 
that this constitutes a violation of Article VI:1 of the GATS. 
3.240  Antigua further argues that Article VI:3 of th e GATS implies that a WTO Member is obliged 
to make authorization procedures that are open to domestic service suppliers available to suppliers 
from other WTO Members that want to supply ser vices on which a commitment has been made.  By 
prohibiting all cross-border supply of gambling a nd betting services, the United States obviously does 
not fulfil that obligation with respect to those services. 
3.241  The United States argues that Antigua's claim fails both because of Antigua's failure to prove 
the existence of relevant US commitments and becau se Antigua fails to meet its burden of proof, with 
respect to any particular measure(s), that such measure(s) are not "administered in a reasonable, 
objective, and impartial manner."  Antigua has provided no evidence at all about the administration of 
any of the measures identified in its Panel request.  In fact, such measures apply equally to all services 
                                                      
400  Youbet.com, Inc., U.S. Securities and Exchan ge Commission Form 10-K Annual Report under 
Section 13 or 15(d) of th e Securities Exchange Act of 1934 for th e fiscal Year Ended 31 December 2001, 
Commission File Number: 33-13789LA (15 April 2002), available at: 
http://www.sec.gov/Archives/edgar/data/814055/000102140802005310/0001021408-02-005310.txt . 
401 Ibid. 
402 Ibid. 
403 See below Antigua's arguments regarding GATS Article XIV. 
404 In addition to the arguments presented here, see also parties' replies to Panel question No. 27 in 
Annex C of this Report. WT/DS285/R 
Page 96  
 
and service providers, regardless of origin, and ar e routinely applied against domestic as well as 
foreign lawbreakers.
405  
3.242  The United States further submits that Article VI:3 contains certain transparency requirements 
relating to the processing of applications to supply  a service in a committed sector.  Antigua has not 
shown that the United States has undertaken any commitments regarding gambling services in general 
or cross-border gambling services in particular.  Thus, Antigua cannot demonstrate that Article VI:3 is 
relevant in this dispute.  Moreover, Antigua h as pointed to no occasions on which US authorities have 
failed to inform Antiguan suppliers regarding decisi ons on their applications.  Indeed, Antigua has not 
demonstrated that its gambling service suppliers have  ever filed any relevant applications.  Rather, 
Antigua asserts that Article VI:3 "implies" something that it does not say – that "a WTO Member is 
obliged to make authorization procedures that are open to domestic suppliers available to suppliers 
from WTO Members that want to supply services on which a commitment has been made."  In fact, 
what Antigua is seeking is something that Artic le VI:3 on its face does not provide – namely, a 
requirement that the United States give foreign supp liers the right to provide services that even its 
domestic suppliers do not have a right to provide. 
3.243  Antigua  replies that given what has been demonstrated above, it is clear that the 
United States' conduct also violates Article VI:1 and Article VI:3 of the GATS.  The United States has 
made a full commitment to the cross-border suppl y of gambling and betting services, yet while it 
prohibits all cross-border supply of these servic es from Antigua, numerous operators of domestic 
origin are allowed to supply gambling and betting se rvices in the United States.  This constitutes an 
obvious violation of Article VI:1.  The United States  submits that there is no such violation because 
the laws that are used against Antiguan service supp liers "are routinely applied against domestic as 
well as foreign lawbreakers."  However, the numer ous exemptions from these laws that have been 
granted to gambling operators of United States origin  are not equally available for domestic as well as 
foreign operators. 
3.244  Antigua reiterates that Article VI:3 provision implies that all authorization procedures that are 
open to domestic service suppliers s hould be equally open to suppli ers from other WTO Members that 
wish to supply services for which a commitment h as been made.  United States domestic service 
providers can and do qualify for authorization to offer gambling and betting services.  Yet Antiguan 
service providers cannot.  The United States asserts  that "Antigua has not demonstrated that its 
gambling service suppliers have ever filed any releva nt applications," yet, on the other hand, it has 
made it very clear that all cross-border supply of gambling and betting services is prohibited.  Given 
this, Antigua fail to see why Antiguan operators woul d have filed any applications for authorization, 
much less under what authority such a filing could have been made. 
3.245  The United States  submits that Antigua's claim does not co rrespond to the text of Article VI.  
Antigua cites portions of this provi sion relating to the administration of US measures, but it identifies 
no flaws in the administration of US gambling laws.  Instead, its arguments seek to convert Article VI 
into an implicit obligation of better-than-nationa l-treatment.  Under Antigua's view, Article VI 
effectively means that Members must let cross- border suppliers supply services that are beyond the 
scope of activities permissible for suppliers with a local presence.  The text of Article VI simply does not bear that interpretation.  Antigua appears to be lieve, mistakenly, that by alleging an inconsistency 
with Article XVI or XVII, it has automatically proven, without evidence or argumentation, an 
inconsistency with Article VI.  Antigua h as failed to offer anything approaching a prima facie  case of 
violation of Article VI.  
                                                      
405 The United States notes that, since Antigua does no t even purport to challenge specific US state or 
local laws authorizing (as opposed to restricting) various forms of gambling, any assertions relating to measures 
affirmatively authorizing gambling are beyond the scope of this dispute.  WT/DS285/R 
 Page 97 
 
 
3.246  Furthermore, Antigua appears to be unable to  cite any instance in which "authorization to 
supply" a gambling service in the United States was refused.406  Moreover, Antigua states that it "has 
not been able to investigate all the criteria that all states apply to authorize a domestic operator to 
offer gambling and betting services," making it di fficult for the United States to understand how 
Antigua can credibly assert that such  procedures "by their very terms exclude Antiguan suppliers."  In 
any event, an examination of such procedures would seem to lie outside the Panel's terms of 
reference, since they were not id entified in Antigua's Panel request. 
7. GATS Article XI407 
3.247  Antigua  argues that the United States also maintain s measures that restrict international 
money transfers and payments relating to the cro ss-border supply of gambling and betting services.  
United States authorities particularly seek to restrict  payments and transfers relating to "unauthorized" 
gambling and betting services with businesses that "usu ally operate offshore in foreign locations".408 
"Legally authorized gaming transactions" are exempt from these measures.409  The purpose of these 
measures is to prevent foreign suppliers of ga mbling and betting services from offering their services 
on a cross-border basis.  To the extent that these measures reinforce the prohibition measures 
discussed in paragraph 3.75 above, they violate Ar ticles XVI:1, XVII and VI:1 of the GATS.  These 
measures also violate Article XI:1 of the GATS.  
3.248  The United States  submits that Antigua asserts, again without any argument, that US 
measures to prohibit money transfers relating to ga mbling violate Article XI:1 of GATS.  Antigua's 
claim fails first of all because of Antigua's failure  to prove the existence of a relevant specific 
commitment.  Moreover, even if such a commitme nt had been proven, Antigua has made no attempt 
to explain how or why any specific measure viol ates Article XI:1, and thus fails to make a prima facie  
case.  In asserting its claim, Antigua refers to  "measures discussed in paragraph [3.75]".  This 
paragraph makes reference to an agreement between the New York Attorney General and PayPal, Inc, 
which is found among the items in section III of the Anne x to Antigua's Panel request.  First of all, the 
United States notes the Panel's preliminary ruling that  it will not consider and examine these items as 
"separate, autonomous measures."410  In any event, the text of th e PayPal agreement provides that 
PayPal agrees to "cease processing any payments  for online gambling merchants" involving New 
York members of PayPal and gaming not expressly authorized under US law.411  It further provides 
that PayPal agrees to "block automatically (...) any credit card or debit card funded payments by 
PayPal's New York members" that should bear certain coding indicating an Internet gambling 
transaction.412  Antigua has provided no evidence that th ese provisions represent the application of  
restrictions on movements of funds across borders.  On the contrary, by their own terms they apply 
                                                      
406 Antigua reply to Panel question No. 11. 
407 In addition to the arguments presented here, see also parties' replies to Panel question No. 29 in 
Annex C of this Report. 
408 "Financial giant joins fight against online gamb ling," Press Release from the Office of the New 
York State Attorney General (14 June 2002). 
409 "Agreement reached with  Paypal to bar New Yorkers from online gambling," Press Release from 
the Office of the New York State Atto rney General (21 August 2002).  On 10 June 2003, the United States 
House of Representatives adopted legislation known as H.R.2143, the "Unlawful Internet Gambling Funding 
Prohibition Act". This is designed to unambiguously prohibit banks and other financial service providers from 
engaging in financial transactions involving gambli ng and betting services from non-United States based 
gambling operators (Section 4(2)(E)(ix) excludes "any lawful transaction with a business licensed or authorized 
by a State" thus exempting United States gambling operators from the prohibition to facilitate payment of Internet gambling services).  The second component of the United States Congress, the Senate, has yet to adopt 
this legislation.  
410 See Communication from the Panel, 29 October 2003, para. 31, in Annex B of this Report. 
411 "Assurance of Discontinuance" signed between the New York Attorney General and Paypal Inc. 
(16 August 2002), para. 20. 
412 Ibid., para. 21. WT/DS285/R 
Page 98  
 
without regard to whether the payments in question are destined for further transfer to a domestic or 
international destination.  
3.249  Antigua  replies that the United States attempts to deflect the issue of a violation of 
Article XI:1 by making use of its procedural tac tics aimed at excluding the non-legislative items from 
the scope of this dispute.  The United States stated  above that actions by Attorneys General (and the 
actions of the New York Attorney General in the cont ext of PayPal, Inc. are pa rticularly relevant here) 
do not constitute measures under the GATS because they are not binding; they are merely applications of United States domestic law.  In the interest of procedural efficiency, Antigua suggested that the 
Panel not address the issue because it does not rea lly matter for the adjudication of this dispute 
whether these actions constitute separate measure s or whether they are examples clarifying the 
meaning of the law.  
3.250  Antigua submits that in the case of the PayPal  matter, paragraphs 14 through 16 of the 
agreement referenced in its Panel request identify the legal provisions that form the basis of the 
Attorney General's action in the case.
413  The action by the New York Attorney General against 
PayPal confirms that these legal provisions can be  used to stop money transfers to Antiguan gaming 
operators.  If the United States would somehow dis pute that this action by the New York Attorney 
General is correctly based on United States law,  this would be another reason for Antigua and 
Barbuda to withdraw its suggestion to the Panel not  to examine the measures listed in Section III of 
the Annex to its Panel request as separate measures.   If, contrary to what the United States argued in 
its request for preliminary rulings, such an action is not based on legislation it becomes a separate "measure" in its own right, even within the restri ctive interpretation of this term advanced by the 
United States.  With regard to the substance of th is matter, the United States argues that the Attorney 
General's action applies to any Internet gambling transaction and is not specifically aimed at the cross-border supply of such services.  Not only is  that irrelevant, but it is also inaccurate.  
Paragraph 20 of the PayPal agreement provides th at PayPal shall cease processing payments "other 
than gaming transactions that are expressly author ized under New York law."  Furthermore, the 
New York Attorney General has openly stated that the real objective of his actions against financial 
intermediaries is to stop gambling businesses that  "usually operate offshore in foreign locations, 
beyond the enforcement power of local authorities."
414  Indeed, there are no measures in New York or 
elsewhere in the United States that seek to stop fina ncial transfers in relation to gambling transactions 
that are considered lawful in the United States.  
3.251  The United States  reiterates that Antigua's assertion that some US measure or measures 
violates Article XI, which deals with "restrictions  on international transfers and payments," is 
completely unsubstantiated.  Anti gua offered no theory as to how or why a particular measure might 
violate Article XI, and it has conceded that the onl y example it cited in this regard – an agreement 
between the New York Attorney General and Pay Pal,  Inc. – is not being challenged as such.  This 
empty assertion is emblematic of Antigua's complete  failure to offer evidence and argumentation in 
support of its substantive claims.  To the extent th at Antigua means to rely on items cited in the 
PayPal agreement, it bears the burden of providi ng evidence and argumentation concerning such 
items. 
3.252  Moreover, insofar as Antigua is citing this agre ement as evidence of the application of other 
measures, its arguments are misplaced.415  The Paypal agreement discusses New York gambling laws, 
but it does not say that such laws bar international payments and transfers for gambling services.  The 
                                                      
413 "Assurance of Discontinuance" signed between the New York Attorney General and Paypal Inc. 
(16 August 2002). 
414 "Ten Banks End Online Gambling with Credit Cards", Press Release from the New York Attorney 
General (11 February 2003), p. 2;  see  also "Financial Giant Joins Fight Against Online Gambling", Press 
Release from the New York Attorney  General (14 June 2002), p. 1. 
415 Antigua's response to Panel's question 29.  WT/DS285/R 
 Page 99 
 
 
agreement itself is not an application of those laws  as such;  rather, it is a mutual settlement of a 
disputed matter entered into in the exercise of the settlement authority po ssessed by both parties.416  
Such settlements reflect only the parties' anticipa tion that one or more criminal penalties might be 
applied, and the crafting of an alternative solution agreed to by them – a solution that often does not 
resemble the actual application of the criminal pena lties.  The United States therefore submits that the 
voluntary remedies settled upon in the Paypal agre ement are not probative of the meaning or 
application of the laws that gave rise to that di spute.  Moreover, both the Paypal agreement and the 
underlying laws are neutral regarding the destination of payments.  The fact that Paypal is permitted 
under the agreement to make transfers for forms of  gambling that are lawful in New York does not 
indicate otherwise.  Such transfers can be to domestic  or international destinations, as can transfers for 
unlawful gambling. 
8. GATS Article XIV417 
3.253  Antigua  observes that it is possible that the United States may try to invoke one or more of 
the general exceptions of Article XIV of the GATS.  It would of course be inconsistent for the 
United States to seek to do so given its principa l position during consultations that it has made no 
commitment in relation to gambling and betting servi ces.  At the DSB meeting of 24 June 2003 the 
United States nevertheless stated that cross- border gambling and betting services are prohibited 
because of "the social, psychological dangers an d law enforcement problems that they created, 
particularly with respect to Internet gambling and betting."418  The United States also expressed 
"grave concerns over the financial and social risks po sed by such activities to its citizens, particularly 
but not exclusively children."419  Antigua also points out that in a Note, the WTO Secretariat states, 
with regard to the protection of public morals a nd the maintenance of public order under Article XIV, 
that "[M]easures to curb obscenity or to prohibit Internet gambling might well be justified on these 
grounds."420  Article XIV of the GATS is an "affirmative defence" and, if the United States were to 
invoke it, the burden of proof would be on the United States.421  Therefore, it is for the United States 
to make its case under Article XIV and for Antigua to  respond.  In the interest of procedural 
efficiency, Antigua nevertheless submits a number of  general considerations on the interpretation of 
Article XIV of the GATS.  Of course, Antigua will only be able to respond in full to a possible Article XIV defence when (and if) the United States presents one.  
3.254  Antigua notes that Article XIV of the GATS has not yet been interpreted by panels or the 
Appellate Body. However, the interpretation and ap plication of Article XX of the GATT 1994 (the 
corresponding GATT provision) by the Appellate  Body, WTO panels and GATT panels provides 
useful and relevant guidance, particularly so because the text of Article XIV of the GATS and 
Article XX of the GATT 1994 is largely identical.  Th e "chapeau" of both provisions is identical but 
for the reference to "trade in services" in Article  XIV of the GATS (as opposed to the reference to 
"international trade" in Article XX of the GATT 1994).  The subparagraphs of Article XIV of the 
GATS that the United States may tr y to invoke in this case use the pivotal term "necessary" to 
establish a connection between the s ubparagraph and the chapeau.  The term "necessary" is used in a 
similar way in some of the subpara graphs of Article XX of the GATT 1994.  In view of the similarity 
between Article XIV of the GATS and Article XX of the GATT 1994, Antigua submits that, just like 
Article XX of the GATT 1994, Article XIV of th e GATS requires a two-tiered analysis: first, 
                                                      
416 "Assurance of Discontinuance" signed between the New York Attorney General and Paypal Inc. 
dated 16 August 2002., para. 10. 
417 In addition to the arguments presented here, see also parties' responses to panel's questions 44 and 
45 in Annex C of this Report. 
418 WT/DSB/M/151, para. 47. 
419 Ibid.  
420 The Work Programme on Electronic Commerce , Note by the Secretariat, S/C/W/68 
(16 November 1998), para. 26. 
421 Appellate Body Report on US – Wool Shirts and Blouses , p. 16 (with regard to GATT Article XX). WT/DS285/R 
Page 100  
 
provisional justification of a measure as "necessar y" under one of the subpa ragraphs and, second, 
further assessment of the measure under the "chapeau."
422 
3.255  In Korea – Various Measures on Beef , the Appellate Body confirmed the "necessary" test 
adopted by the Panel in US – Section 337423, i.e. that a measure is not "necessary" when "a WTO-
consistent alternative measure which the Member c oncerned could 'reasonably be expected to employ' 
is available, or whether a less WTO-inc onsistent measure is 'reasonably available'."424  I n  Korea – 
Various Measures on Beef , the Appellate Body has also "outlin ed" a weighing and balancing process 
that is comprehended in the "reasonable a lternative" test of the GATT Panel report US – Section 337 : 
"It seems to us that a treaty interpreter assessing a measure claimed to be necessary to 
secure compliance of a WTO-consistent law or regulation may, in appropriate cases, 
take into account the relative importance of  the common interests or values that the 
law or regulation to be enforced is intended to protect.  The more vital or important 
those common interests or values are, the ea sier it would be to accept as 'necessary' a 
measure designed as an enforcement instrument.  
There are other aspects of the enforcement measure to be considered in evaluating 
that measure as 'necessary'.  One is the exte nt to which the measure contributes to the 
realization of the end pursued, the securing of compliance with the law or regulation at issue.  The greater the contribution, the more easily a measure might be considered 
to be 'necessary'.  Another aspect is th e extent to which the compliance measure 
produces restrictive effects on international commerce
425, that is, in respect of a 
measure inconsistent with Article III:4, restrictive effects  on imported goods .  A 
measure with a relatively slight impact upon imported products might more easily be 
considered as 'necessary' than a measure with  intense or broader restrictive effects.  
In sum, determination of whether a meas ure, which is not 'indispensable', may 
nevertheless be 'necessary' within the c ontemplation of Article XX(d), involves in 
every case a process of weighing and balancing a series of factors which prominently 
include the contribution made by the complia nce measure to the enforcement of the 
law or regulation at issue, the importance of the common interests or values protected by that law or regulation, and the accompan ying impact of the law or regulation on 
imports or exports."
426  
3.256  Antigua notes that the dispute on Korea – Various Measures on Beef  concerned the 
application of Article XX(d) of the GATT 1994.  Wh en the Appellate Body interpreted Article XX(b) 
in EC – Asbestos , it referred back to its analysis of "necessary" in Korea – Various Measures on 
Beef.427  This shows that the Appellate Body's analysis in Korea – Various Measures on Beef  does not 
exclusively apply to Article XX(d) of the GATT 1994  but is likely to apply by analogy to all similar necessity tests, including those of Article XIV of the GATS.  
3.257  In its report on US – Shrimp , the Appellate Body described Article XX of the GATT 1994 as 
requiring the following: 
                                                      
422 Appellate Body Report on US – Gasoline , p. 22; Appellate Body Report on US – Shrimp , 
paras. 119-121. 
423 GATT Panel Report on US – Section 337, BISD 36S/345. 
424 Appellate Body Report on Korea – Various Measures on Beef , para. 166. 
425 (original footnote )  We recall that the last paragraph of the Preamble of the GATT of 1994 reads as 
follows:  'Being desirous of contributing to these objectives by entering into reciprocal and mutually 
advantageous arrangements directed to the substantial reduction of tariffs and other barriers to trade  and to the 
elimination of discriminatory treatment in international commerce. '" (emphasis added) 
426 Appellate Body Report on Korea – Various Measures on Beef , paras. 162-164. 
427 Appellate Body Report on EC – Asbestos , paras. 171-172.  WT/DS285/R 
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"[A] balance must be struck between the right of a Member to invoke an exception 
under Article XX and the duty of that same Member to respect the treaty rights of the 
other Members. To permit one Member to abuse or misuse its right to invoke an 
exception would be effectively to allow that Member to degrade its own treaty obligations as well as to devalue the treaty ri ghts of other Members.  If the abuse or 
misuse is sufficiently grave or extensive,  the Member, in effect, reduces its treaty 
obligation to a merely facultative one and di ssolves its juridical character, and, in so 
doing, negates altogether the treaty right s of other Members.  The chapeau was 
installed at the head of the list of "Gener al Exceptions" in Article XX to prevent such 
far-reaching consequences."
428 
3.258  In US – Shrimp , the Appellate Body found that the United States regulation at issue did not 
meet the chapeau's test because:  (i) it imposed a "r igid and unbending" standard that left no scope for 
taking into account other specific policies and measures that an exporting country may have adopted to protect the general interest objective at issue;
429  (ii) it imposed a "rigid  and unbending" standard on 
other countries that did not take into account the conditions prevailing in the 'exporting countries;430 
and (iii) it had made no effort to pursue internati onal cooperation with releva nt countries in order to 
deal with the policy concerns at issue before imposing an import ban.431 
3.259  In US – Gasoline , the Appellate Body found that the words "discrimination between 
countries," in the chapeau of Article XX of the GATT 1994 covers discrimination between the 
exporting and importing country (national treatme nt) as well as discrimination between exporting 
countries (most favoured nation treatment).432  
3.260  The United States  argues that Antigua has failed to make out its case.  Indeed, it is unable to 
make out a case for the simple reason that there is no breach of any US GATS obligation.  It is 
therefore unnecessary for the Panel to examine Antigua 's claims in light of Article XIV of GATS.  
Nonetheless, the United States believes that, in orde r to develop the fullest possible appreciation of 
the scope and gravity of the issues at stake in this  dispute, it is important to understand the vital policy 
objectives served by US measures restricting gambling.   In so doing, these US measures would easily 
meet the requirements of Article XIV.  The fact that these measures so clearly fall within Article XIV also serves to confirm that it would have been inco mprehensible for the Unite d States to make them 
the subject of a specific commitment. 
3.261  The United States notes that Antigua mentioned three statutes: 18 U.S.C. § 1084, 18 U.S.C. 
§ 1952; and 18 U.S.C. § 1955.  Since the "total prohibition" asserted by Antigua is not a notion 
capable of any independent existence under US law,  an examination of Article XIV can only take 
place in the context of these specific measures.  The United States therefore addresses the following 
discussion to the origins, operation, and purpose of the three statutes that Antigua has deigned to 
mention in the course of its arguments.   
3.262  Following the inauguration of President John F. Kennedy, the US Department of Justice 
launched an all-out assault on organized crime in the Un ited States.  As part of that effort, Attorney 
General Robert F. Kennedy proposed the Attorney General's Program to Curb Organized Crime and 
Racketeering.  Sections 1084 and 19 52 of Title Eighteen, United States Code, formed part of that 
program.  Congress enacted them in 1961.  Explaining the overall effect of his program, including the portions that would become §§ 1084 and 1952, Atto rney General Kennedy observed that organized 
                                                      
428 Appellate Body Report on US – Shrimp , para. 156. 
429 Ibid., para. 163.  
430 Ibid., para. 177. 
431 Ibid., para. 171. 
432 Appellate Body Report on US – Gasoline , pp. 23–24. WT/DS285/R 
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crime posed an "acute" danger to the United Stat es, and that "the need for action is clear."
433  The 
question, in his words, was "what can be done e ffectively to curtail these hoodlums and racketeers 
who have become so rich and so powerful."  His answer: 
"These people use interstate commerce and interstate communications with impunity 
in the conduct of their unlawful activities.  If we could curtail their use of interstate 
communications and facilities, we could inflic t a telling blow to their operations.  We 
could cut them down to size. 
Mr. Chairman, our legislation is mainly  concerned with effectively curtailing 
gambling operations.  And we do this, Mr. Chairman, because profits from illegal gambling are huge and they are the primary source of the funds which finance 
organized crime, all throughout the country."
434 
3.263  The United States argues that Attorney General Kennedy emphasized that the goal of his 
package would not be to displace state laws restri cting gambling, but to aid in their enforcement.435  
Noting that federal law enforcement work in other ar eas had been "effective" and "helpful to local law 
enforcement," he urged that similar enforcemen t cooperation between federal and state authorities 
was "essential in getting action against organized cr ime, which is so well organized and so well 
entrenched on a multistate basis that  local law enforcement often is vi rtually powerless to act without 
aid and assistance of the federal government."436 
3.264  The United States reiterates that Section 1084 pr ohibits a person in the business of betting or 
wagering from knowingly using a wire communication f acility to transmit in interstate or foreign 
commerce bets or wagers or information assisting in  the placing of bets or wagers.  As previously 
noted, this statute does not prevent the cross-border supply of gambling information so long as the 
information assisting in the placing of certain types of bets or wagers is being transmitted from a state 
or foreign country where such wagering is legal to a state or foreign country where wagering on the same event is legal, or if the informa tion is being transmitted for news reporting.
437  T h e  m a i n  
purposes of § 1084, as articulated at the time of its  consideration by Congress, are to aid in the 
enforcement of state and local laws and, in so doi ng, to suppress organized gambling.  The legislative 
history describes them in the following terms: 
"The purpose of the bill is to assist the various  States and the District of Columbia in 
the enforcement of their laws pertaining to gambling, bookmaking, and like offences 
and to aid in the suppression of organized  gambling by prohibiting the use of wire 
communication facilities which are or will be used for the transmission of bets or 
wagers and gambling information in interstate and foreign commerce."438 
                                                      
433 Kennedy testimony, p. 11. 
434 Ibid., p. 2 ("Organized crime is nourished by a number of activities, but the primary source of its 
growth is illicit gambling.  From huge gambling profits flow the funds to bankroll the other illegal activities I 
have mentioned including the bribery of local officials."). 
435 Ibid. 
436 Ibid. 
437 18 U.S.C. § 1084(b). 
438 House of Representatives Report No. 87-967, pp. 1-2 (1961).  See  also Kennedy testimony, p. 6 ("It 
cannot be overemphasized that this bill is designed, first to assist the States and te rritories in enforcement of 
their laws pertaining to gambling and like offenses.  Second, the bill would in that regard help suppress 
organized gambling ....") (original emphasis omitted).  Attorney General Kennedy emphasized that the 
legislation was not aimed at "a social wager between friends."  Ibid.,  US court decisions have confirmed these purposes.  For example, a 1983 decision of  a federal appellate court found that  § 1084 was enacted to assist the 
states in enforcing their own laws against gambling.  See United States v. Southard , 700 F.2d 1 (1
st Cir. 1983), 
cert. denied , 464 U.S. 823 (1983).  WT/DS285/R 
 Page 103 
 
 
According to Attorney General Kennedy, the restri ctions on remote supply of gambling reflected in 
§ 1084 were needed as an additional enforcemen t tool because the use of wire communications 
technologies for the dissemination of gambling in formation frustrated local law-enforcement 
efforts.439 
 
3.265  The United States reiterates that Section 1952 of Title 18, United States Code, prohibits 
travelling in interstate or foreign commerce, or usi ng the mails or any facility in interstate or foreign 
commerce, with intent to, inter alia,  "distribute the proceeds of any unlawful activity" or "otherwise 
promote, manage, establish, carry on, or facilitate  the promotion, management, establishment, or 
carrying on, of any unlawful activity, and thereafte r perform[] or attempting to perform" such act.  
The term "unlawful activity" is defined to include "any business enterprise in volving gambling ... in 
violation of the laws of the State in which they are committed or of the United States."  The primary purpose of § 1952, as articulated by Attorney Genera l Kennedy, is to enable the Federal Government 
to "take effective action against the racketeer w ho conducts an unlawful business but lives far from 
the scene in comfort and safety."
440  In his words, "[t]he target clearly is organized crime."441  
Government investigations made it clear that "onl y the Federal Government can shut off the funds 
which permit the top men of organized crime to live far from the scene and, therefore, remain immune 
from the local officials."442 
3.266  Section 1955 of Title 18, United States Code, was enacted by Congress as part of Title VIII of 
the Organized Crime Control Act of 1970.  In the Statement of Findings prefatory to that Act, 
Congress described the threat posed by organized crime in grave terms: 
"(1) organized crime in the United States is a highly sophisticated, diversified, and 
widespread activity that annually drains billions of dollars from America's economy 
by unlawful conduct and the illegal use of for ce, fraud, and corruption;  (2) organized 
crime derives a major portion of its powe r through money obtained from such illegal 
endeavours as syndicated gambling, loan sharking, the theft and fencing of property, 
the importation and distribution of narco tics and other dangerous drugs, and other 
forms of social exploitation; (3) this money and power are increasingly used to infiltrate and corrupt legitimate business a nd labour unions and to subvert and corrupt 
our democratic processes;  (4) organized cr ime activities in the United States weaken 
the stability of the Nation's economic system, harm innocent investors and competing organizations, interfere with free competition,  seriously burden interstate and foreign 
commerce, threaten the domestic security, and undermine the general welfare of the 
Nation and its citizens."
443 
3.267  The United States notes that Section 1955 pr ohibits conducting, financing, managing, 
supervising, directing, or owning all or part of an illegal gambli ng business.  Section 1955(b) defines 
the term "illegal gambling business" as "a gambling bus iness which – (i) is a violation of the law of a 
State or political subdivision in which it is conducted;  (ii) involves five or more persons who conduct, 
finance, manage, supervise, direct, or own all or part  of such business; and (iii) has been or remains in 
substantially continuous operati on for a period in excess of thirty days or has a gross revenue of 
$2000 in any single day."  Congress articulated three broad reasons for including § 1955 in the Organized Crime Control Act.  First, the Congress and the President viewed gambling income as the 
"lifeline of organized crime" and the means by which it financed other activities.
444  Second, Congress 
                                                      
439 Kennedy testimony, p. 5. 
440 Kennedy testimony, p. 15. 
441 Ibid., p. 16. 
442 Ibid. 
443 18 U.S.C. § 1961 note. 
444 116 Congressional Record H9711 (daily ed. 7 October 1970) (Statement by Rep. Poff).   WT/DS285/R 
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and the President expressed concern that gambling "preys upon society," especially the poor.
445  
Third, from a law enforcement standpoint, "gambling is more susceptible than most organized crime 
activities to detection and prosecution."446  Commenting on the law enforcement purpose in particular, 
a legislator observed that: 
"[T]itle VIII's expansion of the Federal jurisdiction over large scale gambling cases 
will improve local efforts [to enforce antiga mbling laws], not merely by providing an 
impetus for effective and honest local law en forcement, but also by making available 
to assist local efforts the expertise, man power, and resources of the Federal agencies 
which under existing Federal antigambling st atutes have developed high levels of 
special competence for dealing with gambling and corruption cases."447 
Several US courts have confirme d and elaborated on these purposes.448  For example, the courts have 
confirmed that § 1955 is a measure against organized crime449, and that it provi des an enforcement 
tool in cases where local officials fail to prosecute illegal gambling.450 
 3.268  Because all of the foregoing measures operate in part as measures to enforce state restrictions 
on gambling, it may be useful for the United States to elaborate on the policy concerns that underlie 
state-level restrictions.  Generally speaking, stat e laws prohibiting or restricting various forms of 
gambling rest on state policies relating to public health, safety, welfare, and the preservation of good order.  The examples of state gambling policies submitted by the United States provide further elaboration on these state policies. 
3.269  The United States submits that Article XIV of the GATS is clear that "nothing" in the GATS 
"shall be construed to prevent the adoption or enforcement by any Member of measures" falling 
within the terms of that article.  Accordingly,  there can be no doubt that the United States may 
maintain sections 1084, 1052, and 1955 since they meet the requirements of Article XIV, over and 
above the fact that they are also consistent with the remainder of the GATS.  In order to meet the 
requirements of Article XIV, a measure must fall within the scope of para graphs (a) to (e) of 
Article XIV, and it must meet the requirement s of the introductory provisions in the chapeau  of 
                                                      
445 Ibid.  See  also House of Representatives  Rep. No. 91-1549, p. 53 (1970), reprinted in 1970 
U.S.C.C.A.N. 4007, 4029, ("The provisions of this title [referring to 18 U.S.C.§ 1955] do not apply to gambling 
that is sporadic or of insignificant monetary proportions.  It is intended to reach only those persons who prey 
systematically upon our citi zens and whose syndicated operations are so continuous and so substantial as to be 
of national concern, and those corrupt State and local officials who make it possible for them to function."). 
446 116 Congressional Record H9711 (Statement by Rep. Poff). 
447 Ibid., at H9712. 
448 See, e.g. , United States v. Scavo , 593 F.2d 837, 841 (8th Cir. 1979) (In enacting § 1955, Congress 
did not intend to make all gambling businesses subject to federal prosecution; rather the statute was "intended to 
reach only those persons who prey sy stematically upon our citizens and wh ose syndicated operations are so 
continuous and so substantial as to be of national con cern.."  (quoting House of Representatives Rep. No. 1549, 
91st Cong. 2d. Sess. (1970)); United States v. Hawes , 529 F.2d 472, 478 (5th Cir. 1976) (It is not the purpose of 
§ 1955 to prohibit gambling, but only to prohibit "illegal" gambling of such a size as would affect interstate commerce.  Organizers of illegal gamb ling activities are among the organized criminal elements targeted by 
Congress.). 
449 United States v. Box, 530 F.2d 1258, 1264-65 (5th Cir. 1976) (Clearly, the dominant concern 
motivating Congress to enact § 1955 was that large-scale gambling operations in this country have been closely 
intertwined with large-scale organized crime, and indeed may have provided the bulk of the capital needed to finance the operations of organized crim e.  The target of the statute was la rge-scale gambling operations – local 
"mom and pop" bookmaking operations were to be left to state law.). 
450 United States v. Nugent , 389 F. Supp. 817, 819 (W.D. La. 1975) (The legislative history of 
18 U.S.C. § 1955 indicates Congress' intention to place in  the hands of the prosecutor  a weapon with which to 
attack the corruption of local law en forcement personnel and public officials by persons involved in illegal 
gambling operations.).   WT/DS285/R 
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Article XIV.451  Article XIV has not been interpreted through dispute settlement.  Some of its 
provisions are similar to provisions of Article XX of the GATT, while others differ in certain respects.  
3.270  The operative language in the opening phrases of Article XIV(c) of the GATS is virtually 
identical to Article XX(d) of the GATT 1994.  Article  XIV(c) protects measures that are "necessary to 
secure compliance with laws or regulations which ar e not inconsistent with the provisions of [the 
GATS]."  The text states that these measures include, inter alia,  laws or regulations relating to "the 
prevention of deceptive and fraudulent practices"452 and laws or regulations relating to "safety."453  
The text indicates that this GATS provision appli es to laws that are (i) designed to "secure 
compliance" with laws or regulations not themselve s inconsistent with some provision of the GATS, 
and (ii) "necessary" to that end.454 
3.271  The United States argues that, first, a panel mu st determine whether the measure in question 
is designed to ensure compliance wi th other WTO-consistent measures.455  Article XIV(c)(i)-(iii) 
provides examples of these types of measures – exam ples that are intended to be illustrative rather 
than exhaustive, as indicated by the use of the word "including."  Second, a panel must examine 
whether a measure is "necessary."456  In doing so it should apply the ordinary meaning of the term, 
which has been described in the fo llowing manner by the Appellate Body: 
"The word 'necessary' normally denotes something 'that cannot be dispensed with or 
done without, requisite, essential, needful'.  We note, however, that a standard law 
dictionary cautions that: 
[t]his word must be considered in the connection in which it is used, 
as it is a word susceptible of various meanings. It may import 
absolute physical necessity or in evitability, or it may import that 
which is only convenient, useful, appropriate, suitable, proper, or 
conducive to the end sought. It is an adjective expressing degrees, and may express mere convenience or that which is indispensable or an absolute physical necessity."
457 
3.272  The United States notes that this ordinary meani ng indicates that "the word 'necessary' is not 
limited to that which is 'indispensable' or  'of absolute necess ity' or 'inevitable.'"458  Moreover, the 
concept of necessity is a continuum that may extend,  depending on the nature of the interest served, 
all the way to measures that "make a contribution" to compliance.459  In the services context, a panel 
should also bear in mind the particular objects and purposes of the GATS, including recognition of the 
                                                      
451 Appellate Body Report on US – Gasoline  (interpreting Article XX of the GATT). 
452 GATS Article XIV(c)(i). 
453 GATS Article XIV(c)(iii). 
454 Appellate Body Report on Korea – Various Measures on Beef , para. 157 ("For a measure, otherwise 
inconsistent with GATT 1994, to be justified provisionally under paragra ph (d) of Article XX, two elements 
must be shown.  First, the measure must be one designed to 'secure compliance' with laws or regulations that are 
not themselves inconsistent with some provision of the GATT 1994.  Second, the measure must be "necessary" 
to secure such compliance.") 
455 Panel Report on Canada–Periodicals,  para. 5.9 (interpreting Article XX of the GATT). 
456 The United States notes that the views expres sed here regarding the term "necessary" under 
Article XIV of the GATS are restricted to that context, and do not necessar ily apply to the same term in other 
provisions of the GATS, or in other WTO agreements. 
457 Appellate Body Report on Korea – Various Measures on Beef , para. 160 (interpreting Article XX of 
the GATT).  
458 Appellate Body Report on Korea – Various Measures on Beef , para. 161 (interpreting Article XX of 
the GATT).  
459 Ibid.  (interpreting Article XX of the GATT). WT/DS285/R 
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"right of Members to regulate."  This includes the ri ght of a Member to heavily restrict a highly risky 
service (in this case, gambling by remote supply)  while allowing the use of a less risky service.
460 
3.273  The United States argues that Congress designed §§ 1084, 1952, and 1955 in large part to 
serve as law enforcement tools to secure compliance with other WTO-consistent US laws.  Most obviously, these statutes "secure compliance" with state laws restricting gambling and other like 
offences by enhancing the enforcement of such me asures.  Sections 1084, 1952, and 1955 make an 
essential contribution to the enforcement of state law.  Before these federal laws existed, violators of 
state gambling laws often avoided prosecution by supplying their services remotely, from locations 
out of reach of state and local law enforcement authorities.  Sections 1084 and 1952 address that 
problem by enabling federal law enforcement aut horities to pursue remote suppliers of illegal 
gambling who violate state law, even if those vi olators are beyond the reach of state or local 
authorities.  Section 1955 similarly furthers enforc ement of state laws by enabling federal authorities 
to pursue large gambling businesses that violate stat e law, especially in cases where state authorities 
are unable or unwilling to address the problem.  The design of §§ 1952 and 1955 confirms their role 
as enforcement measures, inasmuch as a violation of  state law is an express element of the offence 
described in each of those statutes.  In the case of  § 1084, the same characteristic is reflected in the 
fact that the statute includes an exception in § 10 84(b) the scope of which depends on the extent to 
which gambling activity is lawful under state law.   Moreover, as described above, the legislative 
history of these measures is painstakingly explicit in  recording the fact that they were designed in 
large part as measures to aid in the enforcement of state restrictions on gambling in situations where 
such compliance was doubtful. 
3.274  The United States argues that as to the substance and WTO-consistency of the state laws with 
which these measures are designed to secure complian ce, it suffices to note that most of them are 
among the many measures included in the CD-ROM containing copies of State and Territorial Legislation that Antigua provided to the Panel;
461  yet Antigua has failed to make out a prima facie  
case with respect to any of these measures.  Ther efore their WTO consistency can be presumed.  
Section 1952 also secures compliance with other stat e laws not challenged by Antigua, including laws 
relating to liquor, narc otics, and prostitution.462  The state gambling laws, which §§ 1084, 1952, and 
1955 help to enforce, protect fundamentally importa nt state policies relating to public health, safety, 
welfare, and the preservation of good order.  Promin ent among these is society's interest in remaining 
free from crime, and organized crime in particular.  More generally, these policies protect the public from the law enforcement, consumer protection, h ealth, and other concerns associated with gambling 
and more fully described elsewhere by the United States.
463  
3.275  As measures against organized crime, §§ 10 84, 1952, and 1955 are necessary to secure 
compliance with all the various WTO-consistent US  criminal laws violated by organized crime 
activities.  As discussed above, §§ 1084, 1952, and 1955 are clearly measures against organized 
crime, and legislative history and subsequent interp retations confirm that purpose.  Inherent in the 
concept of "organized crime" are certain types of  criminal activity in which organized crime groups 
typically engage.464  The specific crimes most closely associ ated with organized crime include, in 
                                                      
460 Appellate Body Report on EC–Asbestos,  para. 168 (interpreting Article XX of the GATT) 
("Accordingly, it seems to us perfectly legitimate for a Member to seek to halt the spread of a highly risky 
product while allowing the use of a less risky product in its place.") 
461 One relevant group of statutes not included in that selection is are the statutory age limits on 
participation in gambling activities established by every US  state.  Antigua has acknowledged the existence of 
these restrictions.  As with other state-level restrictions, §§ 1084, 1952, and 1955 are necessa ry to secure 
compliance with these laws.   
462 8 U.S.C. § 1952(b) (defining "unlawful activity" for purposes of § 1952). 
463 See above paras. 3.189-3.195. 
464 The United States notes that, in  the words of one commentator, every organized crime activity is 
made up of "more specific crimes, which constitu te what we know as organized crime."  See  Jay S. Albanese,  WT/DS285/R 
 Page 107 
 
 
addition to gambling offences, such crimes as loan sharking (i.e. , illegal lending), prostitution, the sale 
and distribution of drugs and/or  pornography, the fencing (i.e. , illegal purchase) and distribution of 
stolen property, money laundering, and labour racketeering (i.e. , the use of force or threats to obtain 
money for ensuring jobs or labour peace).465  In addition, the pursuit of these organized crime 
activities often entails acts or thr eats of murder, kidnapping, arson, robbery, bribery, and extortion, 
not to mention lesser crimes such as assault, fraud, and larceny.466  The Panel will not be surprised to 
learn that all of the foregoing offences are crimes  under the federal and/or state laws of the United 
States.  The WTO consistency of these US crimin al laws is not in question, nor could Antigua 
seriously dispute the importance of the interests th at they serve.  Nor can it seriously question the 
importance of combating organized crime. 
3.276  The United States notes that to effectively en force these underlying criminal laws against 
organized criminals, law enforcement authorities require  special statutory tools that are adapted to the 
challenges posed by sophisticated, well-financed criminal groups.  Secti ons 1084, 1952, and 1955 are 
three such tools.467  As with terrorist groups and other criminal groups, one essential enforcement 
strategy for pursuing organized crime is to pl ace restrictions on its major sources of funds.468  
Gambling has long been recognized as a major sour ce of funds for organized crime, and clearly a 
major purpose behind the enactment of §§ 1084, 1952, a nd 1955 was to restrict that source of funds 
and ensure that it would not escape the scrutiny of law enforcement officials.469  Congress further 
confirmed the association between these specific me asures and enforcement in the field of organized 
crime when it enacted Title IX of the Organized Crime Control Ac t of 1970, known as the Racketeer 
Influenced and Corrupt Organizations Statut e, or, more commonly the "RICO" statute.470  In the 
RICO statute, Congress defined "racketeering activity" as including, inter alia,  acts indictable under 
§§ 1084, 1952, and 1955.471  
3.277  In addition, §§ 1084, 1952, and 1955 were all enacted out of the firmest possible conviction 
that they were indispensable to defeating organized crime.472  The Senate Report for the Organized 
Crime Control Act of 1970 thus stressed that: 
"What is needed here ... are new approaches that will deal not only with individuals, 
but also with the economic base through which those individuals constitute such a serious threat to the economic well-being of th e Nation.  In short, an attack must be 
                                                                                                                                                                     
The Prediction and Control of Organized Crime: A Risk  Assessment Instrument for Targeting Law Enforcement 
Efforts , p. 19, at http://www.ojp.gov/nij/interna tional/programs/ukr_pred_paper.pdf (2002). 
465 Ibid., pp. 19-20. 
466 18 U.S.C. § 1961(1)(A) (defin ing "racketeering activity" in part to include "any act or threat 
involving murder, kidnapping, gambling, arson, robbery,  bribery, extortion, dea ling in obscene matter, or 
dealing in a controlled substance or listed chemical .. wh ich is chargeable under State law and punishable by 
imprisonment for more than one year."). 
467 See above paras. 3.261-3.267. 
468 United States Attorney' Bulletin, June 1999, p. 27, available at http://www.usdoj.gov/usao/eousa/ 
foia_reading_room/usab4703.pdf ("Most crimes have some type of financial gain as the primary motive.  
Curtailing or eliminating the proceeds of criminal ac tivity can have a substantial impact on reducing crime 
overall. ... Taking the profit out of crime is also an important step in eliminating the operating capital needed to 
fund ongoing criminal activity."). 
469 See above paras.  3.262-3.267. 
470 Codified at 18 U.S.C. §§ 1961-1968. 
471 18 U.S.C. § 1961(1)(B).  
472 For example, Attorney General Kennedy testified before the U. Senate th at there was an "acute 
need" for §§ 1084 and 1952.  Kennedy testimony, p. 17.  See  also ibid., p. 5 (§ 1952: "[T]his bill is vital.  We 
need it.  Local law enforcement offici als need it.  The country needs it."). WT/DS285/R 
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made on their source of economic power itself, and the attack must take place on all available fronts."
473 
As this quotation suggests, a major goal of US law enforcement efforts against organized crime is to 
attack its sources of money and power.  
3.278  The United States notes that Article XIV(a) provides a general exception for measures that 
are "necessary to protect public morals or to mainta in public order."  The text does not elaborate on 
these provisions except to note, with respect to public  order, that "[t]he public order exception may be 
invoked only where a genuine and sufficiently serious threat is posed to one of the fundamental interests of society."
474  Article XIV(a) provides an excepti on for measures "necessary to protect 
public morals or to maintain public order."  The te rm "public order" refers to the familiar civil-law 
concept denoted in French by the expression " ordre public " and its functional counterpart in common-
law systems, the concept of "public policy" (although the latter term is also used in other contexts 
with a broader meaning).  In the words of Judge Laut erpacht, the concept of "public order" refers to 
the "fundamental national conceptions  of law, decency and morality."475   "Public morals" in turn 
refers to standards of right and wrong that can be  described as "belonging to, affecting, or concerning 
the community or nation."476  The concepts of public order and public morals are closely associated 
with restrictions on gambling.  For example, th e original use of  "public morals" in the GATT 
followed prior multilateral trade negotiations in wh ich it was well-understood that restrictions on the 
importation of lottery tickets – the forerunner of modern restri ctions on cross-border gambling – 
would fall within the public morals exception.477  Indeed, Members continue to maintain similar 
restrictions for similar reasons.478  As to Internet gambling in particular, Antigua has correctly noted 
                                                      
473 Senate Rep. No. 91-617, 91st Cong.,1st Sess., p. 79 (1969).  President Nixon similarly noted in his 
Message on Organized Crime that organized crime's "economic base is principally derived from its virtual monopoly of illegal gambling, the numbers racket, ... the importation of narcotics," and certain other crimes.  
Ibid., p. 35.  The Senate Report also incorporated th e American Bar Association' s conclusion that "[t]he 
magnitude of the [organized crime] problem makes it clear that all legitimate methods of combating organized 
crime must be utilized."  Ibid., p. 76. 
474 Article XIV, footnote 5. 
475 Case Concerning the Application of the Convention of 1902 Governing the Guardianship of Infants 
(Netherlands v. Sweden),  1958 I.C.J. 55, 90 (Judgment of 28 November) (sep. op. of J. Lauterpacht). 
476 "Public" means "of or pertaining to the people as a whole; belonging to, affecting, or concerning the 
community or nation," and "moral" means "Of or pertaining to human character or behavior considered as good 
or bad; of or pertaining to the distinction between right and wrong....".  See  New Shorter Oxford English 
Dictionary,  pp. 1827, 2204. 
477 The United States notes that the Economic Committ ee of the League of Nations put forward a draft 
convention that included an exception for "[p]rohibitions or restrictions imposed for moral or humanitarian 
reasons or for the suppression of improper traffic, prov ided that the manufacture of and trade in the goods to 
which the prohibitions relate are also prohibited or restricted in the interior of the country."  See  Abolition of 
Import and Export Prohibitions and Restriction, Comme ntary and Preliminary Draf t International Agreement 
drawn up by the Economic Committee of the League of Nations to serve as a Basis for an International Diplomatic Conference, League of Nations Doc. C.E.1.22. 1927 II.13. pp. 10, 15 (1927).  Commenting on this 
draft, the US State Department observed that the moral exception was "necessary" because of "American 
prohibitions or restrictions imposed for moral or humanitari an reasons or to suppress improper traffic relate inter 
alia to intoxicating liquors, smoking opium and narcotic drugs, lottery tickets,  obscene and immoral articles, ... 
[etc.]."  Department of State, The S ecretary of State to the Minister in Sw itzerland (Wilson), in Papers Relating 
to the Foreign Relations of the United States, 1927, p. 257 (1942) (emphasis added).  In the debate over the 
proposed exception, the representative of Egypt asked whether a prohibition on the importation of foreign 
lottery tickets would be covered by the moral exception.   The president of the c onference stated that such 
prohibitions would be covered by the exception for measures adopted for "moral or humanitarian reasons."  
International Conference for the Abolition of Import and Export Prohibitions and Restrictions, Proceedings of 
the Conference, p. 110, League of Nations Doc. C.21.M.12. 1928 II.7, p. 110 (1928). 
478 The United States argues that, for example, the 1 999 Trade Policy Review of  Israel observed that 
Israel maintained an import prohibition on "[t]ickets or  publicity items for lottery or gambling" and identified 
the reason for this prohibition as "[p]ublic morals."  Trade Policy Review - Israel - Report by the Secretariat ,  WT/DS285/R 
 Page 109 
 
 
that the WTO Secretariat in 1998 observed, with re gard to the protection of public morals and the 
maintenance of public order under Article XIV, that  "[m]easures to curb obscenity or to prohibit 
Internet gambling might well be justified on these grounds."479  In the GATS, invocation of the 
"public order" portion of this exception is limite d to measures necessary to respond to "genuine and 
sufficiently serious" threats to a fundamental interest of society.   
3.279  Remote supply of gambling raises significant c oncerns relating to the maintenance of public 
order and the protection of public morals.  The Un ited States has shown that gambling by remote 
supply is particularly vulnerable to various forms of criminal activity, especially organized crime.480  
Maintaining a society in which persons and their pr operty exist free of the destructive influence of 
organized crime is both a matter of "public mora ls" and one of "public order."  As Congress found 
when it enacted the Organized Crime Control Act, the specific threats posed by organized crime 
include, among others, social exploitation; corrupt ion and subversion of the democratic processes;  
economic losses and instability; and diminution of the domestic security and general welfare of the United States and its people.
481  These grave concerns meet the high standard for "genuine and 
sufficiently serious" threats to a fundamental intere st of society, as required in the case of "public 
order" by footnote 5 of the GATS. 
3.280  According to the United States, Antigua's own evidence dispels any possible doubt about the 
gravity of such concerns in the specific context of remote supply of gambling.  The first paragraph of 
the Bear Stearns report submitted by Antigua states that: 
"Many offshore jurisdictions, particularly those in the Caribbean, exert little or no 
regulatory control over gambling site operator s, who are for the most part unknown.  
More importantly, they are beyond the contro l of the US Justice Department.  Still, 
these sites generate up to 60% of their revenues from the vast American market.  They are a direct pipeline of dollars out of the US into virtually unknown hands.  In addition, such sites fall under loose offshore reporting requirements, so it is unclear how these funds are spent.  In our view, this uncertainty could pose a risk to national 
security from terror and/or criminal organizations. "
482 
                                                                                                                                                                     
WT/TPR/S/58, table III.8 (1999).  Similarly, the 1999 tr ade policy review of the Philippines listed limitations on 
foreign ownership of gambling operations (e.g. , racetracks) under a h eading that referred, inter alia,  to 
limitations "for reasons of ... risk to health and morals."  Trade Policy Review - The Philippines - Report by the 
Secretariat , WT/TPR/S/59, table III.11 (1999) (The document does not specify precisely which reason is 
associated with the gambling ownership restriction, but from the context of the document it is reasonable to 
infer that restriction is based on "morals" or "health and morals.").  Numerous countries prohibit imports of 
gambling paraphernalia on GATT Article XX grounds, although it is not always possible to discern whether these restrictions are attributed to public morals or to some other Article XX exception.  To cite just one 
example, El Salvador "operates import prohibitions on a limited number of products, generally on grounds of 
health, security, morality or environmental protection," and includes gambling paraphernalia on the list of such products.  See  Trade Policy Review - El Salvado r - Report by the Secretariat,  WT/TPR/S/111, para. 50 and 
table III.5 (2003). 
479 The Work Programme on Electronic Commerce , Note by the Secretaria t, 16 November 1998, 
S/C/W/68, para. 26.  While not legally binding, this observation by the Secretariat further confirms the 
association between restrictions on gambling and the pr otection of public morals and maintenance of public 
order. 
480 See above paras. 3.189-3.192. 
481 See above para. 3.266 (quoting Statement of Findings accompanying the Or ganized Crime Control 
Act of 1970). 
482 See Bear Stearns, E-Gaming: A Giant Beyond Our Borders , (September 2002), p. 1 (emphasis 
added).  See  also ibid., p. 40, (discussing Antigua and five other jurisdictions, and concluding that "although 
these major markets provide for some of the most lucrative and popular gaming sites on the Internet, they also 
provide for the least amount of public in formation.  In our view, this lack of access to information increases the 
risk profile of the region tremendously.  As we stated earlier in this report, we believe that the Caribbean WT/DS285/R 
Page 110  
 
3.281  The United States argues that Antigua's own evid ence thus confirms that the United States is 
not alone in viewing remote supply of gambling as a potential vehicle for organized crime and other 
forms of lawlessness that threaten public order and public morals.  In addition, the United States has 
shown that remote supply greatly expands gambli ng opportunities into settings – such as homes and 
schools – where it has not traditionally been present and is not subject to the controls present in other 
settings.
483  By thus expanding gambling from controlled  settings into uncontrolled settings, remote 
supply expands the audience of potential gamblers – most notably by making it easy for children to 
gamble.  While adults can be expected to exerci se their own moral judgment, society recognizes that 
children have a less well-develope d sense of right and wrong.  Thus the availability of gambling in 
uncontrolled settings naturally provok es concerns about public morals that are present to a far lesser 
degree when gambling is conducted away from hom es and schools and subject to verifiable age 
controls.484  
3.282  The United States has already shown that §§ 1084,  1952, and 1955 are indispensable tools in 
the fight against organized crime and other forms of criminality.485  At the same time, these statutes 
serve to suppress betting by remote supply, and are in that respect necessary to prevent the intrusion 
of gambling into uncontrolled setti ngs.  Taken together, these public or der and public morals concerns 
should lead a panel to conclude that remote supply of gambling poses a grave threat to the 
maintenance of public order and the protection of public morals in the United States – certainly 
enough so to justify the maintenance and enforcement of origin-neutral restrictions on gambling such 
as those found in §§ 1084, 1952, and 1955. 
3.283  The United States submits that the chapeau of Article XIV imposes an additional requirement 
that any measure provisionally justifiable under (a) through (e) not be "applied in a manner which 
would constitute a means of arbitrary and unjustif iable discrimination between countries where like 
conditions prevail, or a disguised  restriction on trade in services."  The purpose of the chapeau of 
Article XIV is to avoid abuse or misuse of the pa rticular exceptions set forth in Article XIV(a) 
through (e).486  The restrictions in §§ 1084, 1952, and 1955 meet the requirements of the chapeau.  
None of these measures introduces any discrimination on  the basis of nationality.  On the contrary, as 
the United States has repeatedly observed, they appl y equally regardless of national origin.  Therefore 
the only question with respect to th e chapeau is whether these laws c onstitute "a disguised restriction 
on trade in services."  Antigua has asserted that th e real purpose of US restrictions on remote supply 
of gambling is protectionism.  As the foregoing discussion of the legislative history of §§ 1084, 1952, and 1955 amply illustrates, Antigua is mistaken.  These measures were enacted long before Internet 
gambling was even thought possible, and for reasons having nothing to do with protection of domestic 
industry.  There is simply no basis on which to assert  that they constitute "a disguised restriction on 
trade in services."   On the contrary, their applica tion is a legitimate and non-discriminatory response 
to the continuing threats posed by remote supply of gambling – including those newer threats posed by Internet gambling. 
3.284  Antigua's comments suggest a belief on its part that the United States should be required to 
address its concerns about remote supply of ga mbling by negotiating international regulatory 
standards.
487  This suggestion suffers from at least two basic flaws.  First, as a legal matter, nothing in 
the text of the GATS requires such action.  S econd, as a factual matter, the absence of any US 
                                                                                                                                                                     
market, in which we believe a large number of operator s are domiciled, could present a threat to national 
security given the lack of  available information.") 
483 NGISC Final Report, pp. 5-1 ("[O]n-line wagering promises to revolutionize the way Americans 
gamble because it opens up the possibility of immedi ate, individual, 24-hour access to the full range of 
gambling in every home.").  See also US arguments above, para. 3.18 (discussing classification of gambling as 
vice activity and concerns about its spread into homes, schools, etc.).   
484 See above paras. 3.193 and 3.18. 
485 See above paras. 3.261-3.267. 
486 Appellate Body Report on US – Gasoline,  pp. 22 and 25. 
487 See for instance above para. 3.14.  WT/DS285/R 
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domestic regulatory regime that permits the remote supply of gambling services makes it unreasonable for Antigua to expect the United States to seek negotiations to permit such a regime for 
its cross-border suppliers.  The United States recogni zes that certain other countries – including, most 
obviously, Antigua itself – have determined that they can regulate the remote supply of gambling services in a manner that those countries consider to be sufficient.  Indeed, each Member has the right 
to determine for itself the level of law enforc ement to provide through its domestic laws and 
regulations.
488 
3.285  The United States reiterates that the Panel has before it extensive evidence of the study and 
debate that has taken place in the United Stat es concerning the possible regulation of remotely 
supplied gambling services.  In spite of all of this  study and debate, the United States has not found it 
possible to develop regulations for the remote s upply of gambling on a domestic basis that would 
provide sufficient levels of law enforcement to satisfy the priorities of US regulators.489  Given this 
context, it is unreasonable to expect the United States  to negotiate an "agreed regulatory context" for 
cross-border supply of such services.  In closing, th e United States wishes to reiterate that there is no 
need for the panel to reach Article XIV issues in orde r to resolve this dispute.  While the maintenance 
and enforcement of US restrictions on gambling cl early serves the interests identified by the GATS 
negotiators in Article XIV as being of overridi ng importance, it does so in a non-discriminatory 
manner that is in all respects fully consistent with the GATS. 
3.286  Antigua  notes that, after having never mentioned Ar ticle XIV of the GATS, the United States 
for the first time raised this provision on 9 January 2003.  Even so, it is not entirely clear that the 
United States is actually asserting Article XIV as a defence.  The United States says it is "unnecessary 
for the Panel to examine Antigua' s claims in the light of Article XIV" but that its measures "would  
easily meet the requirements of Article XIV."  Article XIV provides an affirmative defence and if the United States does not invoke it, then the Panel should not address it.  Antigua does certainly not  
request the Panel to apply Article XIV and refers to the language already quoted and contained in 
paragraph 3.285 above "the United States wishes simply  to reiterate that there is no need for the panel 
to reach Article XIV issues in order to resolve this  dispute."  To the extent that the United States seeks 
to somehow raise an "informal" Article XIV type de fence, it does so only with regard to three federal 
statutes and not with regard to other federal or state statutes.  The three federal statutes at issue are the 
Wire Act, the Travel Act and the Illegal Gambling Business Act.  With rega rd to these three federal 
statutes the United States essentially raises three Article XIV type defences. 
3.287  Antigua states that, first, the United States submits  that the three statutes are "necessary" "for 
the enforcement of state laws on gambling" and are therefore covered by Article XIV(c).  
Article XIV(c) exempts measures necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Agreem ent."  The United States says that its state laws are 
consistent with the GATS and that therefore the federal laws enhancing those laws are exempted 
under Article XIV(c).  This reasoning is obviously ci rcular and merits only a brief response.  An 
Article XIV issue can only arise when a WTO Me mber violates its GATS obligations.  Antigua 
                                                      
488 Appellate Body Report on Korea – Various Measures on Beef,  para. 176 ("It is not open to doubt 
that Members of the WTO have the right to determine for themselves the level of enforcement of their WTO consistent laws and regulations."). 
489 As the United States has pointed out, among the issues that have prevented the US regulators from 
authorizing remote supply of gambling are the significantly greater regulatory concerns associated with remote 
supply of gambling, See above paras. 3.189-3.195, including the law enforcement and other concerns described 
above that led to the enactment of, an d require the enforcement of, §§ 1084, 1952, and 1955.  Internet gambling 
poses such severe regulatory difficulties that the US National Association of A ttorneys General ("NAAG"), 
representing state law enforcement officials, has taken the unusual step of asking the federal government to 
enact new legislation to make US restrictions on Internet gambling more explicit.  See NGISC Final Report, pp. 5-9.  As the NGISC observed, "NAAG's position on In ternet gambling is a rare stance by the association in 
support of increased federal law enforcement and re gulation and is a clear indication of the regulatory 
difficulties posed by Internet gambling."  Ibid. WT/DS285/R 
Page 112  
 
challenges the lack of market acc ess and the absence of equal cond itions of competition.  To the 
extent that United States laws contribute to this vi olation they cannot be invoked as a justification for 
this infringement under Article XIV(c). 
3.288  The second Article XIV type defence seems to be that these statutes are "necessary" for the 
enforcement of the criminal laws violated by  organized crime and are therefore covered by 
Article XIV(c).  The crimes mentioned by the Un ited States include loan sharking, prostitution, sale 
and distribution of drugs, distribution of stolen property, murder, kidnapping, arson and robbery.  
Apparently the United States believes that the pr ohibition of all cross-border gambling and betting 
services from Antigua is "necessary" to enable the United States to combat organized crime and 
prevent the commission of these crimes –  a baffling proposition which lacks all credibility.  In any 
event, in evaluating the United States' claim, the Panel must take into account, on the one hand, the 
extent to which the prohibition contributes to that end and, on the other, the extent to which the 
prohibition produces restrictive effects on international commerce.
490  In Antigua's view, this 
evaluation is very simple:  (i) the United States has submitted no evidence of organized crime involvement in Antigua's gambling industry nor has it submitted any evidence that Antigua would not 
cooperate with criminal investigations and prosecuti ons by the United States;  (ii) the effect of the 
United States' measures is the most restrictive possibl e: total prohibition.  Con sequently, this aspect of 
the defense fails.  Antigua points out a 1989 decision of the United States Supreme Court
491, where 
the Supreme Court had to balance the desire of th e State of California to prohibit certain forms of 
gambling on Native American reservations against the  Native American and federal interest of 
promoting tribal economic development.  As th e United States does here, in that case California 
submitted that its gambling restrictions were necess ary to prevent the infiltration of Native American 
tribes by organized crime.  The Supreme Court rejected this argument because the fears expressed by California were, as is true here, but a vague allegation. 
3.289  Antigua notes that the United States' third Ar ticle XIV defence is that the three federal 
statutes are "necessary to protect public morals or  to maintain public order" as provided in 
Article XIV(a).  The footnote to Article XIV(a) cl arifies that this exception needs to be interpreted 
narrowly:  "[T]he public order exception may be  invoked only where a genuine and sufficiently 
serious threat is posed to one of the fundamental interests of society.  In Korea – Various Measures on 
Beef the Appellate body also found that when evaluating whether a measure is "necessary": 
"[A] treaty interpreter (...) may (...) take  into account the relative importance of the 
common interests or values that the law or regulation to be enforced is intended to 
protect. The more vital those common interests or values are, the easier it would be to 
accept as 'necessary' a measure designe d as an enforcement instrument."
492 
3.290  Antigua notes that the United States wisely does not argue that gambling and betting is, as 
such, contrary to public morals and public order.  In  view of the wide availability of gambling in the 
United States and the active involvement in the promotion of gambling of both the state and the 
federal governments, such a claim would have no cr edibility at all.  The United States does, however, 
argue that public order and public morals are e ndangered because of the alleged organized crime 
threat (which Antigua has already dealt with) and because "[..] remote supply greatly expands 
gambling opportunities into settings – such as homes  and schools – where it has not traditionally been 
present and is not subject to the controls present in  other settings."  Howeve r, this would only be 
problematic for children because the United States con cedes that "adults can be expected to exercise 
their own moral judgment."  Antigua has already expl ained to the Panel that age verification and other 
technologies exist (and many are being used) to  reduce the chances of minors gambling on the 
                                                      
490 Appellate Body Report on Korea – Various Measures on Beef , paras. 162-164. 
491 California v. Cabazon Band of Mission Indians , 480 U.S. 202 (1987). 
492 Appellate Body on Korea – Various Measures on Beef , para. 162.  WT/DS285/R 
 Page 113 
 
 
Internet with Antiguan operators.  While the United States has made plenty of "mere assertions," it 
has not provided any evidence to the contrary  with respect to Antigua's industry.   
3.291  Antigua submits that, even if the United States could establish that current age verification 
systems are not effective, other methods of prev enting under age gambling are conceivable that would 
be less restrictive on international trade than a tota l prohibition.  For instance, the United States could 
cooperate with Antiguan operators in verification of social security numbers or other government 
means of identification.  Or, gambling and betti ng accounts with Antiguan ope rators could be opened 
in person at news agents or other specifically designated shops.  In such circumstances the age 
verification system would be exactly the same as  that used by lotteries in the United States. 
Consequently, the United States' total ban on cr oss-border supply from Antigua cannot possibly be 
said to be "necessary" because its "remote" character would not allow age verification.  Antigua 
recalls it has shown that the United States tolera tes a substantial amount of under age gambling and 
that state lotteries aggressively target the youth market. One must therefore conclude that youth 
gambling and the strict enforcement of its laws  on under age gambling is of only limited importance 
to the United States.   
3.292  Antigua submits that, even were the United States to make out a provisional defence under 
Article XIV, it is required to demonstrate that the three federal statutes in question meet the additional 
requirements of the "chapeau" of Article XIV.  This is clearly not the case.  First, the United States discriminates against Antiguan ser vices because they cannot be supplied through distribution methods 
that are available for the distribution of domestic  services.  This is an obvious "unjustifiable 
discrimination".  Second, even when comparing th e treatment of purely Internet and telephone based 
Antiguan services with that of services that the Un ited States describes as "non-remote," the United 
States' total prohibition does not meet the requireme nts of the chapeau.  As effected by the three 
federal statutes explored by the United States, the total prohibition is a "rigid and unbending"
493 
measure.  While the United States refuses to consid er cooperation with Antigua  regarding its alleged 
objectives of age verification and fighting organized crime, such internati onal cooperation would not 
only be a less "rigid and unbending" and trade restrictive policy, but it would also be a much more 
effective tool for the United States to achieve its stated objectives.  The United States dismisses, out 
of hand, the suggestion of cooperati on with Antigua, despite the fact that it follows from the Appellate 
Body report in US – Shrimp that under the chapeau, a total prohibition cannot be justified by a 
Member that refuses to pursue international cooperation.   In this context, the Panel should refer to an 
interview494, where the president of the International A ssociation of Gaming Attorneys explains how 
the expansion of United States gaming companies into the United Kingdom benefits from cooperation 
between the regulators of the two countries.  Thus, international regulatory cooperation in the gaming 
sector is possible and is already taking place – albeit to the exclusive advantage of companies from the United States. 
3.293  As a final point on the chapeau, Antigua refers th e Panel to two letters of the president of an 
association of the state lotteries in the United St ates (the "NASPL"), one of which specifically 
concerns this dispute.
495  In both letters it is repeated verbatim that the NASPL "does not take a 
position on Internet gambling, per se" but that it is the position of the NASPL "that each individual 
state should be permitted to legislate and regulate the forms of gaming conducted within its borders, 
as well as the methods by which gaming  is offered to the citizens of the state."  This means in practice 
that state governments determine "the various industries' potential profits and losses" and in  that 
process "rivalry and competition for investme nt and revenues" is the main motivation.496  The two 
letters from the NASPL clearly indicate what the states' real  concern is with Internet gambling – not 
                                                      
493 Appellate Body Report on US – Shrimp , para. 177. 
494 "Talking Points:  Legal Eagle", International Gaming & Wagering Business  (January 2004), p. 10. 
495 "Aubin, Lemons and Musgrave:  Running Racinos and Raking in Revenue", Public Gaming 
International , (May 2003). 
496 See above para. 3.107. WT/DS285/R 
Page 114  
 
that it is inherently more dangerous than other fo rms of gambling but simply that it will undermine the 
states' ability to determine the conditions of co mpetition in the gambling sector in view of the 
economic benefits accruing to the state and its local operators.  Thus, this is further evidence that the 
United States' total ban on Intern et gambling services from Antigua is  "a disguised restriction on trade 
in services." 
3.294  The United States  maintains its view that the Panel need not reach the issue.
497  The United 
States would also like to invite the Panel to reflect  on the Article XIV implications of some of its 
earlier discussion – including the discussion of Mr. Scott, money laundering and other dangers, and 
the statistics on federal prosecuti ons in gambling cases.  These obser vations further support the law 
enforcement arguments and the public order and pu blic morals arguments discussed above by the 
United States.  Moreover, the Canadian television program498 provided on videotape to the Panel also 
includes, among other things, an on-camera intervie w with a Canadian police official commenting – 
before September 11, 2001 – on the concern that  money from Internet gambling could flow to 
"organized terrorist groups."  He calls it a "very real scenario that could be occurring now and that 
could certainly develop in the future."  Cl early these are matters to be taken seriously. 
3.295  In response to Antigua's statements about in ternational cooperation, the United States would 
welcome Antigua's continued assistance in the inv estigation and prosecution of money launderers and 
others who violate US law.  In particular, th e United States would note the assistance provided by 
Antiguan law enforcement in turning over reco rds of EuroFed Bank, which Pavel Ivanovich 
Lazarenko and others used to launder funds.  While it is not true that the United States has "refused" 
to pursue international requests for assistance as suggest ed by Antigua, there is  a basis for a reluctance 
to do so if the case involves Internet gamblers.  For example, Antigua publicly took a position 
contrary to the United States in the prosecution of Jay Cohen by filing an amicus brief in support of 
Mr. Cohen in the US Supreme Court.  In addition, in its licensing of William Scott, a convicted felon, 
the fact that procedures apparently were not fo llowed is troubling.  These matters suggest that 
requests for assistance would not be fruitful if the inv estigation involves or is related to an Internet 
gambler.  Finally, the Cabazon  case cited by Antigua affords no support for Antigua's attempts to 
downplay the threat of organized crime.  That case rests on the principle that "Indian tribes retain 
attributes of sovereignty over both their members a nd their territory and that tribal authority is 
dependent on, and subordinate to only the Federal G overnment, not the States."  It was in that narrow 
context of limited state power that the Court held th at the State of California's interest in keeping 
charitable bingo games from being infiltrated by or ganized crime was not sufficient to override the 
Federal and tribal interests in promoting self-suffici ency by the tribe.  The court did not in any way 
conclude that organized crime is not a serious probl em in relation to gambling – and certainly not in 
relation to forms of gambling more serious than ch aritable bingo.  On the contrary, the United States 
already cited Supreme Court precedent confirming the dangers of organized crime in relation to 
gambling. 
IV. ARGUMENTS OF TH E THIRD PARTIES499 
A. CANADA  
4.1 Canada submits its views on the interpretation of a Member's Schedule under the GATS – in 
this case the United States – but does not reach any conclusions on whether or not the United States is 
in breach of one of its obligations under the GA TS.  Canada submits that the W/120 Classification 
List and the corresponding CPC numbers are, pursuant to Articles 31 and 32 of the Vienna 
Convention, relevant sources for the purpose of interpreting the specific commitments in the US 
                                                      
497 See the United States' reply to Panel question No. 44. 
498 Canadian Broadcasting Corporation, "The Big Gamble", broadcast on The Fifth Estate 
(31 October 2001). 
499 See also the replies of the third parties to questions from the Panel in Annex C of this Report.  WT/DS285/R 
 Page 115 
 
 
Schedule.  When the specific commitments of the Un ited States at issue in this case are interpreted in 
the light of the W/120 Classification List and the CPC numbers referred to in  it, the only reasonable 
conclusion is that the United States has taken "f ull" modes 1 and 2 market access and national 
treatment commitments with respect to gambling and betting services.   
4.2 Pursuant to Article XX:3 of the GATS, the Sche dule of a Member forms an integral part of 
the GATS.  The rules of interpretation that apply with respect to a GATS Schedule thus are the same 
as those applicable with respect to the rest of th e Agreement.  This means that the Schedule of a 
Member, and the specific commitments contained th erein, must be interpreted in accordance with 
Articles 31 and 32 of the Vienna Convention.  Alth ough this position has not been specifically stated 
in the context of the GATS, it is supported by find ings of the Appellate Body in the context of the 
GATT 1994.  In EC – Computer Equipment , the Appellate Body stated that: 
"A Schedule is […] an integral part of the GATT 1994 […].  Therefore, the concessions 
provided for in that Schedule are part of the term s of the treaty.  As such, the only rules which 
may be applied in interpreting the meaning of  a concession are the general rules of treaty 
interpretation set out in the Vienna Convention."500 
 
4.3 This position was later affirmed by the Appellate Body in EC – Poultry , Canada – Dairy  and 
Korea – Various Measures on Beef .501  While there are differences between tariffs and specific 
commitments, the Appellate Body's reasoning is equa lly applicable with respect to the interpretation 
of a GATS Schedule.    This also accords with Ar ticle 3:2 of the DSU and the Appellate Body's view 
that "the rules of treaty interpretation in Artic les 31 and 32 of the Vienna Convention apply to any 
treaty, in any field of public international law."502  The specific commitments of a Member – in this 
case the United States – must therefore be interpre ted in good faith in accordance with the ordinary 
meaning to be given to the terms of the Schedule in  their context and in the light of the object and 
purpose of the GATS (and the WTO Agreement more generally).503  To the extent appropriate, 
recourse may also be had to supplementary means of interpretation.504 
4.4 The United States clearly used and followed the structure of the W/120 Classification List to 
schedule its specific commitments.  However, its Sc hedule does not include explicit references to the 
CPC numbers that, in the W/120 Classification List, are associated with a particular services sector or sub-sector. This does not mean, as the United States s uggests, that the CPC numb ers associated with a 
particular services sector or sub-sector in the W/120 Classification List are irrelevant, inapplicable or 
to be ignored when interpreting the United States' specific commitments.  Rather, they form part of 
the context that, pursuant to Article 31 of the Vie nna Convention, must be taken into account by the 
interpreter of these specific commitments. 
4.5 In US – Section 110(5) Copyright Act , the following remarks were made concerning the 
requirements for an "agreement" or "instrument" to  exist within the meaning of Article 31:2 of the 
Vienna Convention:   
"The International Law Commission explains in its commentary on the final set of 
draft articles on the law of treaties that this provision is based on the principle that a 
unilateral document cannot be regarded as fo rming part of the context unless not only 
was it made in connection with the conclusion of the treaty, but its relation to the 
                                                      
500 Appellate Body Report on  EC – Computer Equipment , para. 84. 
501 Appellate Body Report on  EC – Poultry, para. 82;  Appellate Body Report on  Canada – Dairy , 
paras. 131-133;  Appellate Body Report on  Korea – Various Measures on Beef , paras. 96-97. 
502 Appellate Body Report on  US – Hot-Rolled Steel , para. 60.  With respect to Article 3:2 of the DSU, 
see Appellate Body Report on  US – Gasoline , p. 17. 
503 Vienna Convention, Article 31. 
504 Ibid., Article 32. WT/DS285/R 
Page 116  
 
treaty was accepted by the other parties.  'On the other hand, the fact that these two classes of documents are recognized in para graph 2 as forming part of the 'context' 
does not mean that they are necessarily to be considered as an integral part of the 
treaty.  Whether they are an actual part of the treaty depends on the intention of the parties in each case.'  It is essential that the agreement or instrument should be 
related to the treaty.  It must be concerne d with the substance of the treaty and clarify 
certain concepts in the treaty or limit its field of application.  It must equally be 
drawn up on the occasion of the conclusion of the treaty.  Any agreement or instrument fulfilling these criteria will form part of the "context" of the treaty and will thus not be treated as part of the prepar atory works but rather as an element in the 
general rule of interpretation ."
505 
4.6 The W/120 Classification List (and by implication the CPC numbers referred to in it) meets 
these criteria and at least qualifies as an "instrumen t" within the meaning of Article 31:2 of the 
Vienna Convention.   The W/120 Classification List was prepared by the then GATT Secretariat at the request of Uruguay Round participants.  In particul ar, the Montreal Ministerial Declaration called for 
the preparation of such a list by the Secretariat.
506  The revised version of the W/120 Classification 
List, dated 10 July 1991, which is the version that  was (and still is) used by Members, was based on 
comments from Uruguay Round participants.507  The 1993 Scheduling Guidelines, also prepared by 
the then GATT Secretariat at the request of Urugua y Round participants, called for the general use of 
the W/120 Classification List in order to achieve  the greatest possible degree of clarity in the 
description of each sector or sub-sector scheduled.508   
4.7 While there is no question that the 1993 Sche duling Guidelines are not an authoritative legal 
interpretation of the GATS – they specifically state that  they are not – there is also no question that, in 
                                                      
505 Panel Report on US – Section 110(5) Copyright Act , para. 6.45 (quotation marks in text; emphasis 
added; notes omitted).   
506 MTN.TCN/7 (MIN), 9 December 1988, Part II, para. 10.  See also Note by the Secretariat,  
Reference List of Sectors , MTN.GNS/W/50, 13 April 1989.  According to Canada, the fact that the Uruguay 
Round participants acted through the GATT Secretariat for the preparation of the W/120 Classification List – 
this was arguably the practical and effective way to wo rk in a concerted manner on such a matter – obviously 
does not mean that the W/120 Classification List should not be considered to have been "made by the parties" 
within the meaning of Article 31:2 of the Vienna Convention. 
507 See cover-note by the Secretariat on the W/120 Classification List. 
508 1993 Scheduling Guidelines, para. 16 in particular: 
The legal nature of a schedule as well as the ne ed to evaluate commitmen ts, require the greatest 
possible degree of clarity in the description of each sector or sub-sector scheduled.  In general the classification of sectors and sub-sectors should be based on the Secret ariat's revised Services Sect oral Classification List.  
Each sector contained in the Secretariat list is  identified by the corresponding Central Product 
Classification (CPC) number.  Where it is necessary to refi ne further a sectoral classification,  this should be 
done on the basis of the CPC or other internationally recognised classification (e.g. Financial Services Annex).  
The most recent breakdown of the CPC, including explanatory notes for each sub-sector, is contained in the UN  
Provisional Central Product Classification. 
 
Example: A Member wishes to indicate an o ffer or commitment in  the sub-sector of 
map-making services. In the Secretaria t list, this service would fall under the general heading "Other Business 
Services" under "Related scientific and technical consu lting services" (see item l.F.m).  By consulting the CPC, 
map-making can be found under the corresponding CPC classification number 86754.  In its offer/schedule, the 
Member would then enter the sub-sector  under the "Other Business Services" section of its schedule as follows:  
 
   Map-making services (86754) 
 If a Member wishes to use its own sub-sectoral classification or definitions it should provide 
concordance with the CPC in the manner indicated in the above example.  If this is not possible, it should give a 
sufficiently detailed definition to avoid any ambiguity as to the scope of the commitment.  WT/DS285/R 
 Page 117 
 
 
accordance with their stated purpose,  they assisted all Members in the preparation of their Schedules 
and the listing of their specific commitments.509  For instance, the GATS did not prescribe any 
particular format for the Schedules of Members, apar t from what is specified in Article XX.  The 1993 
Scheduling Guidelines  provided a standard format for the Sc hedules of Members, which was used and 
followed by Members in implementing their Article XX obligations.  Following numerous 
consultations, a revised version of the 1993 Scheduling Guidelines was adopted by the Council for 
Trade in Services on 23 March 2001, for the purpose of the current round of negotiations.  The 
revised 2001 Scheduling Guidelines have retained, unchanged, the statement quoted above contained 
in the 1993 Scheduling Guidelines510.  The foregoing suggests that there is agreement among 
Members that, in general, the classification of sect ors and sub-sectors in a Schedule should be based 
on the W/120 Classification List and the corresponding CPC numbers referred to in it.  A Member 
can, of course, depart from the W/120 Classification List and the corresponding CPC numbers.  In such a case, however, it should provide concordance w ith the CPC or, if this is not possible, it should 
give a sufficiently detailed definition to avoid any ambiguity as to the scope of a specific commitment.  According to Canada, the DSU
511 offers further eviden ce of the acceptance by 
Members of the W/120 Classification List (and by implication the CPC numbers referred to in it) for 
the purpose of scheduling their specific commitments.  In elaborating upon how Members may suspend concessions with respect to services sectors, Article 22 relies on the W/120 Classification List to define these sectors.
512   
4.8 Canada does not challenge the fact that a Memb er may, in certain cases, have departed from 
the W/120 Classification List and the corresponding CPC numbers associated with it.  This possibility 
is specifically provided for in the 1993 Sche duling Guidelines (and the revised 2001 Scheduling 
Guidelines).  No Member was forced or obliged to schedule specific commitm ents in accordance with 
the W/120 Classification List and the corresponding CPC numbers.  As previously emphasized, however, a Member that intended to depart from the W/120 Classification List and the corresponding CPC numbers was asked to provide concordance with the CPC or, in cases where this was not 
considered possible, to give a sufficiently detailed definition to avoid any ambiguity as to the scope of 
a specific commitment.  In a number of inst ances, the United States did depart from the 
W/120 Classification List and the corresponding CP C numbers in a clear and unambiguous manner, 
that is, in the manner suggested in the 1993 Sc heduling Guidelines.  In two cases where the 
United States did not wish to include certain elements otherwise covered by the W/120 Classification List and, by implication, the corresponding CPC numbers, it specifically said 
so.
513  Similarly, in scheduling its specific commitments on environmental services, the United States, 
while using the W/120 Classification List, expressly defined the activities covered by its specific 
commitments.514  In scheduling specific commitments on hos pital and other health care facilities, the 
                                                      
509 Ibid., para. 1.  See also Panel Report on  EC – Banana III (US) , para. 7.289, where it is stated that 
"[i]n the Uruguay Round negotiations participants agreed to follow a set of guidelines for the scheduling of 
specific commitments under the GATS." 
510 See above footnote 508. 
511 The DSU is one of the Multilateral Trade Agr eements binding on all Members: WTO Agreement, 
Article II:2. 
512 DSU, Article 22:3(f)(ii).  This invalidates the Un ited States' assertion that the W/120 Classification 
List is only part of the negotiating history of the GA TS and therefore cannot constitute anything more than a 
supplementary means of interpretation under Article 32 of the Vienna Convention.  It supports the argument that 
the W/120 Classification List qualifies as an "agreemen t" within the meaning of Article 31:2(a) of the 
Vienna Convention. 
513 With respect to Computer and Related Services, th e following entry is made in the US Schedule:  
"(MTN.GNS/W/120 a) – e), except air line computer reservation systems)."  With respect to Publishing, the 
following entry is made:  "(Only part of MTN.GNS/W/12 0 category:  'r) Printing, Publishing'."  GATS/SC/90, 
pp. 61 and 73.   
514 See  US Schedule, p. 87.  The entry "Environmental Services" is followed by note 19, which 
provides that "[i]n each of the follo wing sub-sectors, United States' commi tments are limited to the following 
activities: […]"  WT/DS285/R 
Page 118  
 
United States expressly defined the scope of that sub-sector in its Schedule.
515  A contrario , where the 
United States has simply followed the W/120 Classi fication List, without any clear and explicit 
departure from it and the corresponding CPC numbers, it should be inferred that the specific commitments at issue are to be interpreted in th e light of the W/120 Classification List and the CPC 
numbers associated with it.   
4.9 The specific commitments provided for in a Member's GATS Schedule are reciprocal and 
result from a mutually-advantageous negotiati on between importing and exporting Members.
516  I n  
EC – Computer Equipment , the Appellate Body stated, in the context of Schedules of tariff 
concessions under the GATT, that tariff negotiati ons are a process of reciprocal demands and 
concessions and that, while each Schedule represents  the tariff commitments made by one Member, 
they represent a common agreement among all  Members.517  Thus, the meaning of a tariff concession 
must be determined based on the common intention of the Members.518  By analogy, when 
interpreting a specific commitment under the GATS, one must ascertain the common intention of the 
Members.  The common intention of the Members in  regard to the Schedule of the United States is 
that where it simply follows the W/120 Classificati on List, without clearly and explicitly departing 
from it and the corresponding CPC numbers, it must be inferred that the United States' specific 
commitments are to be interpreted in the light of the W/120 Classification List and the CPC numbers associated with it.  The alternative would be that  where the United States failed to include in its 
Schedule an explicit reference to the CPC number  for a services sector or sub-sector listed in 
accordance with the W/120 Classification List, then  the CPC number should be ignored for the 
purpose of interpreting the corresponding commitment.  The effect of this would be to make those 
specific commitments largely dependant on the s ubjective and unilateral interpretation of the 
United States.  This cannot be the common intention of the Members. 
4.10 Canada submits that in EC – Computer Equipment  the Panel, when interpreting the European 
Communities' Schedule under the GATT, did not consider the Harmonized System  and its 
Explanatory Notes .  The Appellate Body reacted as follows: 
"We are puzzled by the fact that the Panel, in its effort to interpret the terms of 
Schedule LXXX, did not consider the Harmonized System  and its Explanatory Notes .  
We note that during the Uruguay Round negotiations, both the European Communities and the United States were parties to the Harmonized System .  
Furthermore, it appears to be undisputed that the Uruguay Round tariff negotiations 
were held on the basis of the Harmonized System's  nomenclature and that requests 
for, and offers of, concessi ons were normally made in terms of this nomenclature. 
[…] We believe, however, that a proper  interpretation of Schedule LXXX should 
have included an examination of the Harmonized System  and its Explanatory 
Notes ."
519 
4.11 By analogy, one would be puzzled if, as suggest ed by the United States recourse were not had 
to the W/120 Classification List and the correspondi ng CPC numbers intrinsically linked with it 
where the Schedule of a Member follows the W/120 Cl assification List.  This would be all the more 
surprising considering that the USITC has itsel f recognized the close correspondence between the 
United States' specific commitments, the W/120 Classification List and the CPC numbers referred to 
                                                      
515 US Schedule, p. 117.  The entry "Hospital and Other Health Care Facilities" is followed by the 
following definition:  "Direct ownership and management  and operation by contract of such facilities on a 'for 
fee' basis"  
516 See Preamble of the GATS, third paragraph.  See also GATS Article XIX:1.  
517 Appellate Body Report on EC – Computer Equipment , para. 109. 
518 Ibid., paras. 84 and 109. 
519Appellate Body Report on  EC – Computer Equipment , para. 89.  WT/DS285/R 
 Page 119 
 
 
in it, stating that while "[t]he US Schedule ma kes no explicit references to CPC numbers, […] it 
corresponds closely with the GATT Secretariat's list [the W/120 Classification List]."520   
4.12 Canada is therefore of the view that the W/120 Classification List and the corresponding CPC 
numbers qualify as "context" for the purpose of in terpreting the specific commitments in the US 
Schedule.  Accordingly, in the present case, Canada  agrees with Antigua and Barbuda that the United 
States has taken "full" modes 1 and 2 market access and national treatment commitments with respect 
to gambling and betting services.  This is based on the United States' modes 1 and 2 commitments for "Other Recreational Services (except sporting)," which, according to the W/120 Classification List, 
refer to CPC number 964.
521  CPC number 964 includes CPC number 96492 – gambling and betting 
services. 
4.13 Canada argues, alternatively, that in the event that the W/120 Classification List and the 
corresponding CPC numbers do not qualify as "context " within the meaning of Article 31:2 of the 
Vienna Convention, the W/120 Classification Li st and the corresponding CPC numbers can be 
referred to as supplementary means of interpreta tion of the US Schedule under Article 32 of the 
Vienna Convention.  The W/120 Classification List  and the corresponding CPC numbers referred to 
in it are part of the historical background agains t which the GATS and the Schedules were negotiated.  
Recourse to them may thus be had in appropriate  cases, that is, in tho se instances where the US 
Schedule simply follows the W/120 Classification List , without clearly and explicitly departing from 
it and the corresponding CPC numbers.  Without such recourse to the W/120 Classification List and 
                                                      
520 See USITC Document, p. viii.  Canada notes the US argument that this document has no legal 
significance since the explicit purpose of the concordance in the document is only to "facilitate comparison of 
the US Schedule with foreign schedules". In Canada's vi ew, this statement is factually incomplete and legally 
incorrect.  The relevant part of the document reads, at p. viii: 
 
To facilitate comparison of the US Schedule w ith foreign schedules, the USITC has developed a 
concordance that demonstrates the relationships between sectors found in the US Schedule, sectors identified in 
the GATT Secretariat's Services Sectoral Classification List, and sectors defined and numbered in the United 
Nations' Provisional Central Product Classification (CPC ) System. In preparing national schedules, countries 
were requested to identify and define sectors and sub-s ectors in accordance with the GATT Secretariat's list [the 
W/120 Classification List], which lists sectors and their respective CPC numbers. Accordingly, foreign 
schedules frequently make explicit references to th e CPC numbers. The US Schedule makes no explicit 
references to CPC numbers, but it corresponds  closely with the GATT Secretariat's list.  
 
The concordance developed by the USITC clarifies how the service sectors referenced in the GATT 
Secretariat's list, the CPC system , and the US Schedule correspond . […] 
 
Canada submits that such a statement by the organization (a federal agency) that, "[a]t the request of 
the Office of the United States Trade Representative [… ] assumed responsibility for maintaining and updating, 
as necessary, the [US Schedule]" has probative value and is a factor conf irming other evidence that there is a 
close correspondence between the United States' specifi c commitments, the W/120 Classification List and the 
CPC numbers referred to in it (Ibid, p. vii).  In Chile – Alcoholic Beverages , para. 7.119, the Panel noted that 
statements by a government against WT O interests are most probative.   
521 See US Schedule, p. 123.  According to Canada , it is clear that in th e case of this specific 
commitment the United States was follo wing the classification of the W/12 0 Classification List.  Sub-sector 
10.D in the W/120 Classification List is entitled "Sportin g and other recreational services."  The United States' 
entry for sub-sector 10.D re ads "Other Recreational Services (except spor ting)."  The logical conclusion is that 
recreational services, except sporting, within the meaning of sub-sector 10.D of the W/120 Classification List 
has been included in the US Schedule.  The United States' almost exclusive reliance on definitions of dictionaries to interpret this specific commitment, in pa rticular the terms "except sporting", is in effect an 
attempt to have the Panel read the specific commitment out of its context, contrary to what is mandated by 
Article 3:2 of the DSU and the rules of interpretation of the Vienna Convention.  In this regard, it is worth recalling the Appellate Body's observation that dictionaries are not dispositive statements of definitions of words 
appearing in agreements and legal documents.  Appellate Body Report on  United States – Offset Act (Byrd 
Amendment),  para. 248. WT/DS285/R 
Page 120  
 
the corresponding CPC numbers, the meaning of th e United States' specif ic commitments would 
remain ambiguous and obscure.  This is demonstrated by the inability of the United States to clearly 
identify, absent recourse to the W/120 Classificati on List, where in its Schedule gambling and betting 
services have been included or excluded. 
4.14 Canada asks the Panel to find that the W/120 Classification List, including the CPC numbers 
referred therein, is a relevant source for the purpos e of interpreting the specific commitments in the 
US Schedule.  This conclusion is legally justified under Article 31 or , alternatively, Article 32 of the 
Vienna Convention.  It is also supported by  the findings of the Appellate Body in EC – Computer 
Equipment .   
B. E
UROPEAN COMMUNITIES  
4.15 The European Communities notes that a stat ement such as the one made by a US 
representative and reported in the minutes of the Dispute Settlement Body in connection with this 
dispute522, while not relieving Antigua and Barbuda of its burden of proof, is pertinent to this 
question.  Statements of Members' representatives  interpreting their own domestic law have been 
accepted as having probative value in previous panel proceedings.523  However, the European 
Communities indicates that its comments are based on the assumption arguendo  that a prohibition on 
the "supply of gambling and betting services from outside the United States to consumers in the United States"
524 exists in the US legal system.   
4.16 The European Communities argues that such a prohibition is within the scope of GATS.  
Article I:1 of the GATS defines the scope of the agreement as covering "measures by Members affecting trade in services".  A prohibition of cross-border supply of gambling and betting services 
contained in legislative or administrative measu res is no doubt a "measure by a Member" because it 
results from an action of public authorities of a Member.
525  The term "affecting" is not defined in the 
GATS.  Previous reports have made clear that the term "affecting", in its ordinary meaning, context 
and in the light of the object and purpose of the GATS, suggests a broad meaning, notably of "having an effect on".
526  A prohibition of cross-border supply of gambling and betting services affects trade in 
services under Article I:1, the GATS because it impa cts on the conditions of competition between the 
suppliers established in the Member maintaining it and those providing such services cross-border.  
All other conditions being equal, such prohibition provides an incentive to consumers to turn to 
service suppliers within the US territory over lik e services supplied from the territory of other 
Members, thereby modifying the conditions of comp etition.  The incentive is obviously a particularly 
powerful one, since consumers who continue to ga mble through websites operated e.g. from Antigua 
and Barbuda are doing so in breach of the law.  The services at issue – namely gambling and betting 
services – are not excluded from the GATS by Article I: 1 (or I:3) and their trade is thus covered by 
the Agreement.  Similarly, the term "supply of a service" has also broad coverage.  According to 
GATS Article XXVIII(b) it includes "the production, di stribution, marketing, sale and delivery of a 
service."527 
                                                      
522 See WT/DSB/M/151, page 11.  
523 Panel Report on US – Section 301 Trade Act, paras. 7.115, 7.121 and  7.125. 
524 WT/DS285/2, para. 2.   
525 Pursuant to Article I:3(a) of the GATS, "in fulfilling its obligations and commitments under the 
Agreement, each Member shall take su ch  reasonable measures as may be  available to it to ensure their 
observance by regional and local governments and authorities and non-governmental bodies within its territory". 
526 Appellate Body Report on EC – Banana III , para. 220. 
527 See also Panel Report on EC – Bananas III (US),  para. 7.281, where the Panel recognized that the 
"the drafters consciously adopted the terms 'affecting' and 'supply of a service' to ensure that the disciplines of 
the GATS would cover any measure bearing upon conditions of competition in supply of a service, regardless of 
whether the measure directly governs or indi rectly affects the supply of the service."  WT/DS285/R 
 Page 121 
 
 
4.17 In the view of the European Communities, the US Schedule, interpreted in accordance with 
customary rules of interpretation of public intern ational law codified in the Vienna Convention, 
includes commitments on gambling and betting services.  Although GATS Schedules of specific commitments have been reviewed in previous reports
528, panels and the Appella te Body have not as 
yet specifically addressed the criteria for their in terpretation.  Nonetheless, the interpretation of 
Schedules annexed to the GATT 1994 a nd the GPA by the Appellate Body529 and WTO panels530 
undoubtedly provides relevant guidance, particularly  so because the text of Article II:7 of the GATT 
1994 and Article XX:3 of the GATS set out the le gal status of Members' Schedules of tariff 
concessions/ specific commitments in  largely identical terms.  The EC – Computer Equipment 
Appellate Body report provides the general st andard for interpretation of WTO Schedules.531   In that 
report the Appellate Body  examined the legal nature of a Member 's tariff Schedule in order to address 
the question as to whether and how the general rul es of treaty interpretation as set out Articles 31 and 
32 of the Vienna Convention  are applicable in the interpretation of the former .  In that respect it held: 
"A Schedule is made an integral part of  the GATT 1994 by Article II:7 of the GATT 
1994. Therefore, the concessions provided for in that Schedule are part of the terms 
of the treaty. As such, the only rules wh ich may be applied in interpreting the 
meaning of a concession are the general rules of treaty interpretation set out in the 
Vienna Convention."532 
4.18 Like Article II:7 of the GATT 1994, which refe rs to the Schedules of concessions as an 
"integral part of the Agreement", Article XX:3 of the GATS provides that "Schedules of specific 
commitments shall be annexed to this Agreement a nd shall form an integral part thereof".  This 
confirms that GATS Schedules must also be treate d as treaty language and acco rdingly be interpreted 
pursuant to the customary rules of treaty interpretati on.  This applies to all commitments contained in 
all Members' Schedules, and the distinction dr awn by the United States, i.e. between "CPC 
commitments," which include textual referenc es to numerical CPC codes, and "non-CPC 
commitments," the text of which make no refere nce to the CPC, is uns upported inasmuch as it 
suggests different interpretative approaches for co mmitments which are all integral part of an 
international agreement.   
4.19 The European Communities argu es that in the Uruguay Round negotiations, participants 
agreed on the 1993 Scheduling Guidelines for the scheduling of specific commitments under the 
GATS533 according to which the classification of se ctors should be based on the W/120, also 
developed during the Uruguay Round.  In turn, each sector listed in the 1991 Sectoral classification is 
identified by the corresponding CPC number.  According to the 1993 Scheduling Guidelines, 
Members should schedule their commi tments on the basis of the CPC or otherwise in such a way as to 
ensure precision and clarity.534 
4.20 In its GATS Schedule, the United States has clo sely followed the structure of the W/120.  It 
has in particular made a commitment for th e cross-border supply of services classified under 
sub-sector 10.D "Other recreational services (except s porting)."  Sub-sector 10.D of the 1991 Sectoral 
classification is headed "Sporting and other recreational services" and it is identified therein by the 
corresponding CPC "964" code.  The CPC 964 category, equally headed "Sporting and other 
                                                      
528 Panel Report on EC – Bananas III (US) , paras. 7.287 ff. 
529Appellate Body Report on EC – Computer Equipment ;  AB Report, Canada – Dairy ;  Appellate 
Body Report on Korea – Various Measures on Beef . 
530 Panel Report on Korea – Various Measures on Beef ;  Panel Report on Korea – Procurement. 
531 The European Communities notes that this report has been cited and the findings stated therein in 
relation to schedules' interpretation have been reaffirmed in all subsequent reports dealing with the issue. 
532 Appellate Body Report on EC – Computer Equipment , para. 84. 
533 MTN.GNS/W/164 and Add.1; Panel Report on EC – Bananas III (US),  WT/DS27/R, para. 7.289.   
534 MTN.GNS/W/164, paras. 1 and 16. WT/DS285/R 
Page 122  
 
recreational services", is further broken down into two sub-sectors, namely 9641: "Sporting services" and 9649:  "Other recreational services". Finally , the latter encompasses CPC category 96492:  
"Gambling and betting services".  The United States has also followed the structure of W/120 in drafting its commitments under sector 10 of its Sche dule, including sub-sector 10.D.  It has only 
modified the title of sub-sector 10.D, which reads "Other recreational services (excluding sporting)" 
instead of "Sporting and other recreational services"  (and has made a commitment for the cross-border 
supply of services falling within such sub-sector).  Admittedly, the United States has not inscribed in 
connection with sub-sector 10.D the equivalent CPC num ber.  However, had it wanted to depart from 
the CPC classification, it should have done so exp licitly.  Therefore, by excluding "sporting" under 
sub-sector 10.D of its Schedule, the United States has only excluded services comprised in CPC 
category 9641, that is sporting services.  To the c ontrary, by not listing any limitations on cross-border 
supply of services with respect to "other recreationa l services", the United Stat es has included in its 
commitment the entire CPC cate gory 9649, which further encompasses CPC category 96492:  
"Gambling and betting services".  In the view of th e European Communities, interpretation of a treaty 
provision under the rules codified in the Vienna C onvention starts by examining the ordinary meaning 
of a treaty provision, in its context and in the light of its object and purpose.
535   
4.21 The European Communities argues that the ordinary meaning of the US specific 
commitments relating to Sector 10 ("Recreational,  cultural and sporting services") does not warrant 
the conclusion that gambling and betting services are excluded from such commitments.  The US 
interpretation of the ordinary meaning of the defin itions for sub-sectors 10.D and 10.A is contradicted 
by the very dictionary definitions of some key te rms employed in Sector 10 of its schedule quoted by 
the United States.  First, the United States makes much of a reference to gambling and betting in 
connection with the term "sporting" in the New Shorter Oxford English Dictionary .  The European 
Communities notes that the one quoted by the United States is certainly not a commonly used meaning of the term.  What is more, under the very definition in the New Shorter Oxford English 
Dictionary  on which the United States relies, only when it is referred to a person is the term 
"sporting" taken to refer, inter alia , to gambling.  The full quote from the New Shorter Oxford English 
Dictionary  is as follows:  
Sporting, adj. 
 1 a Sportive; playful. rare.  
  b Engaged in sport or play.    c Of a plant etc.: tending to produce abnormal varieties or sports 
 2 a Interested in or concerned in sport  
b Designating an inferior sportsman or a person interested in sport from purely 
mercenary motives. Now esp. pertaining to or interested in betting or 
gambling. Chiefly in sporting man . 
  c  sporting girl, woman , a prostitute, a promiscuous woman.
536 
 
Thus, under the definition that the United States quotes, a sporting man may be a person interested in 
betting or gambling (he can also be merely interested  in sport, under definition 2.a).  This, however, 
does not prove that sporting services  pertain to or include gambling.  Likewise, a sporting woman 
may be a prostitute, but this presumably does not m ean that sporting services pertain to or include 
prostitution.  An adjective, such as "sporting" qualifies another term (typically a noun) and its 
meaning in a given case depends on th e term it is meant to qualify. 
 4.22 The European Communities further submits that  the United States also refers to another 
dictionary definition under which the adjective "s porting" is somehow related to gambling.  The 
                                                      
535 Vienna Convention, Article 31:1. 
536 New Shorter Oxford English Dictionary (emphasis added), New York, Oxford University Press, 
1993.  WT/DS285/R 
 Page 123 
 
 
European Communities is not in a position to verify the source quoted by the United States.537  I t  
notes nonetheless that another US dictionary, the Webster's New World Dictionary of American 
English , reads: 
Sporting, adj.  
 1  of, having to do with, or for sports, or athletic games, etc.  
 2  interested in or taking part in sports, or athletic games, etc.  
 3  sportsmanlike; fair  
           ☼4  interested in or having to do with games,  races, etc. characterized by gambling or 
betting  
 5  Biol. inclined to mutate –  
☼ Americanism 538  
 
4.23 The meaning relating to gambling, besides defi nitely not being a common one, is qualified by 
the dictionary itself as an "Americanism".  Th e European Communities therefore doubts that the 
meaning to which the United States points can be rea lly considered the "ordinary meaning" within the 
meaning of the Vienna Convention  on the Law of Treaties .539  Also, if applied to services, the above 
definition would mean "having to do with games, ra ces, etc. characterized by gambling or betting".  
This does not entail that "sporting services " include  gambling and betting services.  Accordingly, the 
ordinary meaning of the heading for sub-sector 10.D – "Other recreational services (except sporting)" in the US Schedule does not exclude that gambling and betting services fall under that sub-sector. 
4.24 The European Communities notes that the Unite d States further refers to dictionary 
definitions of the terms "entertainment" and "rec reational" and, after allegedly establishing the 
ordinary meaning of the term "sporting", the Unite d States hastens to infer that "[b]ased on the 
ordinary meaning of the words "recreational", "e ntertainment" and "sporting" it is impossible to 
conclude that gambling and betting service must be  considered to fall within sub-sector 10.A."
540  
4.25 The European Communities submits that, ev en taking the definition of the term 
"entertainment" provided by the United States, it is hard to deny that gambling and betting is e.g. "[a] thing which entertains or amuses someone."  Likewi se, taking the definition of the term "recreational" 
referred to by the United States, it is hard to deny that gambling and betting is "used for or as a form 
of recreation".  The United States, has certainly no t demonstrated the contrary by merely quoting 
these definitions and making the conclusory assertion th at a different interpretation is "impossible".  
Furthermore, sub-sector 10.A in the US Schedule clearly designs a rather broad category - the 
reference to theatre, live bands and circus services is  merely illustrative of what is  encompassed by 
the term "entertainment services".  Accordingly, th e term "entertainment", used to define sub-sector 
10.A of the US schedule, may well also cover gambling and betting services, just as the term "recreational", used to define sub-sect or 10.D, may also cover such services.
541  This further confirms 
that, based on the ordinary meaning of the defin itions used in sector 10, gambling and betting services 
are not excluded from the US schedule. 
                                                      
537 That is, the Merriam-Webster's Collegiate Dictionary,  10th ed., 2001. 
538 Webster's New World Dictionary of American English , V. Neufeldt and D. B. Guralnik eds., New 
York, Simon & Schuster, 1993, 3rd college ed., p. 1297. 
539 The European Communities notes that, to the extent that the meaning referred to by the United 
States could be considered as a "sp ecial meaning", then, pursuant to Article 31:4 of the Vienna Convention, it 
shall be given to the term "sporting" only "if it is established that the parties so intended" (the burden of proof 
being on the party asserting that special meaning).  
540 See above para. 3.45. 
541 According to the European Communities, one reason why sub-sector 10.D is the proper 
classification for gambling and betting is that the United States itself has indicated that it considers CPC code 
964 to fall under sub-sector 10.D instead (see USCIT document). WT/DS285/R 
Page 124  
 
4.26 The European Communities further argues that  each of the specific commitments of a 
Member must be placed in its own - different - contex t, which is first of all the Schedule to which it 
belongs.  For the purposes of interpretation of th e US specific commitments, the US Schedule and its 
structure, not the commitments taken by other Me mbers, are the most relevant context.  The 
United States tries to support its conclusion that  it has taken no commitments for gambling and 
betting services by referring to Schedules of other Me mbers as "context".  It is somehow surprising 
that the United States, having tried to distance itsel f from the classification and scheduling approach 
of most other Members, particularly of those which expressly followed the CPC classification, is placing so much emphasis on this different scheduling practice.  In any event, the references to other 
Members' Schedules, while not supporting th e US position, often prove the contrary.  
4.27 Having argued, on the basis of its own reading of the ordinary meaning, that it has excluded 
gambling and betting services by the way it has wr itten the heading of its sub-sector 10.D, the 
United States seems to further argue that in fact, s ub-sector 10.D is not really the appropriate heading 
for those services – witness the fact that other Me mbers have referred to them under sub-sectors 10.A 
or 10.E of their respective Schedules.  One common feature of the schedules of other WTO Members 
referred to by the United States in connection with this point is that, unlike the US one, all expressly 
refer to gambling and betting services (and, for th ose schedules referring to the CPC codes, any 
departure from such codes appears to be expressly pr ovided for).  This in turn means that one cannot, 
in the absence of such express refe rences in  the US Schedule, automatically infer that gambling and 
betting services also do not fall under sub-sector 10. D of such Schedule.  Moreover, each of the 
commitments in other Members' Schedules has to be placed in its own – different – immediate 
context, which is the Schedule to which each belongs. 
4.28 Thus, it is true, for example, that one WT O Member, Senegal, has inscribed gambling 
services under a residual sub-sector 10.E headed "other ", instead of 10.D, and this notwithstanding a 
reference to CPC in that Schedule.  However, looki ng at Senegal's Schedule, it  is clear that Senegal 
has used sub-sector 10.D not to cover the entire CP C category 964 (which also encompasses gambling 
and betting).  To the contrary, Senegal only classi fied under 10.D a very limited selection of CPC 964, 
that is "Recreational fishing".  By contrast, a simila r clear limitation of the scope of sub-sector 10.D is 
lacking in the US Schedule.  Having limited sub- sector 10.D to a very specific part of CPC 964, 
Senegal logically had to classify gambling services elsewhere in its Schedule - which it did in sub-sector 10.E.  It is to be noted that in Senega l's Schedule there is no reference to any CPC code in 
connection with sub-sector 10.E.  This brings to wh at appears to be the second contextual argument of 
the United States, which is based on the fact that  two WTO Members included in their Schedules an 
additional residual category 10.E.  The United States points out that, unlike those two Schedules, its own does not include such a residual category.  It is not clear to the European Communities how this 
confirms that the claim of Antigua and Barbuda is unfounded.  If the United States means to say that, 
in order to include gambling and betting services, it  would have needed this extra category in its 
Schedule, this is wrong for a number of reasons.  First, the United States is in numerous company, 
given that only two Members have added a residual sub-sector 10.E in their schedule.  Nonetheless, 
other WTO Members arguably do not contest to have undertaken commitments in relation to 
gambling and betting services even without such residual sub-sector.  As for Iceland, it is true that a sub-sector 10.E has been added to a schedule that ot herwise corresponds in full to the CPC.  However, 
this is done in accordance with the 1991 Sectoral classification (W/120), which relates CPC 964 code 
(also encompassing gambling and betting) to sub-sector  10.D.  Furthermore, this does not mean that 
gambling and betting services fall under sub-sector 10.E in  Iceland's Schedule.  Quite to the contrary, 
having equated sub-sector 10.D to CPC 964, Icel and correctly included gambling under that 
sub-sector in its Schedule.  Therefore, Iceland's Schedule does not prove that an extra sub-sector is 
needed in order to have commitments on gambling and betting services.  The very fact that only two 
other Members needed an extra category (10.E), and only one of them to classify gambling, does not 
take away that many other Members did not need  it and yet committed or limited their commitments 
on gambling.  Thus, the presence of a category 10.E is not indispensable to take full or limited 
commitments on gambling and betting, contrary to what  the US seem to suggest.  In addition, the US  WT/DS285/R 
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schedule already contains a residual category for "o ther recreational services" – 10.D precisely.  There 
is therefore no need for another "Other" category in that Schedule. 
4.29 It is also curious that the United States, having asserted that a limitation on gambling and 
betting have been inscribed in its Schedule by writing a limitation on sporting services in sub-sector 
10.D, at the same time maintains that commitmen ts for the same service category should have been 
written under a different (and residual) sub-sector of  Sector 10 (that is under sub-sector 10.E:  
"Other").  Furthermore, the US Schedule already includes a residual sub-sector – 10.D precisely. It is thus not clear why an additional residual category wo uld be needed.  Also, the fact that another WTO 
Member – Lithuania – mentions gambling and betting services under both sub-sector 10.A and 10.D 
does not mean that such services are irrelevant under (or excluded from) the latter.  In addition, if it 
were necessary to also inscribe limitations under 10.A, the United States should have done it too, but 
it did not do so.  Furthermore, the fact that some WTO Members – Egypt, Indonesia, Jordan and Peru – have mentioned gambling under the "Tourism" Sect or of their Schedules also does not prove that 
the United States has no commitments for gambling a nd betting under Sector 10.D.  Those mentions 
do not concern gambling and betting services per se , but only specific instances of provision of such 
services which are directly connected with tourism se rvices.  To the extent that commitments in the 
"Tourism" Sector also cover certain gambling and betting services, the United States should have also 
inscribed limitations for those services in Sector 9 of its Schedule, but it did not.   
4.30 The European Communities fu rther argues that the 1993 Scheduling Guidelines and the 
W/120 are also pertinent to the interpretation of  the WTO Schedules of specific commitments in 
accordance with customary rules.  Th is also applies to the US Sche dules.  Those two documents have 
been developed and used as reference during th e Uruguay Round negotiations , and thus constitute 
preparatory works and circumstances of the conclu sion of the GATS and the WTO Agreement, within 
the meaning of Article 32 of the Vienna Convention.
542  These documents confirm that the US 
Schedule does not depart from the CPC system definition as regards sub-sector 10.D ("Other 
Recreational Services").  Accordingly, by excluding sporting services from its sub-sector 10.D, the 
United States has excluded what is considered to  be sporting services under the CPC system, but not 
also gambling and betting services. 
4.31 The W/120, irrespective of whether it is a legally bi nding instrument of its own, is part of the 
preparatory works of the GATS and the WTO.  Th e fact that the United States, which closely 
followed its structure, was not bound either by it  or by the CPC system, does not mean that such 
Member did not follow the CPC system, directly or through the W/120, in a particular case.  As for 
the 1993 Scheduling Guidelines , irrespective of the legal status, their overall objective must have been 
shared by the negotiators.543  The guidelines were circulated by the GATT Secretariat in response to 
requests by participants544, who agreed on them.  Moreover, thei r objective was to "achieve precision 
and clarity", and to this effect Members not following the CPC classification should have provided unambiguous commitments otherwise.  Clarity of commitments in turn gua rantees the security and 
predictability of "the reciprocal and mutually adva ntageous arrangements directed to the substantial 
reduction of tariffs and other barriers to trade"  [which] is an object and purpose of the WTO 
Agreement, generally, as well as of the GATT 1994.
545  Thus, security and predictability, besides 
being an objective of the WTO Agreement generally, has been specifically recognized to be relevant 
in connection with GATT tariffs schedules.  But it is at least as important for the scheduling of 
commitments on services.546  It is therefore not pure coincidence that the US Schedule follows closely 
                                                      
542 Appellate Body Report on EC – Computer Equipment, para. 86. 
543 Panel Report on EC – Bananas III (US),  para. 7.289. 
544 MTN.GNS/W/164, p. 1, footnote 1.  
545 Appellate Body Report on EC – Computer Equipment , para. 82. 
546 The European Communities notes that, similarly to the GATT 1994, the GATS is also aimed at 
"promoting the interests of all participants on a mutually advantageous basis" and at "progressive liberalization" 
(Preamble, paras. 2 and 3).  WT/DS285/R 
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the 1991 Sectoral classification, mirroring what vi rtually all other WTO Members have done.  The 
references to the CPC codes in the 1993 Schedu ling Guidelines are aimed at providing such 
predictability because the CPC offers a relatively sophisticated tool for defining the sectors/ sub-
sectors for which Members undertake commitments.  This is made clear in paragraph 16 of the 
Scheduling Guidelines. 
4.32 Referring to CPC codes was not the only possible way contemplated by the 1993 Scheduling 
Guidelines  to achieve clarity.  However, where Member s intended not to follow the CPC system, they 
were requested by the Scheduling Guidelines to provi de such predictability otherwise – that is by 
clarifying and defining otherwise the content of thei r commitments:  "If a Member wishes to use its 
own sub-sectoral classification or definitions it s hould provide concordance with the CPC in the 
manner indicated in the above example.  If this is  not possible, it should give a sufficiently detailed 
definition to avoid any ambiguity as to the scope of the commitment."
547  In other words, while use of 
the CPC definitions was not mandatory, departure from those definitions was not free and unconditional.  Rather, departure was to be done so as to ensu re predictability through some 
alternative means.  Departure from the CPC system was not meant to allow convenient ambiguity in a 
Member's Schedule.  If the United States did not pr ovide concordance at the time it put forward its 
Schedule, or other sufficiently detailed definition to avoid any ambiguity, it means that it did not 
intend to depart from the CPC.   
4.33 Moreover, the United States itself recognized, in th e last draft Schedule it tabled at the end of 
the Uruguay Round negotiations in December 1993, that the scope of its sectoral commitments corresponds to the 1991 Sectoral classification.
548  Paragraph 5 of the introductory language to the US 
Draft Final Schedule mentions, in pertinent part, that  "[E]xcept where specifically noted, the scope of 
the sectoral commitments of the United States corresponds  to the sectoral coverage in the Secretariat's 
Services Sectoral Classification List (MTN.GNS/W/ 120, dated 10 July 1991)."  The US Draft Final 
Schedule includes, inter alia , sector 10, which is defined in identical terms to the sector 10 appearing 
today in document GATS/SC/90.  So is in par ticular sub-sector 10.D, equally labelled "OTHER 
RECREATIONAL SERVICES (except sporting)".  Thus , paragraph 5 of the in troductory language to 
the US final offer contains an express admission that the US Draft Final Schedule was in principle based on the 1991 Sectoral classification – and theref ore also on the CPC, to which the latter makes 
reference.  The same paragraph also states that  only when expressly mentioned does the US Draft 
Final Schedule depart from the 1991 Sectoral cla ssification.  Clearly, however, sub-sector 10.D does 
not contain any such express mention.  It is also wo rth mentioning that identical language to that of 
paragraph 5 just quoted also appears in the in troduction to the second Revised Conditional Offer 
tabled by the United States earlier during the Uruguay Round.
549 To the best of the knowledge of the 
European Communities, the US second Revised Cond itional Offer is also the one where a specific 
commitment on "Other recreational services" first appears, and again, it is defined in terms of "OTHER RECREATIONAL SERVICES (except sporti ng)".  This means that the US specific 
commitment on "other recreational services" was al ways accompanied by an indication that it was 
based on the 1991 Sectoral classification.  It also means that sub-sector 10.D was drafted on the basis 
of the 1991 Sectoral classification – whether or not it was so because the United States was bound to 
it.  And, as noted by Canada
550, there are only two instances wher e the United States made explicit 
exceptions to the 1991 Sectoral classification.  Th e United States seems to argue that other WTO 
Members should have sought clarification from the Unite d States of the scope of its commitments.  In 
fact, the language quoted from the US Draft Fi nal Schedule and second Revised Conditional Offer 
shows that it was the United States itself that provided such clarification, including in the last offer it 
                                                      
547 MTN.GNS/W/164, page 7, para. 16, in fine . 
548 Communication from the Un ited States of America,  Draft Final Schedule of the United States of 
America concerning Initial Commitments , MTN.GNS/W/112/Rev.3, 7 December 1993. 
549 Communication from the United States of America,  Revised Conditional Offer of the United States 
of America concerning initial commitments , MTN.GNS/W/112/Rev.2, 1 October 1993, p. 1. 
550 See above para. 4.8.  WT/DS285/R 
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tabled at the end of the negotiations in December 1993.  It also shows that there is no attempt to 
impose a link with the CPC definitions ex post facto , contrary to the US contention.   
4.34 The European Communities further argues th at the need for clear and predictable 
commitments also underlies the explanatory document  of the US Schedule prepared by the USITC at 
the request of the USTR.  For sub-sector 10 .D, that document expressly recognizes the 
correspondence between the US Schedule, the 1991 Sectoral classification and the relevant CPC 
codes, which include gambling and betting.  Havi ng expressly recognized in that document what can 
already be inferred from its own Schedule and from paragraph 16 of the 1993 Scheduling Guidelines 
(that is, that the US Schedule does not depart from the CPC description for sub-sector 10.D), the 
United States cannot in good faith attempt to unilate rally restrict the scope of its commitments in 
dispute settlement.  The "security a nd predictability" of "the recipr ocal and mutually advantageous 
arrangements directed to the substa ntial reduction of tariffs and other barriers to trade" pursued by the 
WTO Agreement would otherwise be compromised. 
4.35 As for GATS Article XVI, the European Communities argues that two elements must be 
reviewed under Article XVI:1, i.e. whether the US  Schedule of specific commi tments includes market 
access commitments on gambling and betting services and whether maintaining such a measure 
amounts to less favourable treatment than committed.   Moreover, under Article XVI:2, the measure in 
question must not be of any of the six types of pr ohibited measures listed therein.  Concerning the first 
point, the European Communities submits that th e US specific commitments, specifically in 
sub-sector 10.D of the US Schedule, correctly in terpreted, also cover gambling services.  Second, 
given that the United States has inscribed no limita tion in its Schedule of specific commitments for 
gambling and betting services provided under mode 1,  a prohibition on the "supply of gambling and 
betting services from outside the United States to consumers in the United States", which is a 
complete limitation on provision under that mode, would clearly entail less favourable treatment than 
provided in such Schedule.  Thirdly, a "blanket"  prohibition of cross-border gambling services means 
that no foreign gambling service can enter ("access ") the US gambling market under the so-called 
"mode 1" of service provision and that no foreign supplier can operate from outside the US territory 
on the US market.  This is tantamount to saying th at there is a quantitative restriction ("numerical 
quota") within the meaning of Article XVI:2(a) of the GATS, which quota equals zero.  The 
United States, while contesting that the measures refe rred to by Antigua and Ba rbuda in its request for 
panel establishment contain numerical quotas, does not appear to contest Antigua and Barbuda's 
statement that a complete ban would constitute a nu merical quota.  On the other hand, the fact that 
Article XVI:2(a) refers to "limitations on the numbe r of service suppliers … in the form of numerical 
quotas" does not in itself indicate that a particular number or ceiling of provi ders operations or output 
must be expressly indicated in a measure in order fo r it to be caught by such provision.  Otherwise, it 
would indeed not be difficult for Members to fash ion their measures in such a way as to escape the 
prohibition in Article XVI:2(a). 
4.36 As to GATS Article XVII, the European Commun ities argues that, to establish a violation of 
this provision, one must assess:  (i) whether the US  schedule of specific commitments includes market 
access commitments on gambling and betting services;  (ii) whether there are like services/suppliers; 
and (iii) whether maintaining such measure amount s to less favourable treat ment than granted to 
domestic services and suppliers, that is (a) wh ether the measure modifies the conditions of 
competition and (b) this is in favour of domestic services and suppliers. 
4.37 As regards the identification of like domestic service or suppliers, the European Communities 
shares the Appellate Body's view on the need for a case-by-case approach  to the issue of "likeness" in 
WTO provisions.  Furthermore, some special cauti on needs to be exercised to avoid mechanical 
transposition to services of criteria developed in connection with trade in goods.  Services are, 
generally, a different "case".  In the two cases in wh ich the term as it appears in the GATS has been 
interpreted so far, the services and suppliers at is sue were found to be "like" by focusing on the WT/DS285/R 
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similarity of the activity performed and of the r esult of such activity (that is the service itself).
551  The 
intangibility of services may make certain other si milarities extremely subjective and too uncertain 
properly to appreciate.  It is thus important to focus on the characteristics of the services at issue 
themselves and other objective elements.  The classification of services in Members' Schedules will also be a useful indicator because classification generally reflects a certain level of differentiation 
between the various activities listed.  Indeed, it is  most likely that services will not be "like" one 
another if classified in different parts of a Schedule.   
4.38 Activities which are essentially the same (e.g. the provision of wholesale trade services) will 
most likely lead to a finding of "likeness".  On  the other hand, focusing on the service activity per se  
also allows to make distinctions, where appropriate .  Thus, for example, in the case of "specialized 
medical services" covered by the CPC number 93122, one will need to further distinguish between 
different kinds of specialization.  A cardiologi st's activity will be distinguishable from an 
ophthalmologist's – and the differe nce in activity will also tell something about whether these two 
specialized services can compete.  Or, to take one example from environmental services, "nature and landscape protection services" covered by CPC number 9406 include service activities as diverse as 
ecosystem protection services, disaster assessment a nd abatement services, climate change studies.  
The capability of serving the same or partially common end uses will normally also confirm the similarities or differences of two services resulting from an analysis of the "attributes" or "features" of 
a service per se .  Thus, to return to the example of specialized medical services, a service by a 
cardiologist will also serve a different purpose th an a service by an ophthalmologist.  Reliance on 
more subjective elements – such as consumer per ception – may greatly reduce predictability of GATS 
commitments and obligations, contrary to the objec tives of the WTO Agreement.  This is especially 
so when consumer perception may have been aff ected by past or current regulatory or other 
restrictions.   
4.39 Differences in elements extrinsic to the services themselves – such as in terms of law 
enforcement and consumer protec tion, protection of youth – are not as such relevant to decide 
whether two services are "like" (eve n if they may respond to differen ces in the characteristics of two 
services).  Otherwise, given that services provided cross-border are often regulated differently from services provided domestically, there could hardly ever be likeness between the former and the latter.  Thus, for example, US international telecomm unication service providers would not be like the 
domestic Mexican provider because the Mexican regulat or cannot impose fine on them.  Likewise, the 
nature or identity of the shareholders of two servi ce suppliers may not as such make services "unlike".   
4.40 The European Communities further submits that paragraph 3 of Article XVII expressly refers 
to a modification of the conditions of competition (t o the detriment of foreign services and suppliers) 
as an indication of "less favourable treatment".  Th is provision suggests that the purpose of the GATS 
national treatment obligation is to protect the e xpectations of equal competitive conditions between 
foreign and domestic services and suppliers.
552  A notion of "likeness" that were so narrow such that it 
would not be permissible to take account of the competitive relationship between foreign and 
domestic services would not seem to be in line with the full text and objective of Article XVII. 
4.41 For the European Communities, the fact that a prohibition on the "supply of gambling and 
betting services from outside the United States to consumers in the United States" would violate 
GATS provisions does not rule out that the violations may be justified under GATS Article XIV thereof.  In view of the close correspondence in  wording and function between Article XIV of the 
GATS, and Article XX of the GATT 1994, the Eu ropean Communities concurs with Antigua and 
Barbuda that the former provision is an affirmativ e defence.  As such, it would be up to the United 
                                                      
551 Appellate Body Report on EC – Bananas III , para. 227;  Panel Report on Canada – Autos,  
paras. 10.248, 10.285 and 10.289. 
552 Similarly to Article III of GATT 1994 (see Appellate Body Report on EC – Asbestos , paras. 98-99, 
referring to the Appellate Body Report on Japan – Alcoholic Beverages II , paras. 109-110).  WT/DS285/R 
 Page 129 
 
 
States to show that a prohibition on cross-border s upply of services is justified on grounds foreseen in 
Article XIV (which it has not done in its first wr itten submission).  For the same reasons of close 
similarity to Article XX of the GATT 1994 both in  drafting and in function, Article XIV should be 
interpreted in the light of the pertinent GATT acquis .   
C. JAPAN  
4.42 On the issue of whether the United Stat es undertook commitments on gambling and betting 
services (CPC 96492), Japan submits that the relations  between the headings in the US Schedule and 
CPC classification is not clear, as there is no explicit reference to CPC number in the US Schedule.  This is an issue of vital importance for the lega l stability of the commitments undertaken by Members 
during the Uruguay Round and the continuing servi ces negotiations.  The 1993 Scheduling Guidelines 
state in paragraph 15 that "the legal nature of a schedule as well as the need to evaluate commitments, 
require the greatest possible degree of clar ity in the description of each sector and 
sub-sector scheduled", and make reference to the W/120 and CPC numbers.  It might be argued that 
the same paragraph states that only "(i)n general," "the classification of sectors and sub-sectors should 
be based on the Secretariat's revised Services Sect oral Classification List."  Moreover it might be 
argued that the 1993 Scheduling Guidelines is not a legally binding document.  However, given the 
practice of Members to frequently refer to this document, to W/120 and the CPC in the course of negotiations and after, it could at least be said that there existed an implicit confidence among 
Members that each would respect those documents and classification.  The question seems to be whether offers are sufficiently de fined when not referencing or relying on the CPC, without any 
positive indication of the items which are included.  Should this be the case, then Members would be 
forced, in the context of current servi ces negotiations, to bring with them the Merriam-Webster's 
Collegiate Dictionary  on every bilateral exchange with the Unite d States.  Or they would be forced to 
request the United States to provide a set of US de finitions for the respective sectors and sub-sectors 
where commitments are proposed in the US initia l offer (TN/S/O/USA), possibly together with 
corresponding US domestic industrial classification. 
4.43 In this dispute, if the United States is to refu se to accept that it has undertaken commitment on 
gambling and betting services (CPC 96492), it is not su fficient to merely prove that the said services 
are not included in sub-sector 10.D of its Schedule.   The United States should also elaborate on what 
specific service sub-sectors are actually included under the same heading.  The United States also fails 
to prove that it made it sufficiently clear at th e time of Uruguay Round negotiations on which specific 
sub-sectors that it intended to undertake co mmitments under the heading  "10.D. OTHER 
RECREATIONAL SERVICES (except sporting)."  Had there not been, at the time of the 
negotiations, an explicit and comprehensive statem ent by the United States regarding the specific 
content of that heading in its Schedule, the gene ral expectation that the United States respected the 
structure of W/120 and the CPC needs and deserves a full protection; when specific commitments are 
undertaken on a CPC four digit-number service ite m, it indicates that those specific commitments 
cover all CPC five digit-number service items.  Ja pan notes that its arguments above are without 
prejudice to a possibility that some sub-classificati on of a service sector specifically committed under 
a heading in the sector/sub-sector column of a Me mber's schedule or some measures thereupon could 
be affected by some provisions of the GATS and its Annexes, such as Article I:3(b). 
4.44 Concerning the issue of interpretation of "like services" as provided in Article XVII of the 
GATS, Japan notes Antigua's arguments that the issue of "likeness" plays a less significant role in the 
context of trade in services than in the context of  trade in goods, and that the characteristics of a 
specific service or service supplier are often not in herently "locked in" to the product and are often 
easily adaptable.  This issue of "likeness", however , requires a cautious consideration of all conditions 
surrounding services, including appropriate policy cons iderations.  Moreover, in Japan's view, it 
should be confirmed that identification of "likeness"  of trade in services should be made, as that of 
trade in goods, on a case-by-case basis, on certain  criteria and without over-simplification or 
excessive generalization of the characteristics of servi ces or service suppliers; mere similarity in the WT/DS285/R 
Page 130  
 
appearance of types of games or in the essential nature or functions of winning and losing money 
should not suffice to identify the "likeness" of ser vices.  Japan could support the US argument that 
"likeness" of services should be identified, as appr opriate, taking into account such elements as 
consumer perception, scope of availability, law en forcement environment and possible risk involved 
in some particular services.  In fact, such scope for argument is, Japan believes, a necessary 
component of the very structure of the GATS.  It could be argued that the US restrictions on Internet 
gambling which are equally applicable within the United States might have some implication on the 
US consistency with Article XVI of the GATS. 
4.45 In some service sectors, it could be argued, in  identifying "likeness", differences in regulatory 
circumstances need to be, as appropriate, taken acco unt of.  When services are supplied cross-border, 
regulatory circumstances are completely different  from those supplied through commercial presence; 
service suppliers are outside the country and ther efore are not administratively and judicially 
accountable to the government or to the consumer s in the same manner as domestic suppliers.  In 
gambling and betting services, for example, in which policy considerations such as prevention of international organized crimes are particularly essentia l, such a difference in regulatory circumstances 
might justify, to a certain extent, different regulator y framework to be applied to different modes.  In 
other words, certain services, when supplied cro ss-border, are recognized to be under less sound 
regulatory circumstances than when supplied dom estically; it therefore could be argued from the 
viewpoint of the consuming Member, these two cases are not like services to be accorded the same treatment.  Under a full national treatment commitme nt in cross-border mode, it is considered that 
there is still room, at least in some services, for treating as not like services, cross-border services and 
commercial-presence services of similar appearance and functions, if the necessity of differentiated 
treatment in light of high regulatory requirement an d difference in regulatory circumstances, etc. is 
sufficiently proven by the consuming Member.  
4.46 Without prejudice to the arguments above, and ta king carefully into account the reference to 
the same question in the Panel Report on Canada – Autos
553, Japan also would like to invite attention 
of the Panel to the issue of a possible functio n of modes of supplying services in identifying 
"likeness" of services.  When this issue was take n up by the Council for Trade in Services in its 
Regular Session meeting on 19 March 2002 under an age nda item of "proposal for a technical review 
of GATS provisions", the views of Members were not uniform.554  In these discussions, Members' 
attention was drawn to the commonality of the u sage of "like services and service suppliers" in GATS 
Articles II:1 and XVII:1-3.  In the absence in Article  II of the phrase "in the sectors inscribed in its 
Schedule", the obligation apparently covers all services sectors and sub-sectors whether commitments 
are undertaken or not.  This, if "likeness" of services is to be established across modes, in turn could 
effectively expand the obligation of a Member beyond what it has inscribed in its Schedule.  When Member A, for example, has inscribed "None" in the mode 3 national treatment column in a particular service sector, Member A is obliged through Article  XVII of the GATS to extend to like services and 
service suppliers of Member B treatment ("treatment  b") in the same mode no less favourable than 
that it accords to its own service and service supplie rs.  Then, through Article II of the GATS, in turn, 
Member A is obliged to extend treatment no less fa vourable than "treatment b", to like services and 
service suppliers of Member C, for example, in cross-border mode of supplying services, whatever 
inscription Member A has made in the mode 1 nati onal treatment column in the same particular 
service sector.  Therefore, there was a suggestion that modes of supplying services might have a 
certain function in identifying "likeness" of services.  This consideration is not explicit in the Panel 
Report on Canada – Autos .  Japan, therefore, considers that a possible function of the mode of 
supplying services, together with the findings of the Canada – Autos  Panel Report needs to be 
considered, if at all the Panel needs to make findings upon the issue of "likeness" of services. 
                                                      
553 Panel Report on Canada – Autos , para. 10.307. 
554 S/C/M/59, paras. 20-39  WT/DS285/R 
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D. MEXICO  
4.47 Mexico submits that its government  has decided to participate as a third party in this dispute 
because of its systemic interest in the proper in terpretation and application of the GATS disciplines 
and of the specific commitments of WTO Members on national treatment and market access.  Of particular interest to Mexico is the relationship between the specific commitments of WTO Members, 
the W/120, and the CPC.  Mexico disagrees with th e US contention that the CPC numeric codes are 
not relevant in interpreting the United States' sp ecific commitments under the GATS.  In Mexico's 
view, the CPC is a means of interpreting and giving meaning to the United States' specific 
commitments.  
4.48 Firstly, Mexico shares the view expressed by Canada that "[t]he common intention of 
Members in regard to the Schedule of the United States is that where it simply follows the W/120 
Classification List, without clearly and explic itly departing from it and the corresponding CPC 
numbers, it must be inferred that the United States' specific commitments are to  be interpreted in the 
light of the W/120 Classification List and the CPC numbers associated with it".
555  Secondly, Mexico 
considers that the W/120 and the corresponding  CPC numeric codes unquestionably qualify as 
"supplementary means of interpretation" under Article  32 of the Vienna Convention.  As such, they 
can always be used to confirm the meaning of the United States' specific commitments resulting from 
the application of the general rule of interpretati on in Article 31 of the Vienna Convention, or to 
determine the meaning when the interpretation acco rding to Article 31 leaves the meaning ambiguous 
or obscure.  Consequently, it is wrong to re fer, as the United States has done, to "non-CPC 
commitments".  Under Article 32, the CPC numeric  codes and definitions can be relevant in 
interpreting the Schedule of Specific Commitments of all WTO Members. 
E. CHINESE TAIPEI  
4.49 Chinese Taipei did not submit its views to the Panel.556 
V. INTERIM SECTION 
5.1 On 7 April 2004, pursuant to Article 15.2 of the DSU, Article 16 of the Panel's Working 
Procedures and the revised Timetable for Panel Pr oceedings, the parties provided their comments on 
the Interim Report.  None of the parties requested a further meeting to review part(s) of the Panel's 
Report. On 16 April 2004, pursuant to the revised Timetable for Panel Proceedings, the parties submitted further written comments on the comments th at had already been provided on the Panel's 
Interim Report on 7 April 2004.   
5.2 Pursuant to Article 15.3 of the DSU, this sec tion of the Panel Report contains the Panel's 
response to the main comments made by the parties in relation to the Interim Report and forms part of 
the Findings of the Panel's Report. 
A. P
UBLIC RELEASE OF THE CONFIDENTIAL INTERIM REPORT  
5.3 When, on 24 March 2004, the Panel transmitted its Interim Report to the parties, we clearly 
indicated that such Interim Report was strictly conf idential.  Indeed, pursuant to the DSU, all panel 
proceedings remain confidential until the Panel Repor t is circulated to the WTO Members.  We had 
also explicitly emphasized at all our meetings with  the parties that the Panel's proceedings were 
confidential.  This was accepted by the parties and reflected in the Panel's Working Procedures and in 
all our relevant correspondence with the parties. 
                                                      
555 See above para. 4.9. 
556 Chinese Taipei replied, however, to various questions from the Panel (see Annex C). WT/DS285/R 
Page 132  
 
5.4 Therefore, we note with concern that the conf identiality of the Panel proceedings has been 
breached on various occasions. 
5.5 For instance, it has come to our attention that  the representative of Antigua and Barbuda has 
been quoted in press releases as commenting on c onfidential aspects of the Panel proceedings.
557  
Within hours of its transmission to the parties, th e Interim Report was referred to in the press and 
commented upon by both parties to the dispute.558  On 26 March 2004, an international law firm 
published a commentary on the Interim Report, from wh ich it appears that the authors, not being a 
representative of either of the parties in this case, had access to the text of the Interim Report.559 
5.6 In its comments to the Panel, dated 16 April 2004, Antigua stated that its delegation:  
"... was contacted by a member of the international press corps who was already 
aware of both the release and the ultimate conclusions of the Interim Report.  The 
press representative in question informed the delegation that information on the 
contents of the report was provided to hi m by sources independent of the parties."560 
5.7 In a letter to the Panel dated 27 April 2004, the United States requested that the Panel:   
"... investigate whether 'sources indepe ndent of the parties' breached the 
confidentiality of the interim report, and that it inform the parties of  the results of this 
investigation and any actions taken in response." 
5.8 The Panel notes first that the statement made by  Antigua and referred to  in paragraph 5.6 is 
very serious in that it may imply that a member of the Panel or the WTO Secretariat breached the 
confidentiality requirement of the DSU.  The Panel wi shes to assert forcefully that neither the Panel 
nor the Secretariat has done so.  Third parties cannot be blamed since they do not receive a copy of 
the Interim Report. 
5.9 On 28 April 2004, the Panel asked Antigua to clarify this statement and, in particular, the 
assertion that information was provided by a source independent of the parties. 
5.10 By letter dated 29 April 2004, Antigua stated as follows: 
                                                      
557 See, for instance, Antigua and U.S. Disagree on Dispute Panel , Online Casino News – August 2003, 
at http://www.casinomeister.com/news/sept2003.html ("When  this route was foiled by an inability to agree on 
the composition of the panel, Antigua lead negotiato r Sir Ronald Sanders accused the Americans for being 
responsible for the lack of progress, saying 'We were prov ided with two lists of people by the WTO secretariat, 
most of whom were rejected by the U.S. on the basis that they didn't like what someone said about them or wrote about them or whatever'.");  U.S. Loses Preliminary Ruling in Review By WTO Internet Gambling 
Restrictions , WTO Reporter, 12 November 2003 ("Antigua's ambassador in London Sir Ronald Sanders, who 
represents the country at the WTO, welcomed the prelim inary decision Nov. 10 as a 'positive development' and 
said the panel was already moving ahead with its work.");  WTO Panel Concludes First Hearing of Antigua-
United States Dispute , found on the website of the Government of Antigua and Barbuda, at http://www.antigua-
barbuda.com/busnss_politics/body_wto_firsthearing.html  ("The Caribbean state's Chief Foreign Affairs 
Representative, Sir Ronald Sanders, said Friday 'This has been a long up hill battle but we have overcome every 
obstacle so far.  These included the US attempt to stop th e establishment of the Panel, then its failure to agree 
with us on the composition of the Panel, and finally its filing of a 'no-case' submission which was overturned by 
the Panel."). 
558 See, for instance, Antigua Claims Victory O ver US in Gaming Dispute , by R. Waddington, Reuters, 
24 March 2004, found at http://msnbc.msn.com/id/4594859/;  WTO Ruling Said To Open U.S. To Internet 
Gaming , by Scott Miller from the Wall Street Journal, pub lished by Dow Jones Newswires on 24 March 2004.   
559  See WTO Panel Rules Against United States in Internet Gambling: What Does it Mean ? By Kay 
Georgi and Philippe Vlaemminck, Coudert Brothers.  
560 Comments by Antigua and Barbuda on the Request by the United States for Review of Precise 
Aspects of the Interim Report , 16 April 2004.  WT/DS285/R 
 Page 133 
 
 
"On 24 March 2004 the Antiguan delegation w as approached by a member of the 
international press corps who was clearly aware of both the release of the Interim 
Report and its overall conclusion.  The journalist did not disclose the source of the information to the Antiguan delegation, nor does the delegation have any idea to date 
what the source was. 
Please note that Antigua did not make any allegation with respect to the source of the 
information; rather in the Comments Antigua  simply reported what was told to the 
Antiguan delegation by the journalist.  Antigua offers its apologies for any 
misunderstanding." 
5.11 Assuming that Antigua's assertions are true, in the Panel's view, even if the journalist had 
claimed to have received information about th e Interim Report from a source independent of the 
parties, it was inappropriate, in light of the conf identiality requirement contained in the DSU, for 
Antigua, as a party, to have commented to the journalist on the contents of the Report.   
5.12 In light of the circumstances, the United States felt obliged to comment on the Interim Report, 
and, thereby, also violated its obligation to ensure confidentiality of the Interim Report.  
5.13 To conclude, the Panel wishes to emphasize that  disregard for the confidentiality requirement 
contained in the DSU affects the credibility and in tegrity of the WTO dispute settlement process, of 
the WTO and of WTO Members and is, therefore, unacceptable. 
B. E
DITORIAL /TYPOGRAPHICAL CHANGES  
5.14 The parties have suggested a number of editori al changes to the Panel's Interim Report and 
corrections of typographical errors.  The Panel has largely accepted these suggestions.  As requested 
by the United States, the Panel has clarified and/ or elaborated upon certain factual descriptions 
contained in the Interim Report, including those re lating to the Travel Act, the Illegal Gambling 
Business Act, statistics on US enforcement and the websites of TVG, Capital OTB and 
Xpressbet.com.  The United States has also asked the Panel to reconsider  the use of certain terms such 
as "expectations", "errors", "late submissions" and mo re or less "trade restrictive" and the Panel has 
done so. 
5.15 Antigua requested the Panel to add references to support a conclusion that Antigua has made 
a prima facie demonstration that the federal measu res at issue prohibit the cross-border supply of 
gambling and betting services.  The Panel believes that Antigua is not entitled at this late stage of the 
proceedings to attempt to make or add to its demonstration of its claims that the GATS has been violated. 
C. M
EMBERS ' RIGHT TO REGULATE AND TO PROHIBIT GAMBLING AND BETTING SERVICES  
5.16 The United States has suggested that the appro ach taken by the Panel in the Interim Report 
may be read as "supporting the criticisms levelle d by numerous groups against the GATS as being 
overreaching and an unjustified intrusion into the so vereign ability of Members to regulate in the area 
of services". 
5.17 In our view, it is clear that WTO Members do have the right to regulate and to prohibit 
gambling and betting services, if they so wish.   In the present case, we reached the conclusion that the 
United States had undertaken a specific commitment  for cross-border supply of gambling and betting 
services.  In this context, the Panel would like to reiterate here its Concluding Remarks contained in 
paragraphs 7.3 and 7.4 of  the Interim Panel Report: WT/DS285/R 
Page 134  
 
"The Panel wishes to note that it is well aware of the sensitivities associated with the 
subject-matter of this dispute, namely gambling and betting services.  Our conclusions are directly linked to the partic ular circumstances of this dispute.  We 
note in this regard that the United Stat es may well have inadvertently undertaken 
specific commitments on gambling and betting services.  However, it is not for the 
Panel to second-guess the intentions of the United States at the time the commitment 
was scheduled.  Rather, our role is to in terpret and apply the GATS in light of the 
facts and evidence before us.    
We also wish to emphasize what we have not decided in this case.  We have not 
decided that WTO Members do not have a right to regulate, including a right to 
prohibit, gambling and betting activities.  In this case, we came to the conclusion that 
the US measures at issue prohibit the cross-border supply of gambling and betting services in the United States in a manner inconsistent with the GATS.  We so decided, not because the GATS denies Member s such a right but, rather, because we 
found, inter alia , that, in the particular circumstances of this case, the measures at 
issue were inconsistent with the United  States' scheduled commitments and the 
relevant provisions of the GATS." 
D. T
HE US SCHEDULE  
5.18 The United States has suggested that the Panel, in its interpretation of the US Schedule, had 
set aside the ordinary meaning of "sporting", wh ich it had excluded from its specific commitment 
under sub-sector 10.D ("Other recreational services (e xcept sporting)").  The United States has also 
argued that the Panel has accorded undue importa nce to the context (i.e. the 1993 Scheduling 
Guidelines and W/120) and, by so doing, it has i gnored the difference between Members' schedules 
that include explicit references to the CPC and those that do not.  
5.19 Although the terms "gambling and betting services" do not appear in its Schedule, the United 
States has undertaken specific commitments under sub-sector 10.D, entitled "Other recreational 
services (except sporting)".  The Schedule does not provide a definition of t hose terms and during the 
Panel proceedings, the United States did not provide  any definitional framework of its schedule in 
general and this entry in particular, even in res ponse to a specific question by the Panel on the issue.561  
The Panel was, thus, obliged to interpret the US  specific commitments under sub-sector 10.D in order 
to give meaning to the terms contained therein.  Th e Panel did so by examining, first, the ordinary 
meaning of such terms.  Since the dictionary de finitions of the term "Other recreational services 
(except sporting)" did not allow a definitive conclusi on to be reached, the Pane l continued its analysis 
to consider the context of that term, in accord ance with the Vienna Convention on the Law of 
Treaties.  
5.20 When the Panel made reference to the 1993 Sc heduling Guidelines and to W/120 as "context" 
of the GATS, it did not suggest that such "context" was part of  the GATS.  The relevant "context" 
was never considered with a view to identifying an y obligations that could have been imposed on the 
United States.  Rather, when interpreting the sp ecific commitment undertaken by the United States, 
the Panel read the US Schedule in light of  the 1993 Scheduling Guidelines and W/120.  The Panel, 
therefore, did not reach the conclusion that sch edules that contain references to the CPC are 
necessarily like schedules that do not contain such re ferences.  The Panel  reached the conclusion that 
the effective interpretation of the terms "Other  recreational services (except sporting)" in the 
circumstances of this case included gambling and betting services. 
                                                      
561 Panel question No 5.  WT/DS285/R 
 Page 135 
 
 
E. MEASURES AFFECTING THE CROSS -BORDER SUPPLY OF TRADE IN SERVICES  
5.21 The United States has argued that the Interim Report does not address the issue of the legal 
consequences flowing from the fact that, under US law, state laws cannot be and are not used to 
prosecute conduct by an actor located wholly outs ide the state and having no presence there.  The 
United States has also submitted that it is not awar e of any argumentation by Antigua on this issue 
that would allow the Panel to resolve the issue of applicability of these state laws to the cross-border 
supply of gambling and betting services.  
5.22 In our view, the state laws at issue are w ithin the scope of the GATS since these measures 
"affect trade in services" within the meaning of Ar ticle I:1 of the GATS.  The Panel has found that the 
measures at issue entail prohibitions  on the supply of gambling and betting services.  In our view, 
prohibitions on certain types of activities necessarily affect trade in services with respect to that 
activity.  We agree with the Appellate Body's statement in EC – Bananas III  that "the scope of the 
GATS encompasses any measure of a Member to the extent it affects the supply of a service 
regardless of whether such measure directly gove rns the supply of a service or whether it regulates 
other matters but nevertheless affects trade in servi ces".   There is no reason why measures adopted by 
regional and local governments and authorities cannot a priori  "affect the supply of a service" within 
the meaning of Article I:1 of the GATS, even if su ch measures cannot be enforced extraterritorially. 
5.23 This being said, we would like to emphasize that whether a measure "affecting trade in 
services" within the scope of the GATS in accordance with Article I:1 is inconsistent with one or 
more provisions of the GATS is a distinct matter which calls for a separate determination under the 
relevant GATS provisions. 
5.24 We have revised the section of the Interim Re port entitled "Measures at issue" so as to more 
clearly reflect our understanding of the meaning of Ar ticle I:1 of the GATS and its application in this 
case. 
F. ARTICLE XIV 
5.25 The United States objected to the interpretation and application of Article XIV of the GATS 
made by the Panel.  In particular, the United Stat es objected to the Panel's conclusion that it had a 
"burden" to prove that it could not guard against those risks specific to remote gambling by means having a less restrictive trade impact than a prohi bition on the remote supply of gambling and betting 
services.  According to the United States, there is no such "burden" under Article XIV.  The United 
States also opposed the Panel's conclusion that , in the context of the necessity test under 
Articles XIV(a) and (c), the United States was ob liged to consider invitations by Antigua and 
cooperation with other Members to address concerns  expressed by the United States to justify its 
prohibition on gambling and betting services by remo te means and to explore whether there were 
WTO-consistent alternatives. 
5.26 It is well established under WTO law that it is for the Member invoking the application of a 
justification provision (such as Article XIV of the GA TS) to demonstrate that it has complied with the 
requirements of such a provision.  It was, theref ore, for the United States to demonstrate that the 
measures at issue were "necessary"  to "protect public morals" or to "maintain public order".  The 
Panel reached the conclusion that the measures at i ssue were indeed designed so as to protect public 
morals or to maintain public order; but the Unite d States had failed to demonstrate that they were 
"necessary" since it had not shown that there was no WTO-consistent alternative measure reasonably 
available that would provide the United States with the same level of protection against the risks it 
had identified.  It was in this context that we c onsidered it relevant that the United States had not 
accepted Antigua's invitation to discuss and consider WTO-consistent alternatives that might or could 
address the United States' concerns.   WT/DS285/R 
Page 136  
 
5.27 Even if the United States had considered that no such alternative currently exists, it could not 
properly have prejudged the situation that may arise in the future.  It is because the United States had 
made a specific market access commitment with resp ect to cross-border trade of gambling and betting 
services that it was obliged to consider WTO-consis tent alternatives, including those that may be 
suggested by Antigua and other Members before a nd while maintaining its prohibition on the cross-
border supply of gambling and betting services. 
5.28 Finally, we would like to reiterate that in concluding that the United States had not fulfilled 
the conditions in order to benefit from the protection of Article XIV of GATS in the circumstances of the present case, we have neither found nor mainta in that WTO Members, including  the United 
States, have forfeited their sovereign right and ab ility to regulate the cross-border supply of services, 
consistently with the GATS, particularly for the prot ection of public morals or for the maintenance of 
public order. 
VI. FINDINGS 
A. I
NTRODUCTION  
1. Terms of reference of this Panel 
6.1 The terms of reference of this Panel are determ ined by the Request for the Establishment of a 
Panel circulated by Antigua and Barbuda to the DSB on 13 June 2003.562  The Panel request refers to 
the specific GATS provisions that, according to Antigua , have been violated by the United States as 
well as the US measures that Antigua wishes to challenge.   
6.2 Antigua has claimed that the GATS Schedul e of the United States includes specific 
commitments on gambling and betting services.  Antigua  has further claimed violations of, and has 
developed argumentation in its s ubmissions with respect to, Articles VI:1, VI:3, XVI:1, XVI:2, 
XVII:1, XVII:2, XVII:3 and XI:1 of the GATS.563   
6.3 The United States denies these claims.  It argu es that its Schedule makes no such commitment 
on gambling and betting services and that, in any case, th e measures at issue are not inconsistent with 
its GATS obligations.  It also invokes Article XIV(a)  and Article XIV(c) of the GATS in its defence. 
2. Structure of this Panel Report 
6.4 Since all the provisions in respect of which Antigua has developed violation claims are 
applicable only in sectors and sub-sectors in which specific commitments exist, the Panel will need to 
examine whether the United States has undertaken a specific commitment with  respect to gambling 
and betting services.  The Panel will examine this issue first because the absence of any relevant 
commitment by the United States would suffice to dismiss this case.  
6.5 Secondly, the Panel will address the issue of, and the difficulties associated with, the 
identification, interpretation and effect of the measu re(s) being challenged by Antigua.  The Panel will 
have to determine whether Antigua has identifie d with sufficient clarity the measures it seeks to 
challenge.  In particular, the Panel will have to determine, inter alia , whether, under the GATS and 
the DSU, Antigua can challenge in dispute settlement proceedings what Antigua refers to as a "total 
prohibition" on the cross-border supply of gambling a nd betting services, as a measure in and of itself. 
                                                      
562 WT/DS285/2, 13 June 2003 (hereinafter referred to  as the "Panel request").  See the Request for 
Preliminary Rulings in Annex B. 
563 The Panel notes that, in the Panel request, Antigua  claimed violation of Article VIII of the GATS, 
paras. 1 and 5.  However, Antigua did not pursue this claim during the Panel proceedings.  WT/DS285/R 
 Page 137 
 
 
6.6 Thirdly, the Panel will examine whether Antigua has demonstrated that the measures at issue 
violate the relevant GATS provisions identified in the Panel request.  The Panel will proceed in the 
following order:  Article XVI, paragraphs 1 and 2;  Article XVII, paragraphs 1 to 3;  Article VI, 
paragraphs 1 and 3;  and Ar ticle XI, paragraph 1.   
6.7 If necessary, that is, if a violation of any of the GATS provisions invoked by Antigua is 
established, the Panel will examine whether the Un ited States has demonstrated that the challenged 
measures are justified under Article XIV (a) and/or (c) of the GATS. 
3. Interpretation of WTO provisions  
6.8 The Panel recalls Article 3.2 of the DSU which states that: 
"The dispute settlement system of the WTO is a central element in providing security 
and predictability to the multilateral tradin g system.  The Members recognize that it 
serves to preserve the rights and obligations of Members under the covered agreements, and to clarify the existing provi sions of those agreements in accordance 
with customary rules of interpretation of public international law.  Recommendations 
and rulings of the DSB cannot add to or diminish the rights and obligations provided 
in the covered agreements." 
6.9 It is now established
564 that the "customary rules of interpretation of public international law" 
include at least Articles 31, 32 and 33 of the Vie nna Convention on the Law of Treaties (hereinafter 
referred to as the "Vienna Convention").  Accordingl y, in this dispute, we will make reference to 
Articles 31, 32 and 33, which are cited below. 
6.10 Articles 31, 32 and 33 of the Vienna Convention read as follows:  
"Article 31  
(General rule of interpretation ) 
1. A treaty shall be interpreted in goo d faith in accordance with the ordinary 
meaning to be given to the terms of the trea ty in their context and in the light of its 
object and purpose. 
2. The context for the purpose of the inte rpretation of a treaty shall comprise, in 
addition to the text, including its preamble and annexes: 
(a) any agreement relating to the treaty which was made 
between all the parties in connexion with the conclusion of the treaty; 
(b) any instrument which was made by one or more parties in 
connexion with the conclusion of the treaty and accepted by the other 
parties as an instrument related to the treaty. 
3. There shall be taken into account, together with the context: 
(a) any subsequent agreement between the parties regarding the 
interpretation of the treaty or the application of its provisions; 
                                                      
564 See for instance Appellate Body Reports on US – Gasoline , p. 17; EC – Hormones , para. 181; India 
– Patents (US) , para. 45; and US – Shrimp , para. 114. WT/DS285/R 
Page 138  
 
(b) any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation; 
(c) any relevant rules of international law applicable in the 
relations between the parties. 
4. A special meaning shall be given to a te rm if it is established that the parties 
so intended. 
Article 32  
(Supplementary means of interpretation ) 
Recourse may be had to supplementary me ans of interpretation, including the 
preparatory work of the treaty and the circumstances of its conclusion, in order to 
confirm the meaning resulting from the applica tion of Article 31, or to determine the 
meaning when the interpretation according to Article 31: 
 (a) leaves the meaning ambiguous or obscure;  or  (b) leads to a result which is manifestly absurd or unreasonable." 
Article 33 
(Interpretation of treaties authenticated in two or more languages ) 
1.  When a treaty has been authenticated in two or more languages, the text is 
equally authoritative in each language, unless the treaty provides or the parties agree 
that, in case of divergence, a particular text shall prevail. 
2.  A version of the treaty in a language other than one of those in which the text 
was authenticated shall be considered an au thentic text only if the treaty so provides 
or the parties so agree. 
3.  The terms of the treaty are presumed to have the same meaning in each 
authentic text. 
4.  Except where a particular text preva ils in accordance with paragraph 1, when 
a comparison of the authentic texts discloses a difference of meaning which the 
application of Articles 31 and 32 does not re move, the meaning which best reconciles 
the texts, having regard to the object and purpose of the treaty, shall be adopted." 
4. Burden of proof 
6.11 The Panel recalls the rules on burden of proof in WTO dispute settlement proceedings, which, 
in essence, require that a party asserting an allegation must prove it.   
6.12 In US – Wool Shirts and Blouses , the Appellate Body made the following statement on the 
issue of burden of proof: 
"[W]e find it difficult, indeed, to see how any system of judicial settlement could 
work if it incorporated the proposition th at the mere assertion of a claim might 
amount to proof.  It is, thus, hardly surpri sing that various international tribunals, 
including the International Court of Justi ce, have generally and consistently accepted  WT/DS285/R 
 Page 139 
 
 
and applied the rule that the party who asser ts a fact, whether the claimant or the 
respondent, is responsible for providing proof  thereof. Also, it is a generally-accepted 
canon of evidence in civil law, common law a nd, in fact, most jurisdictions, that the 
burden of proof rests upon the party, whethe r complaining or defending, who asserts 
the affirmative of a particular claim or defence.  If that party adduces evidence 
sufficient to raise a presumption that what is claimed is true, the burden then shifts to 
the other party, who will fail unless it adduces sufficient evidence to rebut the 
presumption. 
In the context of the GATT 1994 and the WTO Agreement , precisely how much and 
precisely what kind of evidence will be required to establish such a presumption will 
necessarily vary from measure to measure, provision to provision, and case to 
case."565 
6.13 The Panel in Turkey – Textiles , in a finding not addressed by the Appellate Body,  summed up 
the rules on burden of proof under WTO jurisprudence as follows: 
"(a) it is for the complaining party to establish the violation it alleges; 
(b) it is for the party invoking an excepti on or an affirmative defence to prove 
that the conditions contained therein are met; and 
(c) it is for the party asserting a fact to prove it."566 
6.14 Therefore, in the present dispute, it is for An tigua to establish that the measures at issue 
violate Articles XVI, XVII, VI and XI of the GATS, while it is for the United States to establish, if 
need be, that the challenged measures benefit from th e justification provisions of Article XIV of the 
GATS. 
5. Judicial economy 
6.15 In deciding whether to exercise judicial economy over any of Antigua's claims, the Panel 
recalls that the principle of judicial economy is recognized in WTO law.  In US – Wool Shirts and 
Blouses , the Appellate Body made clear that panels ar e not required to address all the claims made by 
a complaining party.  The Appellate Body relied on the explicit aim of the dispute settlement 
mechanism, which is to secure a positive solution to a di spute (Article 3.7) or a satisfactory settlement of 
the matter (Article 3.4).  Thus, the basic aim of dispute sett lement in the WTO is to settle disputes and 
not to develop jurisprudence.  The Appellate Body stated:   
"[G]iven the explicit aim of dispute settlement that permeates the DSU , we do not 
consider that Article 3.2 of the DSU  is meant to encourage either panels or the 
Appellate Body to 'make law' by clarifying existing provisions of the WTO 
Agreement  outside the context of resolving a particular dispute.  A panel need only 
address those claims which must be addressed in order to resolve the matter in issue in the dispute.
567"568 
6.16 In its supporting reasoning, the Appellate Body also explored Article 11 of the DSU, the 
provision setting out the mandate of panels, and found nothing in this  provision that would require 
                                                      
565 Appellate Body Report on US – Wool Shirts and Blouses , p. 14. 
566 Panel Report on Turkey – Textiles , para. 9.57.  See also Panel Report on Argentina – Textiles and 
Apparel , paras. 6.34-6.40. 
567 (original footnote ) The "matter in issue" is the "matter referred to the DSB" pursuant to Article 7 of 
the DSU. 
568 Appellate Body Report on US – Wool Shirts and Blouses , p. 19. WT/DS285/R 
Page 140  
 
panels to examine all legal claims made by a complaining party.  The Appellate Body relied on 
previous dispute settlement practice, inter alia , under the GATT 1947.  Specifically, it stated:  "if a 
panel found that a measure was inconsistent w ith a particular provision of the GATT 1947, it 
generally did not go on to examine whether the measure was also inconsistent with other 
GATT 
provisions that a complaining party may have argued were violated."569   
6.17 Yet, the Panel is aware of the limits to its discr etionary right to exercise judicial economy.  As 
the Appellate Body stated in Australia – Salmon , the right to exercise judicial economy cannot be 
exercised where only a partial resolution of a dispute will result: 
"The principle of judicial economy has to be applied keeping in mind the aim of the 
dispute settlement system.  This aim is to resolve the matter at issue and 'to secure a 
positive solution to a dispute'.  To provide only a partial resolution of the matter at 
issue would be false judicial economy.  A panel has to address those claims on which a finding is necessary in order to enable the DSB to make sufficiently precise recommendations and rulings so as to a llow for prompt compliance by a Member 
with those recommendations and rulings 'in order to ensure effective resolution of 
disputes to the benefit of all Members.'"
570 
6.18 In the present dispute, the Panel will need to address the issue of judicial economy and it will 
do so according to these guiding principles. 
6. Definitional issues   
6.19 A number of definitional issues have arisen in this dispute that need clarification before the 
Panel can proceed further with its examination of Antigua's claims.   
(a) Definition of "gambling and betting services" 
6.20 This dispute is about "gambling and betting services".  The Shorter Oxford English 
Dictionary  defines "to gamble" as: 
"[P]lay games of chance for (a lot of) money;   indulge in betting, esp. habitually;  risk 
money, fortune, success, etc., on the outcome of an event [...]."571 
6.21 Pursuant to the Shorter Oxford English Dictionary , "to bet" is defined as: 
"[S]take (an amount of money, etc.) against another's in support of an affirmation or 
on the outcome of a doubtful event;  risk an amount of money etc. against (a person) by agreeing to forfeit it if the truth or outcome is not as specified.  [...]"
572 
6.22 The Panel also notes that, according to the Internet Gambling Report : 
"Gambling involves any activity in which a person places a bet or wager.  Generally, 
a bet or wager occurs when a person risks something of value on the outcome of an 
uncertain event:  (1) in which the bettor does not exercise any control;  or (2) which is 
determined predominantly by chance."573 
                                                      
569 Appellate Body Report on US – Wool Shirts and Blouses , p. 18 (footnote omitted) . 
570 Appellate Body Report on Australia – Salmon , para. 223. 
571 Shorter Oxford English Dictionary, 2002. 
572 Shorter Oxford English Dictionary, 2002. 
573 A .  C a b o t  &  L .  V .  C s o k a ,  What is Gambling? , in Internet Gambling Report, 6th edition, ed. by 
M. Balestra, River City Group, United States, 2003, p. 14.   WT/DS285/R 
 Page 141 
 
 
6.23 The Internet Gambling Report  distinguishes three broad categories of gambling and betting:  
(i) casino-type games, including games such as roul ette, blackjack, slot-machines, poker, craps, and 
baccarat;  (ii) lotteries, including games such as lo tto, keno, bingo, video lottery terminals (VLTs) and 
scratch cards;  and (iii) sports betting, including be tting on the outcome of different sporting events 
(soccer, American football, cricket, etc.).  This last category would also include betting on horseracing  
and greyhound racing.574 
6.24 During these proceedings, the parties gave in dications as to what activities should be 
considered as "gambling and betting" services for the purposes of this dispute.  Antigua indicated that: 
"[A] vast array of gambling and betting games and services are offered on a 
commercial basis in the United States and elsewhere.  These games can typically be 
categorized into one of the following three broad categories:  (i) betting on the 
outcome of events in which the gamblers do not participate, such as sports contests 
(for example, horse races, soccer, American football, basketball, and cricket);  (ii) card games involving monetary stakes (such as poker, black jack and baccarat);
575 and 
(iii) random selection games which are games of chance based on the random 
selection of numbers or other signs and wh ere the random selection is performed by a 
machine or the casting of dice.  This type  of gambling takes various forms, including 
lotto, keno and bingo;  instant lotteries or 'scratch card games';  gambling machines;  and 'table games' such as roulette or 'cra ps'.  Antigua notes that 'gambling', 'gaming', 
'wagering' and 'betting' are different terms for the same basic activity.  [...] 
Antiguan regulation provides for two ki nds of gambling and betting licences – 
interactive gaming and interactive wagering.  The gaming licence is for casino-type, 
random selection and card games and the wa gering licence is for sports betting.  
Some operators possess both licences and players can access either type of service from one internet site
576, while other operators offer only one service.577  Casino game 
operators create "virtual casinos" on thei r web sites with detailed graphics and 
enhancements designed to mimic land-based  casino settings.  These sites offer a 
variety of card and dice games such as poker, black jack, craps and keno, as well as arcade-type games that provide virtual im itations of video poker terminals, slot 
machines and other gambling machines.  B ecause of the highly visual aspect of the 
casino-type games, these services are operated exclusively through internet connection.  The sports betting operators o ffer the chance to wager on the outcome of 
sporting contests in a number of different  ways, such as straight wagers on match 
results, transacting in futures markets in player performances, team performances and 
outcomes of political campaigns and other uncer tain future events, and other forms of 
traditional as well as inventive methods of  wagering.  All Antiguan sports book 
operators maintain an internet web site on which players may place wagers, but many 
operators also make extensive use of telephone betting, as betting on contests or 
performances to occur in the future does not  need to be visual and the events are 
independent of the operator's web site.
 "578 
6.25 In response to a question posed by the Panel, Antigua further indicated that: 
                                                      
574A. Cabot, Traditional Versus Internet Gambling , in Internet Gambling Report, 6th edition, ed. by 
M. Balestra, River City Group, United States, 2003, p. 39. 
575 Antigua notes that, in the context of a casino, card games will often be referred  to as part of a wider 
group of "table games" including random selection games such as roulette or craps. 
576 (original footnote ) See, e.g., www.intertops.com ; www.wsex.com . 
577 (original footnote ) See, e.g.,  www.gamebookers.com ; www.bingomania.net .  
578 Antigua's first written submission, paras. 25, 39-40. WT/DS285/R 
Page 142  
 
"Antigua seeks to supply all types of services that involve the making of a bet or wager to consumers in the United States, subject to services that are prohibited by Antiguan law, such as those involving the use of pornographic, indecent or offensive material.  It is difficult to cover every possible permutation in a list, but the product offerings encompassed by the gambling a nd betting services that Antigua seeks to 
offer include: (i) Random selection games (in whatever form and including games 
that are traditionally described as 'lotteries ' or 'casino-type games' in their probably 
endless permutations).  (ii) Event-based ga mbling.  (iii) Card games and other games 
of skill involving monetary stakes. (iv) Pe rson-to-person gambling (so-called 'betting 
exchanges')."
579 
6.26 The United States indicated that it allows the cross-border supply of certain gambling 
services, such as: 
"[...] (i) persons not involved in the business of gambling may transmit casual or 
social bets by any means, provided that the transmission is permissible under state law;  (ii) pari-mutuel betting services may exchange the accounting data and pictures 
necessary to permit a racetrack outside the United States to offer pari-mutuel betting 
on U.S. races (and vice-versa), provided th at such gambling is legal in both the 
sending and the receiving jurisdictions ; (iii) suppliers of odds making and 
handicapping services (e.g ., handicappers of horse races) as well as other gambling 
informational services may supply such services,  provided that the form of gambling 
that they facilitate is legal in both the sending and the receiving jurisdictions;  (iv) 
gambling websites may (and many do) provide so-called 'free play' games in which 
no real money is wagered."
580 
6.27 Moreover, when asked the supply of which services is prohibited both domestically and on a 
cross-border basis, the United States st ated that the prohibition concerned: 
"[T]he transmission of a bet or wager by a wire communication facility across state or 
U.S. borders, such as Internet and telephone  betting.  Other gambling services that are 
similarly restricted both domestically and cross-border include the mailing of lottery tickets between states, the interstate transportation of  wagering paraphernalia, and 
wagering on sporting events."
581 
6.28 The Panel does not believe that it is necessary in the circumstances of this case to define 
exhaustively the service activities falling under "gambling and betting services", as these are not 
treaty terms in this dispute.  Therefore, the Panel does not need to "interpret" these terms as such.  In 
light of the ordinary meaning of the words, the subm issions of the parties and the specialized literature 
to which we have made reference, the Panel cons iders that "gambling and betting services" include 
any activity involving the placing of a bet or wager,  that is, instances where a person risks something 
of value (generally money) on the outcome of an un certain event.  A bet or a wager can be made with 
respect to casino-type games, lotteries and s porting events, irrespective of how these services are 
supplied.  The Panel notes that the definition of "gambling and betting services" for the purposes of this dispute includes, at a minimum, the services that Antigua seeks to supply cross-border to the 
United States as well as the other services the suppl y of which the United States allows cross-
border.
582 
                                                      
579 Antigua's reply to Panel question No. 33. 
580 United States' second written submission, paras. 26-27. 
581 United States' reply to Panel question No. 35. 
582 For instance the United States refers to "Persons not involved in the business of gambling may 
transmit casual or social bets by any means, provided that the transmission is permissible under state law;  WT/DS285/R 
 Page 143 
 
 
(b) "Cross-border" and "remote" supply  
6.29 This dispute concerns one of the four modes of  supply under the GATS, that is, the so-called 
"cross-border supply" of gambling and betting services (hereinafter also referred to as supply by 
"mode 1"), which is defined in Ar ticle I:2 (a) of the GATS as follows: 
"For the purpose of this Agreement, trade in services is defined as the supply of a 
service: 
(a) from the territory of one Memb er into the territory of any 
other Member; 
[...]" 
6.30 The Explanatory Note on Scheduling of Initial Commitments in Trade in Services583 
(hereafter called "The 1993 Scheduling Guidelines" ) further explains that cross-border supply 
concerns a service "delivered within the territo ry of the Member, from the territory of another 
Member".  The Guidelines also provide the following example of cross-border supply: 
"International transport, the supply of a service through telecommunications or mail, 
and services embodied in exported goods (e.g. a computer diskette, or drawings) are 
all examples of cross-border supply, since the services supplier is not present within 
the territory of the Member where the service is delivered."584 
6.31 In this dispute, the Panel will use the term "c ross-border supply" exclusively in the sense of 
Article I:2(a) of the GATS. 
6.32 "Cross-border" must be distinguished from "rem ote" supply, which is a term that has been 
used by the parties in this dispute.  The Panel will use the latter term to refer to "any situation where 
the supplier, whether domestic or foreign , and the consumer of gambling and betting services are not 
physically together".  In other words, in situati ons of remote supply, the consumer of a service does 
not have to go to any type of outlet where the s upply is supervised, be it a retail facility, a casino, a 
vending machine, etc.  Instead, the remote supplier offers the service directly to the consumer through 
some means of distance communication.585  Hence, cross-border supply is necessarily remote, but 
remote supply amounts to "cross-border" supply only  when the service supplier and the consumer are 
located in territories of different Members.  Th e Panel understands "non-remo te" supply to refer to 
situations where the consumer presents himself or herself at a supplier's point of presence. 
6.33 The expression "means of delivery" will be used  in this Report to refer to the various 
technological means (mail, telephone, Internet, etc. ) by which a service can be supplied cross-border 
                                                                                                                                                                     
Parimutuel betting services may exch ange the accounting data and pictures  necessary to permit a racetrack 
outside the United States to offer pari mutuel betting on U.S. races (and vi ce-versa), provided that such gambling 
is legal in both the sending and the receiving jurisdictions; Suppliers of o dds making and handicapping services 
(e.g., handicappers of horse races) as well as other gambli ng informational services may supply such services, 
provided that the form of gambli ng that they facilitate is legal in  both the sending and the receiving 
jurisdictions; Gambling websites may (and many do) provide so-called 'free play' games in which no real money 
is wagered; any other gambling service that does not cons ist of actual transmission of a bet or wager is legal to 
the extent stated in 18 U.S.C. § 1084(b), provided that it also does not violate state law in the U.S. consumer's 
jurisdiction."  United States' second written submission, paras. 26-27. 
583 The Panel discusses in section VI.B of this Panel Report the legal value of the 1993 Scheduling 
Guidelines in interpreting the GATS.  
584 Scheduling of Initial Commitments in Trade in Services:  Explanatory Note, MTN.GNS/W/164, 
3 September 1993, paras. 18-19.   
585 See United States' first written submission, para. 7 an d United States' reply to Panel question No. 42.   WT/DS285/R 
Page 144  
 
or remotely.  Unless otherwise indicated, "cross-bor der" and "remote" supply cover all the various 
technological means of supplying services.  
B. H
AS THE UNITED STATES UNDERTAKEN SPECIFIC COMMITMENTS ON GAMBLING AND 
BETTING  SERVICES ? 
1. Claims and main arguments of the parties 
6.34 Antigua claims that by virtue of entry 10.D in its GATS Schedule of Specific Commitments586 
under subheading "Other Recreational Services (excep t sporting)", the United States has made a full 
market access and a full national treatment comm itment for the cross-border supply (mode 1) of 
"gambling and betting" services.587  
6.35 The United States denies this claim altogether , contending that its Schedule makes no such 
commitment.588 
6.36 In support of its claim, Antigua argues that the US Schedule is based on the Services Sectoral 
Classification List589 and that sub-sector 10.D of the US Schedule includes CPC category "9649 Other 
recreational services" which encompasses CPC category "96492 Gambling and betting services".590 
6.37 Antigua points out that, since under Article XX: 3 of the GATS, Members' schedules are an 
integral part of the GATS, they must be interpre ted on the basis of the Vienna Convention's rules of 
interpretation.  On that basis, Antigua argues that  an interpretation based on the ordinary meaning of 
the words "Other recreational services" in the US Schedule leads to the conclusion that gambling and 
betting services fall within this broadly worded cat egory.  Alternatively, they could fall under 
sub-sector 10.A, "Entertainment services".  With re spect to the context of the US Schedule, the two 
most important agreements and instruments connected  to the conclusion of the GATS that are relevant 
for the interpretation of GATS Schedule are W/120 a nd the 1993 Scheduling Guidelines.  As to the 
practice in the application of the GATS, Antigua  submits that WTO Members have consistently 
referred to W/120 (and its cross-references to the CPC) as the classification used for GATS purposes 
and as the main point of reference for any discussion on such a classification.  Even the United States International Trade Commission uses W/120 and its cro ss-references to CPC as a tool to interpret the 
US Schedule.  Moreover, the US Draft Final Schedule
591 during the Uruguay Round confirmed that 
the United States had scheduled specific commitmen ts according to the 1993 Scheduling Guidelines 
and W/120.592 
6.38 The United States replies that Antigua has inco rrectly interpreted the US Schedule to the 
GATS.  Even assuming arguendo  the possible relevance of sector 10, Antigua's claims to find there a 
US commitment for cross-border supply of gambling services rely on W/120 and its references to the 
CPC Prov.  Document W/120 is part of the negotiating history of the GATS, which is at best a 
supplementary means of interpreta tion.  The United States argues that the context for the US Schedule 
                                                      
586 The United States of America – Schedule of Specific Commitments, GATS/ SC/90, 15 April 1994 
(hereinafter the "US Schedule"). 
587 Antigua's first written submission, paras. 160-162. 
588 United States' first written submission, paras. 59-62. 
589 Services Sectoral Classificati on List, Note by the Secretariat, MTN.GNS/W/120, 10 July 1991 
(hereinafter the "W/120"). 
590 Antigua's first written submission, paras. 160-162. 
591 Communication from the United Stat es of America, Draft Final Schedule of the United States of 
America Concerning Initial Commitments, MT N.GNS/W/112/Rev.3, 7 December 1993. 
592 Antigua's first written submission, paras. 164-178;  Antigua's first oral statement, paras. 27-32.  WT/DS285/R 
 Page 145 
 
 
includes other Members' schedules.  Accordingly, the proper context for the US Schedule includes the 
fact that some Members based their schedules, or parts of them, on the CPC, while others did not.593   
6.39 The United States submits that a proper interpreta tion of the US Schedule, without recourse to 
the CPC, would show that the United States made  no commitment for measures affecting gambling 
services.  Because of the absence of a textual basis fo r referring to the CPC, the legal definition of the 
scope of a non-CPC commitment must be deduced th rough application of customary rules of treaty 
interpretation.  Antigua's allegations regarding a possible US commitment for gambling services rely 
on sub-sectors 10.A and 10.D of the US Schedule to the GATS, which do not contain an explicit 
reference to gambling services.  The ordinary meani ng of "sporting" in sub-sect or 10.D confirms that 
the United States has made no commitments for gambling and betting under that sub-sector.  
Gambling is a sui generis  activity that, if it belongs anywhere in  sector 10, it can onl y be in sub-sector 
10.E, where the United States made no commitment.594 
6.40 The United States further submits that the USITC Document595 is merely an "explanatory" 
text prepared by an independent agency and does not purport to interpret the US Schedule.596  Finally, 
the cover-note to the US Draft Final Schedule only confirms that the United States followed the 
structure of W/120, without adopting the CPC nomenclature.597  The United States concludes that it 
should come as no surprise that it did not schedul e commitments for gambli ng and betting services, 
given the overriding policy concerns surrounding those services, which are reflected in the extremely 
strict limitations and regulations of these services in the United States.598 
2. Assessment by the Panel 
(a) Method of interpretation to be adopted by the Panel 
6.41 As a preliminary issue in this dispute, the Pa nel will have to decide whether the US Schedule 
includes specific commitments on gambling and betting services notwithstanding the fact that the words "gambling and betting services" do not appear in the US Schedule.   
6.42 Article XX of the GATS provides, in paragra ph 1, that each Member "shall set out in a 
schedule the specific commitments it undertakes under Part III of this Agreement."  Paragraph 3 of 
Article XX stipulates that "[s]chedules of specific commitments shall be annexed to this Agreement 
and shall form an integral part thereof."  In this dispute, there is no controversy about the application 
of Article XX as such, but rather over the inte rpretation of a Member's schedule of specific 
commitments which, pursuant to Article XX,  is an integral part of the GATS. 
6.43 The section of the US Schedule in respect of wh ich the parties have diverging views reads as 
follows:
599 
                                                      
593 United States' first written submission, paras. 63-67. 
594 United States' first written submission, paras. 68-76;  first oral statement, paras. 23-41. 
595 United States International Trade Commission, US Schedule of Commitments under the General 
Agreement on Trade in Services – With explanatory materials prepared by the U.S. International Trade Commission  (hereinafter "USITC Document"), dated May 1997. 
596 United States' first written submission, para. 66 and footnote 90;  United States' reply to Panel 
question No. 2;  United States' sec ond oral statement, paras. 7-9. 
597 United States' second oral statement, paras. 10-11. 
598 United States' second written submission, para. 15. 
599 US Schedule, pp. 71-72 (extract). WT/DS285/R 
Page 146  
 
Sector or sub-sector Limita tions on market access Limitations on national treatment
 
10. RECREATIONAL, CULTURAL, & SPORTING 
SERVICES    
A. ENTERTAINMENT 
SERVICES (INCLUDING 
THEATRE, LIVE BANDS AND 
CIRCUS SERVICES)   1) None 
  2) None 
  3) None 
  4) Unbound, except as indicated  in the horizontal section
   1) None 
  2) None 
  3) None 
  4) None 
B. NEWS AGENCY SERVICES    [...]   [...] 
C LIBRARIES, ARCHIVES, 
MUSEUMS AND OTHER CULTURAL SERVICES 
   [...]   [...] 
D. OTHER RECREATIONAL 
SERVICES (except sporting)   1) None 
  2) None 
  3) The number of 
concessions available for commercial operations in federal, 
state and local facilities is limited 
  4) Unbound, except as indicated in the horizontal section 
   1) None 
  2) None 
  3) None 
  
 
  4) None 
 
6.44 Considering that, pursuant to Article XX:3 of  the GATS, schedules of specific commitments 
form an integral part of the GATS, the rules of  interpretation that apply with respect to GATS 
schedules are the same as those applicable to the GA TS itself.  In this dispute, all parties and third 
parties agree that customary rules of treaty interpreta tion are applicable to the interpretation of the US 
Schedule.  Moreover, in EC – Computer Equipment , the Appellate Body set out the interpretative 
rules regarding tariff concessions under the GATT 1994: 
"Tariff concessions provided for in a Member 's Schedule – the interpretation of which 
is at issue here – are reciprocal and result from a mutually-advantageous negotiation between importing and exporting Members.  A Schedule is made an integral part of 
the GATT 1994 by Article II:7 of the GATT 1994.  Therefore, the concessions 
provided for in that Schedule are part of the terms of the treaty.  As such, the only 
rules which may be applied in interpreting the meaning of a concession are the 
general rules of treaty interpreta tion set out in the Vienna Convention. " (emphasis 
added)
600 
6.45 This jurisprudence is relevant, mutatis mutandis , in respect of the GATS Schedules.601  
Therefore, the content of the US Schedule should be considered as treaty language and, pursuant to 
                                                      
600 Appellate Body Report on EC – Computer Equipment , para. 84.  The Appellate Body confirmed this 
finding in EC – Poultry , para. 81 and Canada – Dairy , para. 131.  The Panel notes that the Vienna Convention 
was also used to interpret government procurement schedules.  In Korea – Procurement  (para. 7.9), the panel, 
noting relevant Appellate Body juri sprudence and the fact that, accordi ng to Article XXIV:12 of the GPA, 
"Notes, Appendices and Annexes to [the GPA] form an in tegral part thereof" referred to "customary rules of 
interpretation of public international law as summarized in the Vienna Convention in order to interpret" the 
GPA schedules of the party complained against.   
601 In this respect, we recall that in its Report on EC – Bananas III , the Appellate Body stated that, in 
agricultural schedules, a Member "may yield rights and gr ant benefits, but it cannot diminish obligations", thus 
confirming the findings contained in the Panel Report on US – Sugar Waiver with respect to GATT tariff  WT/DS285/R 
 Page 147 
 
 
Article 3.2 of the DSU, should be interpreted in light  of the general rules of treaty interpretation set 
out in the Vienna Convention, in particular Articles 31, 32 and 33.602 
6.46 Pursuant to Article 31 of the Vienna Conventio n, the US Schedule must be interpreted in 
good faith in accordance with the ordinary meaning to be given to the terms of the Schedule when 
read in their context and in light of the object and purpose of the GATS and the WTO Agreement.603  
Of particular relevance in the present dispute is the principle of "effective treaty interpretation"604, 
which derives from the requirement that treaties be interpreted in good faith, and whereby all terms of 
a treaty (including in the present dispute the term s of the US Schedule) should be given a meaning 
(see paragraph 6.49 below). 
6.47 The Panel will thus start by examining the ordina ry meaning of various key terms used in the 
US Schedule.  However, dictionary definitions are generally not conclusive a nd the Panel will have to 
examine the context of the US Schedule.  In th is regard, the Panel will examine whether document 
W/120 and the 1993 Scheduling Guidelines:  (i) are part of the context within the meaning of Article 31:2 of the Vienna Convention, and, as such , should be used to assess the legal context within 
which the ordinary meaning of the terms of the US Schedule must be determined;  or (ii) whether, 
rather, they are part of the preparatory work of the GATS or the circumstances of its conclusion, in 
which case they can only be used as supplementary  means of interpretation under Article 32 of the 
Vienna Convention.  The Panel will address the releva nce of other Members' practice with regard to 
their GATS schedules, in the interpretation of the US Schedule.  For the same purpose, it will also 
examine the practice of the United States as reflected in its Schedule.  Finally, the Panel will consider 
the object and purpose of the GATS. 
6.48 In the second instance, pursuant to Article 32 of  the Vienna Convention, the Panel will resort 
to supplementary means of interpretation, incl uding the history of negotiations, to confirm the 
meaning resulting from the application of Article 31.  Under Article 32, the Panel will look at various 
instruments comprising the preparatory work of the GATS and the US Schedule.  
(b) Application of the general rules of treaty interpretation to this case 
(i) Effective interpretation 
6.49 The requirement that a treaty be interprete d in "good faith" can be correlated with the 
principle of "effective treaty interpretation", accordin g to which all terms of a treaty must be given a 
                                                                                                                                                                     
schedules .  We see no reason why this principle should not apply to GATS schedules as well.  We believe, 
therefore, that, although se rvices schedules are considered as treat y provisions for the purpose of their 
interpretation, they should comply with  the main provisions of the GATS.   
602 The text of Articles 31 and 32 of the Vienna Convention is reproduced in para. 6.10 of this Report. 
603 The Panel notes that the Appellate Body has established a sequence concerning the consideration of 
elements contained in Article 31 of the Vienna Convention.   The Appellate Body stated:  "[a] treaty interpreter 
must begin with, and focus upon, the text of the particular provision to be interpreted.  It is in the words 
constituting that provision, read in their context, that the object and purpose of the states parties to the treaty 
must first be sought.  Where the meaning imparted by the text itself is equivocal or inconclusive, or where 
confirmation of the correctness of the reading of the text it self is desired, light from the object and purpose of 
the treaty as a whole may usefully be sought".  See Appellate Body Report on US – Shrimp , para.  114.  See also 
Panel Reports on US – Section 301 Trade Act , para. 7.22;  India – Patents (US) , para. 7.18;  US – Underwear , 
para. 7.18;  Appellate Body Report on Argentina – Footwear (EC) , para. 91. 
604 See Appellate Body Report on US – Gasoline , p. 23.  See also the Appellate Body Reports on Japan 
– Alcoholic Beverages II , p. 12, US – Underwear , p. 16, Argentina – Footwear (EC) , paras. 81 and 95, Korea – 
Dairy , para. 81, US – Section 211 Appropriations Act , para. 338 and US – Offset Act (Byrd Amendment) , 
para. 271. WT/DS285/R 
Page 148  
 
meaning.  We also note that "the principle of good  faith in the process of in terpretation underlies the 
concept that interpretation should not lead to a r esult which is manifestly absurd or unreasonable".
605   
6.50 Good faith is a core principle of interpretati on of the WTO Agreement.  On several occasions, 
the Appellate Body has emphasized the importance of the principle of effectiveness whereby "an 
interpreter is not free to adopt a reading that woul d result in reducing whole clauses or paragraphs of 
the treaty to redundancy or inutility".606  The Appellate Body has also stressed the importance of this 
principle in the interpretation of agriculture schedules.607   
6.51 Since, as indicated above, the United Stat es undertook a full commitment with respect to 
market access and national treatment under sub-sector 10.D, the terms Other Recreational Services 
(except sporting ), and the commitment thereof, must have  a meaning.  We need, therefore, to 
determine the meaning of these terms and, thereby, the scope of the US commitments in question.  
6.52 In EC – Computer Equipment , the Appellate Body stated that: 
"The fact that Member's Schedules are an  integral part of the GATT 1994 indicates 
that, while each Schedule represents the tariff commitments made by one Member, 
they represent a common agreement among all Members."608 
6.53 The Panel is of the view that this finding is equally relevant for GATS schedules.  The 
primary purpose of treaty interpretation is to identify the common  intention of the parties.  The Vienna 
Convention rules have been devel oped to help in assessing in objective terms what was or what could 
have been the common intention of the parties to a treaty.  The Panel will thus proceed to determine 
the common  intention of the parties concerning the US Sc hedule, and, more particularly, with respect 
to sector 10 ( Recreational, Cultural & Sporting Services ) of that Schedule. 
(ii) Ordinary meaning of the term 
6.54 According to the United States, the ordinary me aning of "sporting" includes "gambling" and, 
thus, confirms that the United States has made  no commitments for gambling and betting services in 
sub-sector 10.D.609  Antigua, Canada and the European Communities disagree with this 
interpretation.610   
6.55 The full definition of "sporting" (adj.) contained in the Shorter Oxford English Dictionary  
(1993 edition), reads as follows:   
                                                      
605 Sinclair, The Vienna Convention on the Law of Treaties , Manchester University Press, 2nd edition, 
1984, p. 120.  Under Article 31.3(c) of the Vienna Convention, the Panel could also examine whether "any other relevant rules of international law" could be applicab le in the interpretation of the terms used in the US 
Schedule.  This could, for instance, lead the panel to examine the US Schedule in light of the effective treaty 
interpretation principle.  The Panel will, however, refer to  the effective treaty interpretation principle pursuant to 
the first sentence of Article 31.  The Panel will also exam ine other principles of interpretation, as supplementary 
means of interpretation, pursuant to Article 32 of the Vienna Convention. 
606 Appellate Body Report on US – Gasoline , p. 23.  See also the Appellate Body Reports on Japan – 
Alcoholic Beverages II , p. 12, US – Underwear , p. 16, Argentina – Footwear (EC) , paras. 81 and 95, Korea – 
Dairy , para. 81, US – Section 211 Appropriations Act , para. 338 and US – Offset Act (Byrd Amendment) , 
para. 271. 
607 Appellate Body Report on Canada – Dairy , para. 135. 
608 Appellate Body Report on EC – Computer Equipment , para. 109. 
609 United States' first written submission, para. 71. 
610 Antigua's first oral statement, para. 30;  Canada's written submission, para. 23 and footnote 30;  
European Communities' written submission, paras. 26-33.  WT/DS285/R 
 Page 149 
 
 
"1a Sportive; playful. rare. b  Engaged in sport or play.  c  Of a plant etc.: tending to 
produce abnormal varieties or sports.  2a  Interested in or concerned in sport.  
b Designating an inferior sportsman or a person interested in sport from purely 
mercenary motives. Now esp. pertaining to or interested in betting or gambling. 
Chiefly in sporting man .  c sporting girl, woman , a prostitute, a promiscuous woman  
N. Amer.   3 Orig., providing good sport or entert ainment.  Later, characterized by 
sportsmanlike conduct;  fa ir-minded, generous."611 
6.56 Other dictionary definitions of "sporting" read: 
"1 a:  of, relating to, used, or suitable for sport b:  marked by or calling for 
sportsmanship c:  involving such risk as sports contender may expect to take or 
encounter (a sporting chance) 2:  of or relating to dissipation and especially 
gambling"  3:  tending to mutate freely."612 
"1 Engaged in sport of play. b Sportive;  playful. c Of plants, etc.  2.  a Interested in, 
accustomed to take part in, field sports or similar amusements.  b.  Esp. sporting man :  
now used to denote a sportsman of an inferior  type or one who is interested in sport 
for purely mercenary motives."613 
"1. of, relating to, suitable for, in, or engaged in sports:  a sporting event, sporting 
goods, sporting dogs.  2  characteristics of a sportsman;  fair or obliging:  That was 
very sporting of him.  3.  of or relating to gambling, esp. on sports."614 
"sporting adj 1 belonging, referring or relating to sport • Gun dogs are classed as 
sporting dogs . 2 said of someone, their behaviour, attitude, nature, etc: characterized 
by fairness, generosity, etc • It was sporting of him to lend me the car . 3 keen or 
willing to gamble or take a risk • I'm not a sporting man, but I like a bet on the Grand 
National . sportingly  adverb."615 
"1. Used in or appropriate for sports: sporting goods.  2. Characterized by 
sportsmanship. 3. Of or associated with gambling."616 
6.57 The Penguin Pocket English Dictionary  (1988) and the New Oxford Thesaurus of English  do 
not refer to "gambling" as a possible meaning of "sporting".  Similarly, the New Roget's Thesaurus  
(1978) does not refer to gambling/wagering as possibl e synonyms for "sporting" (and vice-versa).   
6.58 The Panel notes that the United States quoted the following definitions:617 
1 b:  suitable for or characteristic of a sportsman:  marked by or calling for 
sportsmanship (a ~ solution of the problem) c: involving such risk as a sports 
contender may reasonably take  or expect to encounter (a ~ chance of success) 2 a:  of, 
                                                      
611 The Shorter Oxford English Dictionary , 1993 (original emphasis). 
612 Merriam-Webster Dictionary Online , found at http://www.m-w.com/cgi-bin/dictionary, vistied on 
11 November 2003. 
613 The Oxford English Dictionary , vol. X, (1938).  The Supplement to the Oxford English Dictionary , 
Vol. IV (1986) states , with respect to sporting man :  "[A]lso used in other collocations referring to low gaming 
and betting." 
614 Collier's Dictionary , 1977. 
615 Chambers Online Reference , at http://.chambersharrap.co.uk/cham bers/chref/chref.py/main, visited 
on 14 November 2003. 
616 The American Heritage Dictionary , Online edition, at http://www.bartleby.com, visited on 
14 November 2003. 
617 United States' reply to Panel question No. 8. WT/DS285/R 
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relating to, or preoccupied with dissipation and esp. gambling; often; FAST 
FLASHY (~  gents and their ladies)   b: engaged or used in prostitution  3: lending to 
produce sports usu, with exceptional frequency (a ~ strain of evening primrose).
618 
1. engaging in, disposed to, or interested in open-air or athletic sports; a rugged, 
sporting man.  2. concerned with or suitable for such sports; sporting equipment. 3. 
sportsmanlike.  4.  interested in or connected with sports or pursuits involving betting 
or gambling the sporting life of Las Vegas .  5. involving or inducing the taking of 
risk, as in a sport (1580-1600); SPORT + -ING').619 
1. Appropriate for or used in sports.  2. Marked by sportsmanship.  3. Of or having to 
do with gambling.620 
1. used in sports :  relating to or used in sports activities  • sporting dogs   2. fair :  in 
keeping with the principles of fair comp etition, respect for other competitors, and 
personal integrity  3. GAMBLING  of gambling : relating to gambling, or taking an 
interest in gambling  4. risking:  willing to take a risk.621 
6.59 The word "sporting" encompasse s various definitions, relati ng to different activities or 
characteristics (sports, gambling, prostitution, plan t biology).  Some dictionary definitions of 
"sporting", when referring to gambling and bett ing activities, appear to convey a pejorative 
connotation ("of or relating to di ssipation and especially gambling"622).  Moreover, the word 
"sporting", when defined to encompass gambling, is  used mainly to qualify a person ("Chiefly in 
sporting man", see above Shorter Oxford English Dictionary ) interested in betting, and thus, may not 
be the most appropriate word for describing services activities.  Antigua and the European 
Communities note that, considering that the same  dictionary defines a "sporting woman" as a 
prostitute, this raises the question of whether the word "sporting", under the approach suggested by 
the United States, would also encompass prostitution.623  Several dictionary definitions quoted above 
suggest that gambling activities encompassed unde r "sporting" are essentially those relating to 
sporting events;  hence, it remains unclear whethe r, by excluding "sporting", the United States 
excluded all activities involving the placing of be ts and wagers like, among other things, casino-
related activities and lotteries. 
6.60 Moreover, the words "sportifs"624 and "deportivos"625 respectively French and Spanish 
translations of "sporting", do not cover gambling-related activities.  
6.61 On the basis of the various dictionary defi nitions quoted above, including in French and 
Spanish, we find that the ordinary  meaning of "sporting" does not include gambling. 
                                                      
618 Webster's Third New International Dictionary , 1986. 
619 The Random House Dictionary of the English Language , 2nd ed., 1987. 
620 Webster's II New Riverside University Dictionary , 1988. 
621 Encarta World English Dictionary , available at http://encarta.msn.com/dictionary_/sporting.html, 
2004. 
622 Merriam-Webster Dictionary Online , op. cit., footnote 612. 
623 Antigua's second oral statement, para. 27;  European Communities' written submission, para. 30. 
624 "Sportif" is defined as follows:  "adj.  [...]  1.  Pr opre ou relatif au sport, aux différents sports.  [...]  
Qui a un caractère de sport, de compétition (et non de simple  exercice).  [...]  Mouvementé , tumultueux.  [...]  2.  
Qui pratique, qui aime le sport.  [...] Qui atteste la pr atique du sport.  [...]  Qui respecte l'esprit du sport, 
manifeste de la sportivité.  [...]."  Le Nouveau Petit Robert – Dictionnaire alphabétique et analogique de la 
langue française ,  Dictionnaires Le Robert, 2002. 
625 "Deportivo" is defined as follows:  "adj.  Perteneciente o relativo al deporte.  2.  Que sirve o se 
utiliza para practicar un deporte.  3.  Ajustado a normas de corrección semejantes a las que deben observarse en 
deporte.  4.  Dicho de la ropa y de la forma de vestir:  Cómoda e informal.  [...]  5.  m. automóvil deportivo.  
[...]".  Diccionario de la Lengua Española , Real Academia Española, 22nd ed, 2001.  WT/DS285/R 
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6.62 The Panel turns now to Antigua's argument that the ordinary meaning of the words "other 
recreational services" (sub-sector 10.D of the US Schedule) or "entertainment services" (sub-sector 10.A of the US Schedule) encompass "gambling and betting services".  According to the United 
States, the ordinary meaning of these words does not encompass gambling activities.  The  Shorter 
Oxford English Dictionary  defines "entertainment" and "recreational", respectively, as:  
"The action of occupying a person's attention agreeably;  amusement.  b A thing 
which entertains or amuses someone, esp. a public performance or exhibition 
designated to entertain people."
626  
"Of or pertaining to recreation;  used for or as a form of recreation;  concerned with 
recreation".  The word "recreation" is defined as:  "[T]he action of recreating (oneself 
or another), or fact of being recreated, by some pleasant occupation, pastime or 
amusement".627   
6.63 The Panel considers that an interpretation of th e US Schedule relying mainly on the ordinary 
meaning of the words as defined in dictionaries does not provide sufficient clarity as to the scope of 
the sector/sub-sector concerned and leaves many in terpretive questions open.  This problem is 
particularly acute in respect of sector 10, where words such as "recreational" and "entertainment" 
could cover virtually the same types of services acti vities.  In other words, the ordinary meaning of 
"entertainment" and "recreational" does not ensure the mutual exclusiveness628 of the sub-sectoral 
headings, which is a prerequisite for a classification system.629 
6.64 This latter problem is exemplified by the res ponse given by the United States to a question 
posed by the Panel.630  The United States indicated, with resp ect to the scope of its commitment under 
sub-sector 10.D, that an interpreter could find , consistently with customary rules of treaty 
interpretation, that:   
"'Other recreational services (except sporting)' (10.D) includes services that fall 
squarely within the plain meaning of 'recr eation' and are distinguishable from either 
'sporting' or 'entertainment.'  Such activities could include, inter alia,  the operation of 
such recreational facilities as marinas, beaches, and parks, as well as the organization 
and/or facilitation of non-sporting recreational activities."   
'Entertainment services' (10.A) includes ser vices that fall squarely within the plain 
meaning of 'entertainment' and are distinguishable from either 'sporting' or 'recreation'.  Such activities could include, inter alia,  services consisting of the 
operation of entertainment facilities, such as theaters, dance halls, music halls, and 
                                                      
626 The Shorter Oxford English Dictionary , 2002 (5th ed.). 
627 Ibid. 
628 The Panel notes that the introduction to the CPC Prov., for instance, states that "[T]he CPC is a 
system of categories covering both goods and services that is both exhaustive and mutually exclusive."  See 
Provisional Central Product Classification, Statistical Papers, Series M No. 77, United Nations (1991), p. 7 
(emphasis added). 
629 An interpretation based mainly on the ordinary meaning, without recourse to the CPC or any sui 
generis  definition, would raise various questions, such as:  what would be covered by "entertainment services" 
(10.A), in addition to theatre, live bands and circuses?  Wh at would be precisely the "o ther cultural services" in 
10.C?  How and where to draw the "border" between 10.A and 10.C?  What is the difference between 
"entertainment" (10.A) and "recreational" (10.D) as these words are largely synonymous?  For instance, where 
would discotheques, amusement parks, services provided by composers and sculptors, zoos be categorised under the five items of sector 10?  How would a clear separation be ensured between sector 10 and other sectors/sub-
sectors of W/120, such as audiovisual services? 
630 Panel question No. 7. WT/DS285/R 
Page 152  
 
other performing arts venues; and the or ganization and/or facilitation of such 
entertainment activities."
631 
6.65 In view of the ordinary meaning of the words "recreational", "entertainment" and "sporting", 
the Panel fails to understand the United States' clai m that the operation of facilities such as marinas, 
beaches and parks "fall squarely within the plain me aning" of "recreation" and are "distinguishable" 
from "entertainment".  Similarly, it is not clear why theatres, dance halls, music halls, etc. "fall 
squarely within the plain meaning of 'entertainme nt'" and are "distinguishable" from "recreation".  In 
fact, it seems that the words "entertainment" and "recreation" are largely synonymous and could be used interchangeably.   
6.66 Moreover, in the Panel's vi ew, gambling and betting have, a priori , the characteristics of 
being entertaining or amusing, or of being used as a form of recreation.  The National Gambling 
Impact Study Commission (NGISC) states that "[t]oday  the vast majority of Americans [...] gamble 
recreationally";
632  the US National Research Council states that "[p]athological gambling differs from 
the recreational or social gambling of most adults, who view it as a form of entertainment and wager only small amounts".
633  Therefore, the Panel finds it difficult to assert, as the United States does, that 
"[T]o the extent that other services fall within sector  10 but do not fall within sub-sector 10.A to 10.D, 
those services reside by default in sector 10.E, 'other'."634 
6.67 On the basis of these considerations, the Panel concludes that the ordinary meaning of the 
words "Other recreational services (except sporting)" and "entertainment services" leaves a number of questions open and does not allow it to reach a definitive conclusion on whether or not the US 
Schedule includes specific commitments on "gambling and betting services" in sector 10 
(Recreational, cultural and sporting services).  The Pa nel also notes the Appellate Body's view that 
dictionary definitions do not necessarily provide  a final answer and "leave many interpretive 
questions open".
635  In another dispute, the Appellate Body  recalled that "dictionaries are important 
guides to, not dispositive statements of, definitions  of words appearing in agreements and legal 
documents".636   
6.68 The Panel needs, therefore, to continue its analysis pursuant to Article 31 of the Vienna 
Convention which stipulates, inter alia , that the ordinary meaning of the terms of the treaty must be 
examined in their context and in the light of the object and purpose of the treaty.  
(iii) ...  ordinary meaning ... in light of the context ...    
6.69 According to Article 31:2 of the Vienna Convention, the "context" comprises:  
"[I]n addition to the text, including its preamble and annexes:  
(a)  any agreement relating to the treaty which was made between all 
the parties in connexion with the conclusion of the treaty;   
                                                      
631 United States' reply to Panel question No. 7. 
632 National Gambling Impact Study Commission Final Report  (hereinafter "NGISC Final Report"), 
18 June 1999, p. 1-1. 
633 Commission on the Social and Economic Impact of Pathological Gambling, Committee on Law and 
Justice, Commission on Behavioral and Social Sciences and Education, National Research Council, 
Pathological Gambling:  a Critical Review , (1999), p. 1. 
634 United States' reply to Panel question No. 7. 
635 Appellate Body Reports on Canada – Aircraft , para. 153 and in EC – Asbestos , para. 92. 
636 Appellate Body Report on US – Offset Act (Byrd Amendment) , para. 248.  WT/DS285/R 
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(b)  any instrument which was made by one or more parties in connexion with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty." 
6.70 Furthermore, Article 31:3 stipulates that "[t]here  shall be taken into account, together with the 
context [...] any subsequent agreemen t between the parties [...] or [..]  any subsequent practice in the 
application of the treaty [...]". 
6.71 Parties and third parties refer to W/120 and the 1993 Scheduling Guidelines as being relevant 
for the interpretation of the US Schedule.  However,  they disagree as to whether these two documents:  
(i) belong to the "context", within the meaning of Artic le 31:2(a) of the Vienna Convention;  (ii) are to 
be examined as a subsequent agreement or are ev idence of the subsequent practice of Members, 
pursuant to Article 31:3(a) or (b); or (iii) are "supplementary means of interpretation" within the 
meaning of Article 32.  The United States also argu es that the proper context for interpreting the US 
Schedule includes schedules of other Members.  Fina lly, the context for the interpretation of US 
specific commitments includes the US Schedule and its structure.  The Pa nel will examine these 
various elements in turn. 
1993 Scheduling Guidelines and W/120 as part of the context 
6.72 The Panel will start by examining whether W/120 and the 1993 Scheduling Guidelines belong 
to the context of the US Schedule within the meani ng of Article 31:2(a) of the Vienna Convention.   
6.73 The Appellate Body found that, when interpreting GATT tariff schedules, the Harmonized 
System ("HS") and its Explanatory Notes  should be taken into account:   
"[W]e are puzzled by the fact that the Panel,  in its effort to interpret the terms of 
Schedule LXXX, did not consider the Harmonized System  and its Explanatory Notes .  
We note that during the Uruguay Round negotiations, both the European Communities and the United States were parties to the Harmonized System .  
Furthermore, it appears undisputed that the Uruguay Round tariff negotiations were 
held on the basis of the Harmonized System's  nomenclature and that requests for, and 
offers of, concessions were normally made in terms of this nomenclature."
637 
6.74 The Panel also notes the US argument that "Harmonized System numbers were an explicit 
and integral part of the schedule at issue in EC – Computer Equipment , while it is undisputed that the 
US Schedule makes no reference to the CPC".638  In EC – Computer Equipment  both the European 
Communities and the United States were parties to the HS, i.e. there was no controversy as to the 
relevance of the HS, whereas, in this dispute, ther e is some controversy as to the relevance – or at 
least part of it – of W/120, in particular with respect to CPC references.   
6.75 So, while there are undoubtedly differences betw een tariffs and services schedules, it is our 
view that the Appellate Body's reasoning can be transposed in the context of GATS Schedules.  
Beyond the particular circumstances of the EC – Computer Equipment  dispute, there is a more general 
principle which we can discern in the Appellate Bo dy's findings which is that documents used as a 
"basis" for conducting requests – offers during a mark et access negotiations – should be taken into 
account for interpreting schedules.  This is the case of both W/120 and the 1993 Scheduling 
Guidelines.    
6.76 In EC – Computer Equipment , the Appellate Body did not indicate whether the HS and its 
Explanatory Notes belonged to the "context", within the meaning of Article 31 of the Vienna 
                                                      
637 Appellate Body Report on EC – Computer Equipment , para. 89. 
638 United States' first oral statement, para. 31. WT/DS285/R 
Page 154  
 
Convention, or were, rather, supplementary means of interpretation according to Article 32.  In US – 
Section 110(5) Copyright Act
639, the panel made the following statem ents concerning the requirements 
for an instrument to be part of the "context" within the meaning of Article 31:2 of the Vienna Convention: 
"The International Law Commission explains in its commentary on the final set of 
draft Articles on the law of treaties that this provision is based on the principle that a 
unilateral document cannot be regarded as fo rming part of the context unless not only 
was it made in connection with the conclusion of the treaty, but its relation to the treaty was accepted by the other parties.
640  [...] It is essential that the agreement or 
instrument should be related to the treaty.  It must be concerned with the substance of 
the treaty and clarify certain concepts in the treaty or limit its field of application.641  
It must equally be drawn up on the occasion of the conclusion of the treaty.642  Any 
agreement or instrument fulfilling these criteria will form part of the 'context' of the 
treaty and will thus not be treated as part of the preparatory works but rather as an element in the general rule of interpretation."
643 
6.77 For W/120 and the 1993 Scheduling Guidelines to be part of the context within the meaning 
of Article 31:2(a), three conditions s hould be fulfilled.  They must:  (i) "relate" to the treaty, i.e. the 
GATS;  (ii) constitute an agreement made between all the parties or an instruments made between 
some parties and accepted by the others as such;  a nd (iii) be "in connexion" with the conclusion of 
the GATS.   
6.78 With respect to the first condition, the stated  objective of the 1993 Scheduling Guidelines is 
to "explain ... how commitments should be set out  in schedules in order to achieve precision and 
clarity.  ... a common format for schedules as well as standardization of the terms used in schedules 
are necessary to ensure comparable and unambiguous commitments."644  Members felt the need to 
complement the GATS (Article XX) to ensure  that GATS schedules would "speak" a common 
language.  Clearly, GATS schedules cannot be unders tood without reference to the 1993 Scheduling 
Guidelines.  For instance, basic terms such as "None", Unbound", and "Unbound*", which are used in 
all schedules, do not appear in the GATS itself;  thus , they make sense only with reference to the 1993 
Scheduling Guidelines.  Also, the very form at of GATS schedules was established in the 
Guidelines.645  Both the 1993 Scheduling Guidelines and W/ 120 are "concerned with the substance of 
the treaty and clarify certain concepts in th e treaty or limit its field of application." 
                                                      
639 Panel Report on US – Section 110(5) Copyright Act , para. 6.45. 
640 (original footnote ) Sinclair, The Vienna Convention on  the Law of Treaties , Manchester University 
Press, 2nd edition, 1984, p. 129. 
641 (original footnote ) Yasseen, L'interprétation des traités d'aprés la Convention de Vienne sur le Droit 
des Traités, op.cit., p. 37;  cited by Sinclair, op.cit., p.129. 
642 (original footnote ) "Il y a ici une certaine notion de contemporanéité, l'un ou l'autre peut être 
concomitant à cette conclusion, mais il peut la précéder ou  la suivre sans s'en éloigner trop.  Cette condition est 
justifée par l'idée même du contexte."  S ee:  Yasseen, op.cit., para. 16, p. 38. 
643 (original footnote ) Sinclair, op. cit. 129.  Sinclair mentions the example of the Council of Europe, 
where governmental experts charged with the task of negotiating and formulating an international convention of 
a particular topic, draw up, in parallel with the text of  the convention, an explanatory report which sets out the 
framework within which and the background against which the convention has been drawn up, and which then 
goes on to furnish an Article by Article commentary on the text.  The explanatory report is agreed upon 
unanimously by the governmental experts responsible for drawing up the text of the convention and it is adopted simultaneously with the text of the convention. 
644 1993 Scheduling Guidelines, para. 1. 
645 1993 Scheduling Guidelines, p. 12.  WT/DS285/R 
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6.79 All this suggests that, although they are not an authoritative interpretation of the GATS646, the 
1993 Scheduling Guidelines are, nevertheless, inextr icably linked to the GATS itself.  As suggested 
by the European Communities, it is indubitable that the 1993 Scheduling Guidelines and W/120 assisted Members in the preparation of their schedules.  The 1993 Scheduling Guidelines provide 
indications as to how Members collectively unders tand their GATS obligations in relation to their 
specific commitments.  In that sense,  we agree that their overall objective must have been shared by 
negotiators.
647   
6.80 Although both W/120 and the 1993 Scheduling Gu idelines were "technically" drafted by the 
Secretariat – this was arguably the most practical a nd efficient way to work on such a matter – they 
can be considered "agreement[s] ... made between all [Members]" or an "instrument[s] ... made by one 
or more [Members]" but accepted by all of them as su ch within the meaning of Article 31:2(a) and (b) 
of the Vienna Convention.  In this regard, it may be recalled that the two documents were prepared by 
the – then – GATT Secretariat, at the behest of th e Uruguay Round participants.  The participants can 
thus be considered to be the "int ellectual" authors of the documents.648  Besides, both documents were 
the object of a series of formal and informal cons ultations during which Members had the opportunity 
to amend them and to include changes.  Both were  circulated as formal "green band" documents with 
the agreement of the participants.649   
6.81 Finally, both W/120 and the 1993 Scheduling Guidelines are "in connexion" with the GATS.  
Both documents were drafted in pa rallel with the GATS itself, with the stated purpose of being used 
as "guides" for scheduling sp ecific commitments under the GA TS and for the subsequent 
interpretation of Members' schedules.  In that sense,  they can be considered to have been "drawn up 
on the occasion of the conclusion of the treaty".650  As to W/120, it was used by most WTO Members 
during the Uruguay Round to establish their schedules of specific commitments.651  As indicated by 
Antigua and Canada, W/120 is referred to in Article 22.3(f) of the DSU652 for the purpose of defining 
                                                      
646 Paragraph 1 of the 1993 Scheduling Guidelines states that "the answers [to questions that might 
occur to persons responsible for scheduling commitments] should not be considered as an authoritative legal 
interpretation of the GATS". 
647 European Communities' written submission, para. 68. 
648 At the 1988 Montreal Ministerial Conference, Mini sters agreed that future  work in the services 
negotiations should provide for the "compilation by the s ecretariat of a reference list of sectors by February 
1989.  This process could be assisted by submissions by participants" (MTN.TNC/7(MIN), Part II).  The 1993 
Scheduling Guidelines have been prepared by the Secretariat "in response to requests by participants" 
(MTN.GNS/W/164, footnote 1). 
649 In various instances, the 1993 Scheduling Guidelines  are referred to as the "agreed" Guidelines.  
See, for instance, informal Paper for the Group of Negotiations on Services, Verification of Schedules of 
Commitments and MFN Exemptions  – Opening Statement , 10 February 1994, para. 2 (emphasis added) and EC 
– Banana III , para. 7.289.  By contrast, the Explanatory Note  on Listing of MFN Exemptions , which was drafted 
and discussed at the same time, has remained an in formal document because Members' agreement on it has 
never been secured (see Listing of Article II Exemptions – Explanatory Note by the Secretariat , Job No. 2061, 
15 September 1993).   
650 Sinclair, The Vienna Convention on the Law of Treaties , Manchester University Press, 2nd edition, 
1984, p. 129. 
651 The Panel notes that the huge majority of GATS schedules are based on W/120, although they do 
not explicitly state so:  they follow its structure, headings and codes, with only minor derogations for a few of 
them.  Only three schedules do not follow the general structure of W/120;  however, even in these cases, one can 
identify some "traces" of W/120, for in stance at sub-sectoral level.  Only  six schedules contain an explicit 
reference to W/120.  The Panel also notes that most Members chose to refer to CPC numbers to define the scope of their commitments:  (i) only 17 schedules adopted a non-CPC approach;  (ii) a few schedules have a "mixed" 
approach, i.e. they includ e CPC numbers for some sectors only.  The systematic use of W/120 and CPC 
references is even more striking with the 20 Members th at have acceded since the end of the Uruguay Round.  A 
survey of these schedules shows that  they are all based on W/120 and all but one used CPC references.  
652 The relevant provision reads:  "for the purpose of this paragraph [i.e. paragraph 3, referring to the 
suspension of concessions], "sector" mean s:  [...] (ii) with respect to servi ces, a principal sector as identified in WT/DS285/R 
Page 156  
 
what a services "sector" is in case of suspension of concessions.  At the time of the conclusion of the WTO Agreement, Members made reference to W/120 in  connexion with the DSU;  this lends support 
to the view that W/120 can be considered as be longing to the context within the meaning of 
Article 31:2 of the Vienna Convention.   
6.82 On this basis, both W/120 and the 1993 Scheduling Guidelines were agreed upon by 
Members with a view to using such documents, not only in the negotiation of their specific 
commitments, but as interpretative tools in the inte rpretation and application of Members' scheduled 
commitments.  As such, these documents comprise  the "context" of GATS Schedules, within the 
meaning of Article 31 of the Vienna Convention and the Panel will use them for the purpose of 
interpreting the GATS, GATS schedules and thus the US  Schedule.  In so doing, the Panel is aware 
that:  (i) the 1993 Scheduling Guidelines do not repr esent an authoritative interpretation of the GATS;  
and (ii) there was no obligation imposed on WTO Memb ers to use the W/120 and its references to the 
CPC.  Yet, these instruments must be examined, as co ntext, to determine the ordinary meaning of the 
terms used in a Member's GATS Schedule and these te rms must have a meaning.  The Panel will now 
proceed to interpret the US Schedule, in particul ar sector 10, in the context of document W/120 and 
the 1993 Scheduling Guidelines. 
Interpreting the US Schedule in the context of document W/120 and the 1993 
Scheduling Guidelines 
6.83 The US Schedule does not contain any explicit refe rence to the CPC.  We recall also that the 
United States has included under sector 10 a sub-sector, namely, sub-sector 10.D, entitled Other 
Recreational Services (except sporting) .  In light of the public international law principle of effective 
interpretation, such terms in the US Schedule must be given a meaning.  The Panel needs, thus, to 
proceed to interpret the US Schedule, in particular sub-sector 10.D, in light of the ordinary meaning of 
the terms used in the context of document W/120 and the 1993 Scheduling Guidelines . 
6.84 Paragraph 15 of the 1993 Scheduling Guidelines states that: 
"[S]chedules record, for each sector, the le gally enforceable commitments of each 
Member.  It is therefore vital that schedules be clear, precise and based on a common 
format and terminology."653   
6.85 Paragraph 16 of the 1993 Scheduling Guidelines states: 
"[T]he legal nature of a schedule as well as the need to evaluate commitments, require 
the greatest possible degree of clarity in the description of each sector and sub-sector scheduled.  In general the classification of sectors and sub-sectors should 
be based on the Secretariat's revised Services Sectoral Classification List 
[MTN.GNS/W/120].  Each sector contained in the Secretariat list is identified by the 
corresponding Central Product Classification (CPC) number.  Where it is necessary to 
refine further a sectoral classification,  this  should be done on the basis of the CPC or 
other internationally recognised classifica tion (e.g. Financial Services Annex).  The 
most recent breakdown of the CPC, includi ng explanatory notes for each sub-sector, 
is contained in the UN Provisional Central Product Classification.  […]  If a Member 
                                                                                                                                                                     
the current "Services Sectoral Cl assification List" which identifies such sectors".  A footnote to 
subparagraph (ii) indicates that "[T]he list in docume nt MTN.GNS/W/120 identifies eleven sectors" and lists 
them. 
653 Scheduling of Initial Commitments in Trade in Services:  Explanatory Note, MTN.GNS/W/164 (3 
September 1993) (hereinafter the "1993 Scheduling Guide lines"), para. 15.  The same requirement appears in 
the Guidelines for the Scheduling of Specific Commitments under the General Agreement on Trade in Services 
(GATS) , adopted by the Council for Trade in Services on 23 March 2001, S/L/92 (28 March 2001) (hereinafter 
the "2001 Scheduling Guidelines"), para. 22.  WT/DS285/R 
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wishes to use its own sub-sectoral classification or definitions it should provide concordance with the CPC in the manner indi cated in the above example.  If this is 
not possible, it should give a sufficiently de tailed definition to avoid any ambiguity as 
to the scope of the commitment."
654 
6.86 The 1993 Scheduling Guidelines are not an author itative legal interpretation of the GATS for 
various reasons.  First, they explicitly state as much.655  Second, according to Article IX:2 of the WTO 
Agreement, the Ministerial Conference and the Gene ral Council have the exclusive authority to adopt 
interpretations of WTO agreements.  However, as part of the context for the interpretation of the US 
Schedule, the 1993 Scheduling Guidelines explain the in tention of Members with regard to the nature 
and scope of the Members' GATS scheduled comm itments and how Members should and can read 
each other's Schedules. 
6.87 Paragraph 16 of the 1993 Scheduling Guide lines suggests that there was an understanding 
among Members that, in order to secure clarity a nd predictability, the classification of sectors and 
sub-sectors should be based on W/120 and the co rresponding CPC numbers.  The Panel agrees with 
the United States that no Member was forced or obliged to schedule specific commitments in 
accordance with W/120 and the CPC numbers and that the CPC was not binding on Members.  
However, as argued by the European Communities,  "departure from W/120 and CPC definitions was 
not free and unconditional and was not meant to  allow convenient ambiguity in Members' 
schedules".656  Pursuant to paragraph 16 of the 1993 Sc heduling Guidelines, a Member intending not 
to use W/120 and/or the corresponding CPC numbers ha d two options:  (i) to use its own sub-sectoral 
classification or definition and give co ncordance with the CPC;  or (ii) if this was not possible, to give 
a "sufficiently detailed definition to avoid any ambigui ty as to the scope of the commitment".  In fact, 
paragraph 16 of the 1993 Scheduling Guidelines is nothing other than the expression of a general 
requirement of transparency to ensure clarity and predictability of the specific commitments, 
expressed in the GATS preamble. 
6.88 The relevant section of W/120 is as follows: 
"SECTORS AND SUB -SECTORS     C ORRESPONDING CPC 
 
[...]  10. 
RECREATIONAL , CULTURAL AND SPORTING SERVICES  
 (other than audiovisual services) 
  
A. Entertainment services (including theatre,    9619 
 live bands and circus services)  B. News agency services      962 
 C. Libraries, archives, museums and other 
 cultural services       963 
 D. Sporting and other recreational services    964 
 
E. Other 
[...]" 
                                                      
654 Para. 16 of W/164. 
655 Para. 1 of W/164. 
656 See para. 4.32 above. WT/DS285/R 
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6.89 CPC number 964, corresponding to sub-sector 10.D ( Sporting and other recreational 
services ), is broken down as follows: 
"964 Sporting and other recreational services 
  9641 Sporting services 
  96411 Sports event promotion services 
  96412 Sports event organization services   96413 Sports facility operation services   96419 Other sporting services  
 9649 Other recreational services 
  96491 Recreation park and beach services   96492 Gambling and betting services 
   96499 Other recreational services n.e.c." 
6.90 The United States argues that "because [the United States] did not bind itself to, or reference 
or rely on, the CPC in the text of its Schedule, th e CPC definitions cannot control the interpretation of 
the US Schedule.  The question whether to tie commitments of the United States or any other Member to CPC definitions was a matter for negotiations, th e answer to which should not be imposed post hoc 
through dispute settlement [...]."
657  The Panel would like to make tw o remarks with respect to this 
statement.  First, the fact that the United States di d not bind itself to the CPC does not mean that the 
CPC is not relevant for the purpose of determining the ordinary meaning of the US Schedule, in its 
context, and in light of the object and purpose of the GA TS.  The Panel is of the view that, even if it is 
not binding, the CPC, through the context of W/120 and the Scheduling Guidelines, remains relevant 
for the interpretation of the US Schedule.   
6.91 Secondly, in this dispute, there is no question of seeking to "impose" the CPC on the United 
States, but simply to give a meaning to a US co mmitment according to the customary rules of treaty 
interpretation.  If the United States had made clear re ferences to the CPC, the interpretation of the US 
Schedule would be controlled by the CPC definitions  that would compose the ordinary meaning of the 
terms of the treaty.  This is not the case here.  Th e United States had the possibi lity to provide its own 
definitions for sub-sector 10.D.  It did not.  In the absence of any clear terms or any other clear 
indication of the meaning and scope of the US entr ies in sub-sector 10.D of its Schedule, the Vienna 
Convention  points to a series of instruments that should be  used to assist in the interpretation of the 
US Schedule.  Such instruments include W/120,  which refers to CPC definitions, and the 1993 
Scheduling Guidelines which explains the relations hip between Members' schedules, W/120 and the 
CPC.  In these findings, we do not mean to suggest that "CPC schedules" are like "non-CPC schedules".  Clearly, where "non-CPC" schedules prov ide a sufficiently detailed definition, the scope 
of the commitment should not be ambiguous, as in the present case. The Panel is obliged to give 
meaning  to a specific entry in the US Schedule, in li ght of the particular circumstances of this case.  
Moreover, the US documents that the Panel will examine pursuant to Article 32 of the Vienna 
Convention (see below) tend to confirm – rath er than contradict – this approach.  
6.92 In its decision in EC – Computer Equipment , the Appellate Body stated that: 
"[w]hile each Schedule represents the tariff commitments made by one Member, they 
represent a common agreement among all Members."
658 
                                                      
657 United States' first written submission, paras. 64-65. 
658 Appellate Body Report on EC – Computer Equipment , para. 109.  See also the similar reasoning of 
the Appellate Body in Canada – Dairy , para. 139 when dealing with the unilateral commitments made by 
Canada in its Agriculture Schedules.   WT/DS285/R 
 Page 159 
 
 
6.93 The Panel is of the view that W/120 and the 1993 Scheduling Guidelines assist in establishing 
the common agreement among WTO Members with resp ect to the content of the US Schedule.  
Where the US Schedule follows W/120 without any cl ear departure and in the absence of any specific 
definition, the United States has created an expectat ion that its commitments must be interpreted in 
the light of W/120 and the corresponding CPC numbers.  Sub-sector 10.D of the US Schedule is 
entitled Other Recreational Services (except sporting );  we understand that this 
sub-sector corresponds to CPC 964 ( Sporting and other recreational services ).  By explicitly 
excluding Sporting services , the United States has excluded the category of services corresponding to 
CPC 9641 ( Sporting services ).  Hence, what remains under sub-sector 10.D of the US Schedule is the 
CPC category 9649 ( Other recreational services ), which includes, inter alia , gambling  and betting 
services  (CPC 96492).  Therefore, the US Schedule, r ead in the light of paragraph 16 of the 1993 
Scheduling Guidelines, is to be understood to in clude a specific commitment on gambling and betting 
services under sub-sector 10.D ( Recreational services (except sporting) ).  
6.94 The Panel wishes to underline th at there is no suggestion that the "context" (i.e. the 1993 
Scheduling Guidelines and W/120) is a part of the text of the GATS and would, therefore, "bind" 
Members.  Thus, while the 1993 Scheduling Guid elines and W/120 do not impose any "obligations" 
on Members, nevertheless, an interpreter trying to  interpret and appreciate relevant GATS obligations 
must read them, where appropriate, in light of th e 1993 Scheduling Guidelines and W/120.  This is the 
reason why these two documents are relevant when tryi ng to give meaning to the terms used in the US 
Schedule.  In this dispute, an interpretation based  mainly – if not exclusively – on the ordinary 
meaning of the words does not ensure the clarity a nd predictability of the US specific commitments at 
stake.659 
6.95 Finally, even if the 1993 Scheduling Guidelines and W/120 were "only" preparatory work, the 
Panel's conclusions would be the sa me:  Article 32 of the Vienna Conve ntion allows a Panel to resort 
to preparatory work as supplementary means of in terpretation when the interpretation according to 
Article 31 "leaves the meaning ambiguous or obscure". 
6.96 The Panel will further discuss below other elements of evidence confirming that the United 
States led other Members to believe in good faith that, unless otherwise provided for, the ordinary meaning of the terms of the US Schedule should be  read in light of W/120, including the CPC 
references. 
Other Members' GATS Schedules as part of the context for the interpretation of the 
US Schedule 
6.97 The United States refers to other Members' schedul es as being part of the context in which the 
US Schedule must be interpreted.  The Panel c oncurs with the United States that other Members' 
schedules comprise the "context" with in the meaning of Article 31:2 of the Vienna Convention.  All 
Members' schedules are annexed to the GATS and, ac cording to Article XX:3, are "an integral part 
thereof". 
6.98 The United States does not need to invoke the f act that other Members did not use the CPC to 
justify its own choice not to refer to the CPC beca use it was entitled to do so anyway.  In that sense, 
the practice of other Members is relevant only to confirm that, as stipulated in the 1993 Scheduling 
Guidelines, Members were free to use or not to use the CPC.  If the United States wanted to rely on 
the other Members' schedules, as evidence of a "prac tice of Members" relevant in the interpretation of 
its own Schedules, it should have demonstrated th at such Members' practice was coherent and 
consistent.  We believe that th e few examples pointed to by the United States do not evidence any 
such practice by Members.  The Panel agrees with the European Communities that each of the 
commitments in other Members' schedules has to be placed in its own – different – immediate 
                                                      
659 See above at para. 6.87. WT/DS285/R 
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context, which is the schedule to which it belongs.
660  Each schedule has its own intrinsic logic, which 
is different from the US Schedule.  Moreover, no Member could invoke the fact that other "non-CPC" 
Members did not provide "sufficiently detailed defin itions" to justify ambiguitie s in its own schedule. 
6.99 Moreover, the Panel fails to see the direct rele vance of other Members'  schedules to support 
the US argument that the United States has not undertaken specific commitments on gambling and 
betting services.   
6.100  In particular, the Panel does not accept the US argument that "the United States could only 
have a commitment for gambling services if it had scheduled the 10.E residual category".  The mere fact that two Members scheduled gambling and be tting services under 10.E is not sufficient to allow 
the United States to argue that, should it have undertaken specific commitments, it would have done 
so under 10.E as well.  More than two Members seem ed to be of the view that gambling and betting 
services belong to sub-sector 10.D, and made commitmen ts, or introduced limitations with respect to 
those services.  Moreover, the reason why two Members scheduled gambling under sub-sector 10.E 
can be determined only on the basis of an examinati on of the Schedules concerned;  this is outside the 
terms of reference of this Panel. 
6.101  The United States further argues that should it have undertaken a commitment on gambling 
and betting, it would have done so under 10.E ("Other").  This appear s to be at odds with the other US 
argument that the exclusion of "sporting" under sub-sector 10.D had the consequence of excluding 
gambling and betting services.
661  The Panel takes note of the US response to a question posed by the 
Panel,662 but is nevertheless of the view that the two US  arguments contradict the principle that entries 
in a classification system – and in a Schedule – s hould be mutually exclusive.  Further, these 
arguments are in contradiction with the USITC Document, which indicates that sub-sector 10.D 
corresponds to CPC 964 (which includes gambling) and that there is "no corresponding CPC" for 
sub-sector 10.E (see below paragraphs 6.122 et seq .).  Moreover, this argument is also difficult to 
reconcile with the cover-notes to the US dr aft Schedules during the Uruguay Round (see below 
paragraphs 6.115 et seq .). 
6.102  On the basis of these considerations, the Panel is of the view that an examination of the 
schedules of other Members does not allow it to conclude that, should the United States have 
undertaken specific commitments on gambling and betting services, it would have done so under 
sub-sector 10.E.  The US Schedule, interpreted in the context of the schedules of other Members, does 
not contradict our previous conclusion that th e US Schedule, includes a specific commitment on 
gambling and betting services under sub-sector 10.D ( Recreational services (except sporting) ). 
The US Schedule as context for the interpretation of sub-sector 10.D 
6.103  The Panel agrees with the United States th at, under the GATS, Members can "define their 
offers (and their ensuing obligations ) in terms which suits their needs"663 (the 1993 Scheduling 
Guidelines do not say otherwise).  The Panel notes th at the US Schedule follows closely the structure 
of W/120, in particular as far as sector 10 is concerned.  The numbering used by the United States in 
its Schedule for all sectors and sub-sectors corresponds to that of W/120.  But for a few minor drafting 
changes (omission of the word "services", for inst ance), the sectoral and sub-sectoral headings are 
similar to those contained in W/120.  The section on Recreational Services  in the US Schedule is 
placed under number 10, as in W/120. The first three sub-sectors (A to C) on which the United States 
has undertaken commitments have the same denomi nations as in W/120 and are placed in the same 
                                                      
660 European Communities' written submission, paras. 44-60. 
661 United States' first written submission, paras. 75 and 71. 
662 In particular, the United States' reply to Panel question No. 8. 
663 United States' first written submission, para. 65, referring to Appellate Body Report on EC – 
Computer Equipment , paras. 109-110.  WT/DS285/R 
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order.  The United States entitled sub-sector 10.D Other recreational services (except sporting) , as 
compared to Sporting and other recreational services  in W/120.  Finally, the Panel also notes that the 
USITC itself states that "[t]he U.S. Schedule makes no explicit references to CPC numbers, but it corresponds closely with the GATT Secretariat's list".
664 
6.104  In a number of instances, the United States departed from W/120 and, as recommended in the 
1993 Scheduling Guidelines, clearly indicated that it was doing so.  For instance, in two cases, the 
United States did not wish to include certain elemen ts otherwise covered by W/120 and it specifically 
said so.665  Similarly, in scheduling its specific commitments on environmental services, the United 
States, while using W/120, expressly defined th e activities covered by its specific commitments.666  
With respect to "Financial Servi ces - Insurance", the US Schedule indi cates, as stipulated in paragraph 
16 of the 1993 Scheduling Guidelin es, that "commitments in this sub-sector are undertaken pursuant 
to the alternative approach to scheduling co mmitments set forth in the Understanding on 
Commitments on Financial Services".667 In scheduling specific commitm ents on hospital and other 
health care facilities, the United States expressly defined the scope of that sub-sector in its Schedule.
668   
6.105  When asked by the Panel which classification sy stem, if any, the United States had followed 
in establishing its Schedule, the United States replie d that "subject to some changes (e.g. "except 
sporting"), the United States generally followed the W/120 structure ", adding that its Schedule should 
be interpreted according to Articl es 31 and 32 of the Vienna Convention.669  The United States did not 
indicate a relevant US industry classifica tion system for interpreting its Schedule.670  In its Schedule, 
the United States has not provided any kind of defi nition for the sub-sectors listed under sector 10, 
contrary to what is recommended in the 1993 Sche duling Guidelines.  Finally, we recall that 
dictionary definitions leave a number of questions open. 
(iv) ... ordinary meaning in light of the object and purpose of the treaty 
6.106  The object and purpose of the GATS lends support to the conclusion that the ordinary 
meaning of the terms used in the US Schedule, when read in their context, is that the United States has 
undertaken specific commitments on gambling and betti ng services in sub-sector 10.D of its Schedule.  
Our conclusion derives from the need to provide clarity and precision in respect of the US entry under sub-sector 10.D ( Other recreational service s, except sporting ) and the fact that, unless otherwise 
indicated in the schedule, Members were assume d to have relied on W/120  and the corresponding 
CPC references.   
6.107  The need for clarity and precision in Members'  schedules referred to in the 1993 Scheduling 
Guidelines is consistent with the pr eamble to the GATS which stipulates, inter alia , that, in 
establishing the GATS, Members sought the expansion of trade in services "under conditions of transparency".  This requirement of transparency  is undoubtedly an object and purpose of the GATS – 
and the WTO in general – and applies equally to  GATS schedules of specific commitments.  Indeed, 
schedules of specific commitments determine, inter alia , the scope of market access and national 
                                                      
664 See the section below dealing with US practice – USITC Document , and in particular para. 6.132. 
665 With respect to "Computer and Related Services", the US Schedule contains the following entry:  
"(MTN.GNS/W/120 a) – e), except airlin e computer reservation systems)."  With respect to "Publishing", the 
following entry is made:  "(Only part of MTN.GNS/W/120 category:  'r) Printing, Publishing'."   
666 The entry "Environmental Services" is followed by note 19, which provides that "[i]n each of the 
following sub-sectors, United States' commitments are limited to the following activities: […]".   
667 US Schedule, p. 54. 
668 US Schedule, p. 117.  The entry "Hospital and Other Health Care Facilities" is followed by the 
following definition:  "Direct ownership and management  and operation by contract of such facilities on a 'for 
fee' basis". 
669 United States' reply  to Panel question No. 5 (emphasis in the original). 
670 United States' reply to Panel question No. 6. WT/DS285/R 
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treatment obligations that Members undertake under the GATS.  It is, therefore, important that schedules be readily understandable by all other WTO Members, as well as by services suppliers and consumers. 
6.108  The Appellate Body found that "the security and predictability of 'the r eciprocal and mutually 
advantageous arrangements directed to  the substantial reduction of tariffs  and other barriers to trade' is 
an object and purpose of the WTO Agreement, generally, as well as of GATT 1994."
671  T h i s  
confirms the importance of the security and predicta bility of Members' specific commitments, which 
is equally an object and purpose of the GATS. 
6.109  Finally, our conclusion is compatible with the principle of progressive liberalization as 
embodied in Article XIX of the GATS and the preamble of the GATS. 
(v) Conclusions under Article 31 of the Vienna Convention 
6.110  In its interpretation of the US Schedule in light  of Article 31 of the Vienna Convention, the 
Panel noted that dictionary defin itions of key terms in that Schedule ("entertainment", "recreational", 
and "sporting") do not exclude that gambling and betting services could be covered under sub-sector 
10.D of the US Schedule.  We also found that thes e definitions are less than conclusive.  The Panel 
then examined the terms of the US Schedule in the context of W/120 and the 1993 Scheduling 
Guidelines and found that, where the US Schedule follows W/120 without any clear departure and in 
the absence of any specific definition, there would be reason enough for Members to believe that the 
scope of sub-sector 10.D in the US Schedule corresponds to that of W/120 and the corresponding 
CPC numbers.  Thus, the Panel believes that the US Schedule, read in the light  of paragraph 16 of the 
Scheduling Guidelines, can be understood to in clude a specific commitment on gambling and betting 
services under sub-sector 10.D ( Recreational services (except sporting) ).   
6.111  CPC 96492 does not offer an explanatory note for "gambling and betting services".  However, 
for the purpose of this dispute, the Panel will pro ceed on the basis of the parameters proposed in the 
Introduction to the Report (see above Section VI.A.6).   
6.112  The Panel will now resort to Article 32 of th e Vienna Convention (supplementary means of 
interpretation), to confirm the meaning imparted to sub-sector 10.D of the US Schedule on the basis 
of its examination under Article 31. 
(vi) Supplementary means of interpretation 
6.113  In EC – Computer Equipment , the Appellate Body found it appropriate to resort to 
"supplementary means of interpretation", pursuan t to Article 32 of the Vienna Convention: 
"The application of [the] rules in Article 31 of the Vienna Convention  will usually 
allow a treaty interpreter to establish the meaning of a term [footnote omitted].  
However, if after applying Article 31 the meaning of the term remains ambiguous or 
obscure, or leads to a result which is mani festly absurd or unreasonable, Article 32 
allows a treaty interpreter to have recourse to: '... supplementary means of 
interpretation, including the preparatory work of the treaty and the circumstances of 
its conclusion'.  With regard to 'the circum stances of [the] conclusion' of a treaty, this 
permits, in appropriate cases, the examination of the historical background against which the treaty was negotiated."
672 
                                                      
671 Appellate Body Report on EC – Computer Equipment , para. 82. 
672 Appellate Body Report on EC – Computer Equipment , para. 86.  See also Appellate Body Report on 
Canada – Dairy , paras. 138-139.  WT/DS285/R 
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6.114  Under Article 32, the Panel will take into account  preparatory work.  However, Article 32 is 
not limited to preparatory work, but allows a treat y interpreter to take in to consideration other 
supplementary means of interpretation.673  The Panel will thus consider other relevant material. 
Preparatory work 
Cover-notes to US draft Schedules during the Uruguay Round 
6.115  Antigua and the European Communities referred to US Draft Final Schedules towards the end 
of the Uruguay Round.  The relevant paragraph of  the cover-note to the US Draft Final Schedule, 
dated 7 December 1993, reads as follows: 
"[E]xcept where specifically noted, the sc ope of the sectoral commitments of the 
United States corresponds to the sectoral c overage in the Secr etariat's Services 
Sectoral Classification List (MTN.GNS/W/120, dated 10 July 1991)".674 
6.116  This text also appeared in the Revised Cond itional Offer tabled by the United States on 
1 October 1993.675  The European Communities indicated that the same paragraph was included in the 
cover-note of the Schedule of the United States, tabled on 15 December 1993.676  The entire cover-
note was deleted from the US Schedule that was circulated on 15 April 1994 as GATS/SC/90.677 
6.117  This cover-note qualifies as preparatory work, as well as circumstances of the conclusion of 
the treaty, and is undoubtedly relevant as a supplem entary means of interpretation within the meaning 
of Article 32 of the Vienna Convention.   
6.118  In the Panel's view, the fact that this refere nce to W/120 was made at a crucial stage during 
the services market access negotiati ons and was contained in three su ccessive drafts cannot be ignored 
as it would have led participants to believe in good faith that the "scope" of the US commitments 
"corresponded" to the "sectoral coverage" of W/120.   The date of 15 December 1993 marked the end 
of the Uruguay Round negotiations, including the ser vices negotiations.  The only activity in the area 
of services thereafter, during the early months of 1994, was a process of verification of schedules 
                                                      
673 "Article 32 gives only examples of the principal supplementary means of interpretation.  [...]  There 
are several other means of interpretation, though it is not always easy to distinguish them from familiar legal 
techniques, often based on commonsense or grammatical rules."  Aust A., Modern Treaty Law and Practice , 
Cambridge University Press, 2000, p. 200.  See also Elias T. O., The Modern Law of Treaties , Sÿthoff 
Publishers, Leiden, 1974, p. 80 and Sir R. Jennings and Sir Arthur Watts, Oppenheim's International Law , 
Longman Publishers, Harbour, 9th ed., 1996, pp. 1275-1282. 
674 Communication from the United States of America – Draft Final Schedule of the United States of 
America Concerning Initial Commitments, MT N.GNS/W/112/Rev.3, 7 December 1993. 
675 Communication from the United States of America – Revised Conditional Offer of the United States 
of America Concerning Initial Commitments, MTN.GNS/ W/112/Rev.2, 1 October 1993.  The cover-note does 
not appear in the first and second draft schedules circ ulated by the United States.  See Communication from the 
United States of America, Conditional Offer of the Un ited States of America Concerning Initial Commitments, 
MTN.GNS/W/112, 13 November 1990. Communication from the United States of America, Revised Conditional Offer of the United States of America Concerning Initial Commitments, MTN.GNS/W/112/Rev.1, 
21 January 1992. 
676 Communication from the United States – Schedule of the United States Concerning Initial 
Commitments on Trade in Services , MTN.GNS/W/112/Rev. 4, 15 December 1993.  This document was 
circulated in paper copy only. 
677 The Panel notes that a number of draft final schedules presented betw een October and December 
1993 started with a cover-note where Members were giving some indications on the content of their schedule 
and/or the conditions attached to its circulation.  The decision to suppress these cover-notes seems to have been taken during the process of verification of schedules, which took place between Janu ary and March 1994, but, 
since this process was largely informal, it has not been possible to identify a written source confirming this 
point. WT/DS285/R 
Page 164  
 
which was not meant to modify the substantive results of the negotiations.
678  Thus, contrary to what 
is suggested by the United States679, the scope of the results of the negotiations could not be altered 
unilaterally after 15 December 1993.680 
6.119  The scope of the "sectoral coverage" in W/120 , referred to in the c over-notes, can only be 
determined when reading W/120 in its entirety, i.e. by reading the left-hand column ( Sectors and Sub-
sectors ) jointly with the right-hand column ( Corresponding CPC ).  Indeed, the left-hand column, 
which enumerates the sectoral and sub-sectoral headings , is not sufficiently informative by itself.  In 
many, if not most cases, the ordinary meaning alone of the eleven sectors and some 160 sub-sectors listed in that column cannot determine with su fficient clarity the scope of the sector or 
sub-sector concerned.  Also, the ordinary meaning is  not sufficient to ensure the mutual exclusiveness 
of the headings, which is a prerequisite for any cl assification system.  In W/120, the sectoral and sub-
sectoral headings must be read in conjunction with the CPC references indicated in the right-hand column;  these CPC references ensure that  the headings are mutually exclusive.
681 
6.120  The cover-notes indicate that the United Stat es used W/120 not only  for the "ordering"682 of 
its Schedule or for establishing its "str ucture", but also to determine the scope  of its commitments, 
except where specifically noted otherwise, even though it chose not to refer to the CPC, as it was 
indeed entitled to do under the 1993 Scheduling Guid elines.  Nevertheless, it is clear that, as the 
negotiations progressed and were finalized, the understanding of Uruguay Ro und participants with 
respect to the commitments offered by the Unite d States was that the United States had followed 
W/120.  Document W/120 in its entirety  was the benchmark instrument that Uruguay Round 
participants could rely on in good faith to assess the content of the US offer until the very end of the 
negotiations.  In EC – Computer Equipment , the Appellate Body noted, in particular that: 
"[I]t appears to be undisputed that the Uruguay Round tariff negotiations were held 
on the basis of the Harmonized System's no menclature and that requests for, and 
offers of, concessions were normally made in terms of this nomenclature.  [...]  We 
believe [...] that a proper in terpretation of [the] Schedule [...] should have included an 
examination of the Harmonized System  and its Explanatory Notes ."683 
6.121  In this dispute, the cover-notes indisputably testify that services market access negotiations 
were held on the basis of W/120 and contribut e to determining the common intention of the 
participants to the Uruguay Round negotiations with re gard to the content of the US Schedule, and, 
thus, the obligations that the United States was willing to undertake.  It can, therefore, be concluded 
                                                      
678 This process was announced in the Airgram GATT/AIR/3544, dated 14 January 1994, (Uruguay 
Round:  Group of Negotiations on Services – General Agreement on Trade in Services:  Verification of 
Schedules of Commitments and MFN Exemptions): "[a] s announced by the Chairm an of the GNS in the 
Group's meeting of 11 December 1993, and as agreed by the Group, a process of verification of schedules of 
commitments in services and of lists of MFN exemptions will be established as set out below.  It is emphasised 
that, negotiations on services having been concluded, the purpose of this process is to confirm the technical accuracy of schedules and exemption lists and not to am end their substantive conten t."  Moreover, during an 
informal meeting on 11 December 19 93, the Chairman of the GNS had stat ed that after 15 December 1993, the 
"schedules and MFN lists cannot be modified or with drawn in any way that would alter the results of the 
negotiations.  Only additional commitments could be incorporated or MFN exemptions withdrawn".  See 
Processing and Verification of Final Schedules and Exemption Lists, Statement by the Chair of the GNS on 11 
December 1993, informal document dated 12 December 199 3.  There is no reco rd of this meeting. 
679 United States' reply to Panel question No. 30. 
680 This opinion appears to be shared by the European Communities in its reply to Panel question No. 3.   
681 The Panel notes that the introduction to the CPC Prov., for instance, states  that "[t]he CPC is a 
system of categories covering both goods and services that is both exhaustive and mutually exclusive."  See 
Provisional Central Product Classification, Statistical Papers, Series M No. 77, United Nations (1991), p. 7 
(emphasis added). 
682 United States' second oral statement, para. 11 and reply to Panel question No. 3. 
683 Appellate Body Report on EC – Computer Equipment , para. 89.  WT/DS285/R 
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that the common intention of the Members, at the time the US specific commitments were negotiated, 
was that where the US Schedule visibly followed W/ 120 without any clear and explicit departure, the 
specific commitments at i ssue were to be interpreted in the light of W/120 and the CPC numbers 
associated with it.  The fact that the cover-note does not explicitly refer to the CPC does not change 
our conclusion.  In fact, the indication, containe d in three successive US draft schedules, that the 
"scope of the sectoral commitments of the Unite d States corresponds to the sectoral coverage" in 
W/120 was sufficiently clear in itself. 
Other supplementary means of interpretation 
US practice – USITC Document 
6.122  As indicated in paragraph 6.114, the Panel is of the view that Article 32 of the Vienna 
Convention is not necessarily limited to preparatory ma terial, but may allow treaty interpreters to take 
into consideration other relevant material.  A commentator indicates that the principle of acquiescence 
is one of these possible aids to interpretation:  "[i]f a party has made plain its understanding of the 
meaning of a provision, and it later applies it in that sense without objection, other parties may not be able to insist on a different interpretati on.  Article 31:3(b) might also apply".
684 
6.123  Antigua argues that the United States Intern ational Trade Commission ("USITC") itself 
indicates that sub-sector 10.D of the US Schedule corresponds to sub-sector 10.D of W/120 and CPC code 964.
685  In their responses to the Panel, Antigua , Canada, the European Communities and, to 
some extent, Mexico, argue, in essence, that the US ITC Document can be used as an interpretative 
aid, which has probative value and confirms othe r evidence (such as the 1993 Scheduling Guidelines 
or the cover-note to the US Draft Final Schedule) concerning the interpretation of the US Schedule.  
These Members also argue that the acts of the US ITC can be attributed to, and bind, the US 
government (in particular given the fact that th e USITC was formally mandated by the USTR to 
maintain the US Schedule).686   
6.124  In its reply to a question posed by the Pa nel, the United States argues that the USITC 
Document is "merely an 'explanatory' text" by an  "independent agency" which is meant to facilitate 
comparison with other documents.  Contrary to the Statement of Administrative Action ("SAA"), the 
USITC Document does not provide authoritative interp retative guidance of US law.  According to the 
United States, the USITC Document does not bind th e United States with respect to the US Schedule 
because the United States, like all Members, ca nnot unilaterally adopt multilaterally binding 
interpretations of a term of the GATS.687 
6.125  As a starting point, the Panel agrees with the Un ited States that the USITC Document is not a 
binding interpretation of the US Schedule b ecause no Member can unilaterally adopt binding 
interpretations of any WTO agreement, nor of any in ternational treaty.  However, this does not mean 
that the USITC Document must be disregarded a ltogether.  While the USITC Document cannot, on its 
own, determine the scope of the US Schedule, it is  undoubtedly one element in the body of evidence 
that the Panel can and must consider when assessi ng the common intentions of the Members for the 
purpose of interpreting the scope and the meaning of  the US Schedule.  Therefore, the Panel must 
determine the interpretative value of the USITC Document with respect to the US Schedule. 
                                                      
684 Aust A., Modern Treaty Law and Practice , Cambridge University Press, 2000, p. 200. 
685 US Schedule of Commitments under the General Agreement on Trade in Services , United States 
International Trade Commission, May 1997  (hereinafter "the USITC document"). 
686 Replies to Panel question No. 2 by Antigua, Canada, the European Communities and Mexico. 
687 United States' reply to Panel question No. 2. WT/DS285/R 
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6.126  The USITC is an agency of the US fede ral government, created by an Act of Congress.
688  It 
was given a number of powers and responsibilities under a number of federal statutes689, including the 
power to make rules and regulations.690  The USITC Document consists of "explanatory materials" 
produced by the USITC in connection with the US Sche dule.  As to the role of the USITC in relation 
to the US Schedule, the Panel notes that "[a]t th e request of the Office of the United States Trade 
Representative, the United States International Trade Commission (USITC) assumed responsibility 
for maintaining and updating, as necessary, the Unite d States' Schedule of Commitments [...] and List 
of MFN Exemptions".691  The USTR is also an agency of the US federal government, created by Act 
of Congress.692  It is given a variety of powers a nd responsibilities under a number of federal 
statutes693, including the power to make rules and regulations694, the power and responsibility for the 
conduct of all international trade negotiations, incl uding "any matter considered under the auspices of 
the World Trade Organization"695 and, in particular, to "develop (and coordinate the implementation 
of) United States policies concerning trade in services."696   
6.127  We believe that, as an agency of the United States government with specific responsibilities 
and powers, actions taken by the USITC pursuant to  those responsibilities and powers are attributable 
to the United States.   
6.128  This conclusion is supported by the International Law Commission ("ILC") Articles on the 
Responsibility for States of Internationally Wrongful Acts.697  Article 4, which is based on the 
principle of the unity of the State, defines gene rally the circumstances in which certain conduct is 
attributable to a State.698  This provision is not binding as such, but does reflect customary principles 
of international law concerning a ttribution.  As the International Law Commission points out in its 
commentary on the Articles on State Responsibility, the rule that "the State is responsible for the 
conduct of its own organs, acting in that capacity, h as long been recognised in international judicial 
decisions."699  As explained by the ILC, the term "state or gan" is to be understood in the most general 
                                                      
688 19 U.S.C. §1330. 
689 See,  e.g., 19 U.S.C. §§1331-1339;  19 U.S.C. §2151. 
690 19 U.S.C. §1335. 
691 USITC Document, p. vii. 
692 19 U.S.C. §2171(a). 
693 See,  e.g., 19 U.S.C. §§ 2171(c)-(f). 
694 19 U.S.C. §2171(e)(3). 
695 19 U.S.C. §2171(c)(1)(C). 
696 19 U.S.C. §2114c(1)(A). 
697 On 12 November 2001 the Resolution on the Responsibility of States for internationally wrongful 
acts was adopted by the general Assembly of the United Nations.  The third paragraph of this resolution stats 
that the General Assembly "takes note of the articles on responsibility of States for internationally wrongful 
acts, presented by the International Law Commission, the te xt of which is annexed to the present resolution, and 
commends them to the attention of Governments without prejudice to the question of their future adoption or 
other appropriate action."    
698 Article 4 states that: "The conduct of any State organ shall be considered an act of that 'State under 
international law, whether the organ exercises legislativ e, executive, judicial or an y other functions, whatever 
position it holds in the organization of the State, and whatever its character as an organ of the central 
government or of a territorial unit of the State.'  An organ includes any person or entity which has the status in 
accordance with the internal  law of the State."  Articles on the Responsibility for States of Internationally 
Wrongful Acts , as annexed to the UN General Assembly Resolution of  12 December 2001, A/RES/56/83. 
699 Commentaries to the draft Articles on Responsibility of States for internationally wrongful acts , 
adopted by the International Law Commission at its fifty- third session (2001), Official Records of the General 
Assembly, fifty-sixth session, Supplement No . 10 (A/56/10), chp. IV.E.2; J. Crawford,  The International Law 
Commission's Articles on State Responsibility- Introduction, Text and Commentaries , Cambridge, Cambridge 
University Press, 2002, commentary to Article 4 at p. 94, para. 3 and footnote 108.  WT/DS285/R 
 Page 167 
 
 
sense.700  It extends to organs from any branch of the State, exercising legislative, executive, judicial 
or any other functions.   
6.129  The fact that certain institutions performing pu blic functions and exer cising public powers are 
regarded in internal law as autonomous and inde pendent of the executive government does not affect 
their qualification as a state organ.701  Thus, the fact that the USITC is qualified as an "independent 
agency" does not affect the attributability of its actio ns to the United States,  because what matters is 
the activity at issue in a particular case, not th e formal qualification of the body concerned.   
6.130  Consequently, official pronouncements by the USITC in an area wher e it has delegated 
powers are to be attributed to the United States.   In this dispute, the USITC Document can 
legitimately be considered to be probative of the United States' interpretation of its own GATS 
Schedule.  The Panel will now turn to the content of the USITC Document.  
6.131  The relevant section of the USITC Document reads as follows (bold added):702 
GATT Secretariat's 
Services Sectoral Classification List United Nations' 
Provisional Central Product Classification 
System U.S. Schedule of Services 
Commitments Notes 
Sectors and Sub-sectors Sections, Divisions, 
Groups, Classes Sector-Specific 
Commitments  
10.RECREATIONAL, 
CULTURAL AND SPORTING SERVICES  10.RECREATIONAL, 
CULTURAL AND SPORTING SERVICES GATT and U.S. 
section 10 excludes 
audiovisual 
services 
A. Entertainment services Class 9619: Other 
entertainment services A. Entertainment services GATT and U.S. 
sector "10.A: 
Entertainment services" includes 
theatre, live bands 
and circus services. 
B. News agency services Group 962: News agency 
services B. News agency services   
C. Libraries, archives, 
museums and other cultural services Group 963: Library, 
archive, museum and other 
cultural services C. Libraries, archives, 
museums and other cultural services  
D. Sporting and other 
recreational services 
 Group 964: Sporting and 
other recreational services 
 D. Other recreational 
services U.S. sector "10.D: 
Other recreational 
services" excludes sporting  
 
E. Other ( No 
corresponding CPC )  E. No U.S. commitment  
 
6.132  According to the USITC, the purpose of the document is: 
                                                      
700 The International Law Commission's Articles on State Responsibility, p. 95, para. 6. 
701 The International Law Commission's Articles on State Responsibility, p. 92, para. 6 and p. 98, 
para. 11. 
702 USITC Document, p. 25.   WT/DS285/R 
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"[T]o facilitate comparison of the U.S. Schedule with foreign schedules, the USITC 
has developed a concordance that demons trates the relationships between sectors 
found in the U.S. Schedule, sectors identified in the GATT Secretariat's Services Sectoral Classification List, and sectors defined and numbered in the United Nations' Provisional Central Product Classification (CPC) System. In preparing national 
schedules, countries were requested to iden tify and define sectors and sub-sectors in 
accordance with the GATT Secretariat's list, which lists sectors and their respective 
CPC numbers. Accordingly, foreign schedules frequently make explicit references to the CPC numbers. The U.S. Schedule mak es no explicit references to CPC numbers, 
but it corresponds closely with the GATT Secretariat's list.  The concordance 
developed by the USITC clarifies how the service sectors referenced in the GATT 
Secretariat's list, the CPC System, and the U.S. Schedule correspond ."
703  (emphasis 
added)   
6.133  The content of the USITC Document is not a binding interpretation on the United States.  
However, it has probative value as to how the US gove rnment views the structure and the scope of the 
US Schedule, and, hence, its GATS obligations.  This document confirms other evidence already 
discussed by the Panel regarding the scope of the United States' specific commitments:  W/120, the 
1993 Scheduling Guidelines and the cover-notes to the US Uruguay Round Draft Schedules.  The 
USITC Document clearly states that sub-sector 10.D of the US Schedule "corresponds" to CPC 964.  Under this sub-sector, the United States' Schedule explicitly excluded "sporting services" (CPC 9641), 
but not "gambling and betting services" (CPC 96492).  This confirms the Panel's conclusion following 
its analysis pursuant to Article 31 of the Vienna  Convention, that the US Schedule includes specific 
commitments on gambling and betting services. 
(c) Conclusion 
6.134  Therefore, the Panel finds that the US Sc hedule includes, under sub-sector 10.D, entitled 
"Other recreational services (except sporting)", specific commitments on gambling and betting 
services.   
(d) Final comments 
6.135  Lastly, and before the Panel takes leave of this  issue, it would like to note the United States' 
position that it did not and indeed could not have  scheduled a commitment for gambling and betting 
services given the long legislative hi story of tight regula tion of these services.  As stated by the 
United States: 
"The fact that these measures so clearly fall within Article XIV also serves to confirm 
that it would have been incomprehensible for the United States to make them subject 
of a specific commitment."
704 
Again: 
"[I]t should come as no surprise that the United States did not schedule commitments 
for gambling services, given the overriding policy concerns surrounding those 
services, which are reflected in the extremel y strict limitations and regulations of 
these services.  [...]  In fact, in view of  those concerns, and the numerous bans or 
                                                      
703 USITC document, p. viii. 
704 United States' second written submission, para. 73.  WT/DS285/R 
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restrictions and strict controls on gambling, it would be surprising to find that the United States did schedule such a commitment."
705 
6.136  The United States has repeated several times in  these proceedings that it did not intend to 
schedule a commitment for gambling and betting services.706  This may well be true, given that the 
legislation at issue in this dispute predates by decades, not only the GATS itself, but even the notion 
of "trade in services" as embodied therein.  We have, therefore, some sympathy with the United 
States' point in this regard.  However, the scope  of a specific commitment cannot depend upon what a 
Member intended or did not intend to do at the time of the negotiations. In this context, the Panel 
recalls that: 
"[T]he purpose of treaty interpretation unde r Article 31 of the Vienna Convention is 
to ascertain the common  intention of the parties.  These common intentions cannot be 
ascertained on the basis of the subjective and unilaterally determined 'expectation' of 
one of the parties to a treaty.  Tariff concessions provided for in a Member's Schedule 
– the interpretation of which is at issue he re – are reciprocal and result from mutually 
advantageous negotiations between importing and exporting Members."707 
6.137  While Members are expected to negotiate, apply and interpret their treaty obligations in good 
faith, there are no provisions in the WTO Agreement that would allow a Member's intentions to be 
probed and determined, except as reflected in the treaty language. 
6.138  Pursuant to Article XVI:4 of the WTO Ag reement, "Each Member shall ensure the 
conformity of its laws, regulations and administra tive procedures with its obligations as provided in 
the annexed Agreements".  Thus, independent of any expectation or any unintentional mistake, the 
United States' obligations pursuant to Article XVI:4 are to ensure that its relevant laws are in 
conformity with its WTO obligations, including any commitments undertaken in its GATS Schedule.   
C. THE MEASURE (S) AT ISSUE  
1. Claims and main arguments of the parties 
6.139  Antigua's request for the establishment of this Panel lists as the challenged "measures" federal 
and state laws as well as court decisions, stat e Attorneys' General statements, websites and 
agreements between US enforcement agencies and credit card companies.708  In its submissions, 
Antigua argues that all of these "measures" constitu te a "total prohibition" on the cross-border supply 
of gambling and betting services that is inconsiste nt with the United States' obligations under the 
GATS.709  In support of its claims that the GATS has been violated, Antigua relies upon what Antigua 
refers to as an "admission" by the United States before the DSB and before the Panel in these 
proceedings that the United States maintains a prohibition on the cross-border supply of some 
gambling and betting services.710 
                                                      
705 United States' second written submission, para. 15   
706 See also first oral statement, para. 26 ("The Unite d States submits that if the United States and its 
Uruguay Round negotiating partners had intended such a commitment [on gambling and betting services] on the 
part of the United States, especially on this very sensitive issue, the US Schedule would have said so explicitly.  
Needless to say, it does not.") 
707 Appellate Body Report on EC – Computer Equipment , para. 84.   
708 Request for the Establishment of a Panel by Antigua and Barbuda, WT/DS285/2. 
709 Antigua's first written submission, para. 1; Antigua's first oral statement, para. 23; Antigua's second 
written submission, paras. 5, 13, 19 and 21; Antigua's reply to Panel question No. 32.  
710 Antigua's first written submission, paras. 1, 133 an d 136; Antigua's first oral statement, para. 13; 
Antigua's reply to Panel question No. 9; Antigua's second written submission, paras. 8 and 136. WT/DS285/R 
Page 170  
 
6.140  The United States claims that Antigua's identification of challenged measures is not consistent 
with the DSU and the GATS.  Accord ing to the United States, a "total prohibition" is not a "measure" 
within the meaning of the DSU and the GATS.
711  Moreover, Antigua's argumentation on the 
instruments that are said to result in this "total prohibition" is insufficient to satisfy Antigua's burden 
to provide a prima facie demonstration that th ese instruments affect the cross-border supply of 
gambling and betting services in a manner inconsiste nt with the United States' obligations under the 
GATS.712   The United States also submits that nothing that United States has said to the DSB or to 
the Panel in the course of these proceedings reli eves Antigua of its burden to say exactly what 
measures it is challenging and how it alleges that t hose measures, individually or in combination, 
violate the GATS.713 
2. Relevant WTO provisions 
6.141  Article I:3 of the GATS reads as follows:  
"'[M]easures by Members' means measures taken by:  
(i) central, regional or local governments and authorities;  and  (ii) non-governmental bodies in the exercise of powers delegated 
by central, regional or local governments or authorities.   
In fulfilling its obligations and commit ments under the Agreement, each Member 
shall take such reasonable measures as ma y be available to it to ensure their 
observance by regional and local governme nts and authorities and non-governmental 
bodies within its territory." 
6.142  Article XXVIII(a) of the GATS provides that "measure" means:  
"[A]ny measure by a Member, whether in the form of a law, regulation, rule, 
procedure, decision, administrative action, or any other form." 
6.143  In addition, Article XXVIII(c) provides that "measures by Members affecting trade in 
services" include measures in respect of: 
"(i) the purchase, payment or use of a service;  
(ii) the access to and use of, in connec tion with the supply of a service, services 
which are required by those Members to  be offered to the public generally;  
(iii) the presence, including commercial pre sence, of persons of a Member for the 
supply of a service in the territory of another Member." 
6.144  Article XXIII of the GATS provides that:   
"If any Member should consider that any other Member fails to carry out its 
obligations or specific commitments under th is Agreement, it may with a view to 
reaching a mutually satisfactory resolution of  the matter have recourse to the DSU." 
                                                      
711 United States first written submissi on, para. 2; United States' first oral statement, para. 17; United 
States' reply to Panel question No. 9; United St ates' second oral statement, paras. 10-11. 
712 United States' first written submission, paras. 3 and 44; United States' second written submission, 
para. 7; United States' second  oral statement, para. 2. 
713 United States' second oral statement, para. 19.  WT/DS285/R 
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6.145  Article 3.3 of the DSU provides that: 
"The prompt settlement of situations in wh ich a Member considers that any benefits 
accruing to it directly or indirectly under the covered agreements are being impaired 
by measures taken by another Member is essential to the effective functioning of the WTO and the maintenance of a proper balan ce between the rights and obligations of 
Members." 
6.146  Article 6.2 of the DSU provides that the request for the establishment of a panel:  
"[S]hall … identify the specific measures at issue and provide a brief summary of the 
legal basis of the complaint suffici ent to present the problem clearly." 
6.147  It is also important to bear in mind that the measures(s) that have been challenged in a panel 
request may, at the end of the dispute settlement process, be the subject of DSB recommendations 
under Article 19.1 of the DSU, which provides that:  
"Where a panel or the Appellate Body concludes that a measure  is inconsistent with a 
covered agreement, it shall recommend that the Member concerned
714 bring the 
measure into conformity with that agreemen t.  In addition to its recommendations, the 
panel and the Appellate Body may suggest  ways in which the Member concerned 
could implement the recommendations." 
3. Assessment by the Panel 
(a) "Measures" being challenged  
(i) Legal standard relating to the identifica tion of the measures being challenged  
6.148  The Panel commences by noting that the purpose of  the exercise that we will undertake in this 
section of our Report is to identify the measures that  the Panel will consider in determining whether 
the specific provisions of the GATS that Antigua h as invoked have been violated.  Under WTO law, 
the measures that a panel is obliged to consider ar e those contained in the relevant panel request.  
However, for reasons that are explained in greater  detail below, the issue of which measures we are 
obliged to consider in this case is not a straightfo rward one.  We set out below the framework within 
which we will determine which meas ures should be considered by us in assessing Antigua's claims of 
violation of the GATS. 
6.149  First, we note that the provisions of the GATS and the DSU that have been referred to above 
clearly require that a Member must specifically id entify the "measures" that are the basis for a claim 
that another Member has failed to fulfil its oblig ations or specific commitments under the GATS.  In 
particular, Article XXIII of the GATS effectively provides that Members may have recourse to the 
DSU in cases where one Member considers that anot her Member has not abided by its obligations 
and/or specific commitments under the GATS.  In turn , Article 6.2 of the DSU requires that "specific 
measures" be identified in a panel request. 
6.150  In our response to the US request for preliminary rulings715, we concluded that, since 
Article 6.2 of the DSU is a general provision governi ng the content of panel requests, it must be read 
together with relevant provisions cont ained in the concerned WTO agreements.716  In this case, the 
                                                      
714 (original footnote ) The "Member concerned" is the party to the dispute to which the panel or 
Appellate Body recommendations are directed. 
715 Annex B of the Panel Report contains our response to the US request for preliminary rulings. 
716 The Panel's response to the US request for preliminary rulings, para. 34. WT/DS285/R 
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relevant provisions are contained in the GATS.   Articles I:3 and XXVIII(a) and (c) of the GATS 
together broadly define the "measures" to which the provisions of the GATS apply.  To the extent that 
the definition of a "measure" in Articles I:3 and XXVIII(a) and (c) of the GATS is broader than the 
meaning attributed to that term under Article 6.2 of  the DSU, the definition contained in the former 
supplements the meaning of "measures" under the latter.
717 
6.151  Amongst other things, the identification of the measures challenged in a dispute is important 
to determine the terms of referenc e of a panel and to ensure that the defending party is well informed 
about the basis of the complaint against that party.  In EC – Bananas III , the Appellate Body made 
clear that: 
"It is important that a Panel request be sufficiently precise for two reasons:  first, it 
often forms the basis for the terms of refere nce of the Panel pursuant to Article 7 of 
the DSU;  and, second, it informs the defendi ng party and the third parties of the legal 
basis of the complaint."718 
(ii) Identification of "measures" by  Antigua in this dispute 
6.152  The identification and definition of what "measure s" are being challenged by Antigua in this 
dispute have been difficult issues with which the Pa nel has had to grapple since the very inception of 
these Panel proceedings.  The Panel sets out below in  some detail the evolution of the way in which 
Antigua has argued its case to illuminate these issu es and to provide some context for the Panel's 
determination as to which measures it should consider  in determining whether the specific provisions 
of the GATS that Antigua has invoked have been violated by the United States. 
6.153  In its Panel request, Antigua states in relevant part that: 
"The Government of Antigua and Barbuda c onsiders that certain measures of central, 
regional or local governments and authoriti es of the United States are inconsistent 
with the United States' commitments and obligations under the General Agreement on 
Trade in Services (GATS) with respect to the cross-border supply of gambling and betting services. 
The rules applying to the cross-border supply of gambling and betting services in the 
United States are complex and comprise a mixture of state and federal law. The relevant laws are listed in Sections I and II of the Annex attached to this request.  
Although this is not always clear on the face of the text of these laws, relevant United 
States authorities take the view that these laws (separately or in combination) have the effect of prohibiting all supply of gambling and betting services from outside the 
United States to consumers in the United St ates.  Section III of the Annex lists 
examples of measures by non-legislative authorities of the United States applying 
these laws to the cross-border supply of ga mbling and betting services.  The measures 
listed in the annex only come within the scope  of this dispute to the extent that these 
measures prevent or can prevent operators  from Antigua and Barbuda from lawfully 
offering gambling and betting services in the United States under conditions of 
competition compatible with the United States' obligations.  
The total prohibition of gambling and betting services offered from outside the 
United States appears to conflict with th e United States' obligations under GATS and 
                                                      
717 The Appellate Body has already so determined in Guatemala – Cement I : Appellate Body Report, 
para.75.  See also the Appellate Body Report on US – Hot-Rolled Steel , para. 62. 
718 Appellate Body Report on EC – Bananas III , para. 142.  WT/DS285/R 
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its Schedule of Specific Commitments annexe d to the GATS (and in particular Sector 
10.D thereof) for the following reasons: 
(a) The central, regional or local authorities of the United States 
allow numerous operators of United States origin to offer all types of gambling and betting services in the United States (sometimes via 
exclusive rights or monopolistic structures).  There appears to be no 
possibility for foreign operators, however, to obtain an authorization to supply gambling and betting services from outside the United States.  This appears to conflict with the United States' commitments 
and obligations under GATS, including Articles VI:1, VI:3, VIII:1, 
VIII:5, XVI:1, XVI:2, XVII:1, XVII:2 and XVII:3 and its Schedule 
of Specific Commitments. 
(b) The United States authorities also restrict international 
transfers and payments relating to gambling and betting services 
offered from outside the United States.  Some of the non-legislative 
measures listed in Section III of the Annex are examples thereof:  the 
measures described in the documents released by the Florida Attorney General and the New York Attorney General.  These restrictions appear to violate Articles VI:1, XI:1, XVI:1, XVII:1, XVII:2 and XVII:3 of GATS and th e United States' Schedule of 
Specific Commitments."
719 
6.154  In its first written submission, Antigua framed its argumentation on the basis of what it 
considered to be an admission by the United States  that there is a "total prohibition" on the cross-
border supply of gambling and betting services in the Unite d States.  On the basis of this admission, in 
its first written submission, Antigua did not discuss in  any detail the specific provisions of US laws in 
support of its allegation that the United States main tains measures inconsistent with its obligations 
under Articles XVI, XVII, VI and XI of the GATS.720   
6.155  Following Antigua's first written submission, the United States made a request for 
preliminary rulings.721  In its request for preliminary ruli ngs, the United States asked the Panel to 
declare that Antigua's challenge of a network of federal and state laws, which, according to Antigua, 
together constitute a "total prohibition" on the cr oss-border supply of gambling and betting services, is 
not compatible with the GATS, the DSU and the WTO Agreement.722 
6.156  In its response to the United States' request for preliminary rulings, the Panel noted that, in its 
Panel request, in its first written submission, and in its comments on the US request for preliminary 
rulings, Antigua had indicated that it is effectively challenging the overall and cumulative effect of 
various federal and state laws  which, together with various polic y statements and other governmental 
actions, constitute a total prohibition on the cr oss-border supply of gambling and betting services 
which is, in Antigua's view, inconsis tent with the US GATS obligations.723  Indeed, at that stage of the 
proceedings, we considered that this was the basis upon which Antigua was framing its challenge. 
                                                      
719 Request for the Establishment of a Panel by Antigua and Barbuda, WT/DS285/2. 
720 See, for example, Antigua's first wr itten submission, paras. 133 and 136. 
721 The United States made a request for preliminary rulings on 17 October 2003, details of which are 
set out in Annex B. 
722 United States' request for prel iminary rulings, paras. 16-21.  
723 See para. 17 of the Panel's response to the US Request for preliminary rulings.  The Panel's 
characterisation of Antigua's challenge was based, inter alia  on paras. 13-17 of Antigua's comments on the 
United States' request for preliminary rulings and para s. 140-143 of Antigua's first written submission.   WT/DS285/R 
Page 174  
 
6.157  However, in its second written submission, Antigua stated that it is challenging a "total 
prohibition" on the cross-border supply of gambli ng and betting services.  According to Antigua,  this 
total prohibition " in and of itself constitutes a meas ure within the meaning of the GATS ".
724  When we 
asked Antigua whether it was challenging specific legislative and regulatory provisions, the specific 
application of those provisions, and/or US practices vis-à-vis (foreign) cross-border supply of 
gambling and betting services, Antigua confirmed that it was challenging all three aspects with the 
objective of bringing the "total prohibition itself before the Panel".725 Antigua submitted at that stage 
of the Panel proceedings that it considered it "logical  and efficient to challenge the United States' total 
prohibition as a measure in and of itself composed of specific legislative and regulatory provisions, applications and practices that separately a nd jointly impair Antigua's GATS benefits".
726    
6.158  The United States argues that the concept of a "total prohibition" is devoid of any legal 
meaning or consequences under either US law or th e GATS.  In fact, throughout these proceedings, 
the United States has maintained the position that An tigua cannot challenge a "total prohibition" on 
the cross-border supply of gambling and betting services as a single measure.727  The United States 
considers that the only claims within the scope of Antigua's Panel request and, therefore, within the 
Panel's terms of reference, are "as such" claims in respect of specific legislative provisions and/or the 
collective effect of two or more such provisions.728  According to the United States, Antigua is 
essentially making assertions about the collective effect  of US domestic laws relating to the remote 
supply of gambling and betting services, without rega rd to individual measures and how they work.  
The United States submits that panels have often ex amined claims based on the combined effect of 
two or more measures but have correctly approach ed such claims by first examining each specific 
measure that allegedly contributes to a combined effect.729  According to the United States, it is not 
possible to know what the combined effect of vari ous measures is as a matter of municipal law, 
without first examining how each measure works a nd then analysing how these measures interact.730  
The United States adds that the Appellate Body in its recent report on US – Carbon Steel  made clear 
that a party asserting that another party's municipa l law is inconsistent with a WTO obligation must 
introduce evidence as to the scope a nd meaning of that municipal law.731  In the United States' view, 
in order to succeed with its claims, Antigua must identify which specific  provisions of the US laws are 
inconsistent with which specific  provisions of the GATS, and it must demonstrate prima facie how 
and why such inconsistencies arise.732   
6.159  Antigua has consistently stated that it is wasteful and unnecessary to identify the various 
domestic legislative provisions that will need to be brought into conformity with the GATS.733  I t  
argues that there is no need to conduct a debate on the precise scope of specific US laws because the 
United States has admitted a total prohibition on  the cross-border supply of gambling and betting 
services under US law.734  It further argues that the fact that  a "measure" that is challenged in the 
                                                      
724 Antigua's reply to Panel question No. 10; Antigua's second written submission, para. 8; Antigua's 
second oral statement, para. 12. 
725 Antigua's reply to Panel question No. 10. 
726 Antigua's reply to Panel question No. 10. 
727 United States first written submissi on, para. 2; United States' first oral statement, para. 17; United 
States' reply to Panel question No. 9; United St ates' second oral statement, paras. 10-11. 
728 United States' reply to Panel question No. 10. 
729 United States' first written submission, para. 50; United States' second written submission, para. 7. 
730 United States' first written submission, para. 74; Antigua's first oral statement, paras. 17-18. 
731 United States' first oral statement, para. 16; Unite d States' second oral st atement, paras. 10-11. 
732 United States' first written submission, para. 50; United States' first oral statement, para. 16; United 
States' second oral stat ement, paras. 10-11. 
733 Antigua's first oral statement, para. 25; Antigua's reply to Panel question No. 10. See also para. 23 
of Antigua's second written submission where it states that it has "not been able to investigate" all the criteria 
that all states apply to authorize a domestic  operator to offer gambling and betting services. 
734 Antigua's first written submission, para. 136; Antigua's first oral statement, para. 13; Antigua's reply 
to Panel question No. 9; Antigua's second written submission, paras. 8 and 136.  Antigua further argues that  WT/DS285/R 
 Page 175 
 
 
WTO may comprise one or more laws, rules or ac tions under domestic law cannot be definitive in 
determining whether the sum of the laws constitu tes a "measure" within the meaning of the DSU.735 
6.160  The United States does not appear to admit the ex istence of a "total prohibition" on the cross-
border supply of gambling and betting services a lthough it does admit a prohibition on the remote 
supply of most gambling and betting services.   
6.161  During two successive DSB meetings, the Unite d States stated that a prohibition on the 
"cross-border supply of gambling and betting service s under US laws" exists in the United States.736  
The panel's decision in US – Section 301 Trade Act  appears to support the view that the United States 
should be bound by these statements.737  The statements were made by representatives of the United 
States to express their understanding of US law.  Th ey were made in the context of a formal WTO 
meeting for the record.  The United States has not argued that the representatives were acting outside 
the authority bestowed upon them in making these statements.   
6.162  Further, in response to a question posed by  the Panel as to which gambling and betting 
services are prohibited in the United States, the United States responded: 
"The United States is referring principally to services involving the transmission of a 
bet or wager by a wire communication facility across state or U.S. borders, such as 
Internet and telephone betting.  Other gambling services that are similarly restricted both domestically and cross-border include the mailing of lottery tickets between 
states, the interstate transportation of  wagering parapherna lia, and wagering on 
sporting events."
738 
6.163  The United States separately identified aspects of the cross-border supply of gambling and 
betting services that it says are not prohibited in the United States:  
"US restrictions do not preclude cross-border supply of all gambling services, and 
thus are not a 'total prohibition'.  For example: 
 Persons not involved in the business of gambling may transmit casual or 
social bets by any means, provided that the transmission is permissible under state law. 
 Parimutuel betting services may exchange the accounting data and 
pictures necessary to permit a racetrack outside the United States to offer parimutuel betting on U.S. races (and vice-versa), provided that such gambling is legal in both the sending and the receiving jurisdictions. 
 Suppliers of oddsmaking and handicapping services ( e.g., handicappers 
of horse races) as well as other gambling informational services may supply such services, provided that the form of gambling that they 
facilitate is legal in both the se nding and the receiving jurisdictions. 
                                                                                                                                                                     
there may be circumstances in which a panel has to underta ke a precise statutory analysis, namely, in situations 
where there is a genuine disagreement and a genuine lack  of clarity about the effect of a Member's domestic 
law.  Antigua submits that this is patently not the case in  this dispute: Antigua's first oral statement, para. 18; 
Antigua's second oral statement, para. 15. 
735 Antigua's first oral statement, para. 17. 
736 WT/DSB/M/151, para. 47 (24 June 2003); WT/DSB/M/153, para. 47 (21-23 July 2003).  
737 Panel Report on US – Section 301 Trade Act , paras. 7.118–7.125. 
738 United States' reply to Panel question No. 35. WT/DS285/R 
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 Gambling websites may (and many do) provide so-called "free play" 
games in which no real money is wagered. 
 Any other gambling service that does not consist of actual transmission 
of a bet or wager is legal to the extent stated in 18 U.S.C. § 1084(b), provided that it also does not violate state law in the U.S. consumer's 
jurisdiction."
739 
6.164  On the basis of the foregoing, we understand th at the United States admits that federal and 
state laws are applied and enforced so as to proh ibit what it describes as the "remote supply" of most 
gambling and betting services.740  The United States defines "remote supply" as: 
"[S]ituations in which the gambling servi ce supplier (whether foreign or domestic) 
and the service consumer are not physically together.  In other words, the consumer 
of a remotely supplied service does not have to go to any type of outlet, be it a retail 
facility, a casino, a vending machine, etc.  Instead, the remote supplier has no point of 
presence but offers the service directly to the consumer through some means of 
distance communication.  Non-remote supply means that the consumer presents himself or herself at a supplier's point of  presence, thus facilitating identification of 
the individual, age verification, etc."
741   
6.165  Despite the fact that the United States has admitte d that federal and state laws are applied and 
enforced so as to prohibit what it describes as the "remote supply" of most gambling and betting services, what remains unclear is: what are the spec ific provisions of those laws that prohibit the 
remote supply of gambling and betting services in the United States and with which specific provisions and why are they inconsistent with the GATS? 
6.166  As is evident from the foregoing, the Panel h as encountered significant difficulty in pin-
pointing the specific measures at issue in this disput e.  Given that Antigua appears to have argued in 
its most recent submissions that it seeks to bring th e "total prohibition" on the cross-border supply of 
gambling and betting services before the Panel, we cons ider that there are two critical issues that we 
need to decide before we can proceed to examine and assess Antigua's  claims of violation with the 
GATS.  First, can Antigua challenge a "total pr ohibition" on the cross-border supply of gambling and 
betting services under US law as a measure in and of itself in the context of this dispute?  Secondly, if 
Antigua is not entitled to challenge such a "total prohibition" as a measure in this dispute, which 
measures must the Panel consider in determining whether Antigua has demonstrated its claims that the GATS has been violated?  We c onsider these issues in turn below. 
(b) Can Antigua challenge a "total prohibition" on the cross-border supply of gambling and 
betting services under US law as a measure in and of itself in the present dispute? 
6.167  Pursuant to Article 7 of the DSU and the Appellate Body's findings in EC – Bananas III  
742, 
the Panel must refer to Antigua's Panel request in determining whether or not Antigua can challenge a 
"total prohibition" as a measure in this dispute given that it is the Panel request that defines our terms 
of reference. 
                                                      
739 United States' second written submission, paras. 26-27. 
740 We note that in its reply to Panel question No. 35, the United States submitted that the transmission 
of a bet or wager by a wire communication facility across st ate or U.S. borders, such as Internet and telephone 
betting, the mailing of lottery tickets between states, the interstate transportation of wagering paraphernalia, and 
wagering on sporting events are restricted both domestically and cross-border .  We understand from this 
statement that federal and state laws prohibit the remote supply of gambling and betting services. 
741 United States' reply to Panel question No. 42. 
742 Appellate Body Report on EC – Bananas III , para. 142.  WT/DS285/R 
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6.168  We recall that, in its Panel request743, Antigua argues that "certain measures of central, 
regional or local governments and authorities of the United States" are inconsistent with the United 
States' commitments and obligations under the GA TS with respect to the cross-border supply of 
gambling and betting services.  The Panel request goes on to state that "the relevant laws are listed in 
Sections I and II of the Annex attached to this  request" and that "Section III of the Annex lists 
examples of measures by non-legislative authoriti es of the United States applying these laws to the 
cross-border supply of gambling and betting services".  Also of relevance is the fact that the Panel 
request states that "the measures listed in the Annex only come within the scope of this dispute to the 
extent that these measures prevent or can prevent operators from Antigua and Barbuda from lawfully 
offering gambling and betting services in the United States under conditions of competition 
compatible with the United States' obligations."744   
6.169  Nowhere in its Panel request does Antigua list a "total prohibition" as a measure that is sought 
to be challenged.  Rather, in its Panel request, Anti gua describes the effect of the laws referred to in 
Sections I and II of the Annex as "prohibiting all supply of gambling and betting services from outside the United States to consumers in the United States".  The Panel request then goes on to state 
that this effect, which is subsequently labelled in  the Panel request as "the total prohibition" of the 
supply of gambling and betting services offered from outside the United States, conflicts with the 
United States' obligations under the GATS. 
6.170  It is apparent to us from the Panel request th at Antigua identified the measures contained in 
its Annex as those that were the subject of its challenge  under the GATS.  It is also apparent to us that 
Antigua refers to the "total prohibition" in its Pa nel request to describe the alleged effect of the 
measures listed in Sections I and II of the request. 
6.171  We consider that Antigua is bound to rely upon  the measures identified in its Panel request.  
Since it did not identify the "total prohibition" as a measure in and of itself, it is not entitled to rely upon it as a "measure" in this dispute.  Moreover, we consider that, in the present dispute, even if the 
"total prohibition" were to have been identified as a "measure" in its Panel request, Antigua is not 
entitled to rely upon the "tot al prohibition" as such for the reasons set out below. 
6.172  Article XXVIII(a) of the GATS provides that a "measure" under the GATS is "any measure 
by a Member, whether in the form of a law, regul ation, rule, procedure, decision, administrative 
action, or any other form " (emphasis added).  The reference to "any other form" in this definition 
indicates a broad interpretation of the term "measures" in the context of the GATS. 
6.173  In US – Corrosion-Resistant Steel Sunset Review , the Appellate Body, in discussing the 
meaning of the term "measure" under WTO law, made  reference to Article 3.3 of the DSU.  In 
particular, it stated that: 
"Article 3.3 of the  DSU refers to 'situa tions in which a Member considers that any 
benefits accruing to it direc tly or indirectly under the covered agreements are being 
impaired by  measures taken by another Member '. (emphasis added)  This phrase 
identifies the relevant nexus, for purposes of dispute settlement proceedings, between 
the 'measure' and a 'Member'.  In principle, any act or omission attributable to a WTO 
Member can be a measure of that Member for purposes of dispute settlement 
proceedings .  The acts or omissions that are so attributable are, in the usual case, the 
acts or omissions of the organs of the stat e, including those of the executive branch.  
In addition, in GATT and WTO dispute settle ment practice, panels have frequently 
examined measures consisting not only of particular acts applied only to a specific 
                                                      
743 The relevant aspects of Antigua's Panel request are set out in para. 6.153 above. 
744 Antigua's reiterates this in para. 141 of its first written submission. WT/DS285/R 
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situation, but also of acts setting forth rules or norms that are inte nded to have general 
and prospective application.  In other words, instruments of a Member containing 
rules or norms could constitute a 'measure' , irrespective of how or whether those 
rules or norms are applied in a particular instance . 
...  
This analysis leads us to conclude that there is no basis , either in the practice of the 
GATT and the WTO generally or in the provisions of the  Anti-Dumping Agreement, 
for finding that only certain types of measure can, as such, be challenged in dispute 
settlement proceedings  under the Anti-Dumping Agreement."
745 (emphasis added) 
6.174  In summary, the definition of "measures" unde r the GATS as well as jurisprudence regarding 
the interpretation of this term in the context of the DSU indicates a broad reading of the term under 
the GATS.  It includes any "act or omission attri butable to a WTO Member" and "instruments of a 
Member containing rules or norms ... irrespective of how or whether those rules or norms are applied 
in a particular manner". 
6.175  Notwithstanding the broad concept of "measur es" under the GATS and the DSU, the Panel 
believes that, in the circumstances of this case, the alleged "total prohib ition" on the cross-border 
supply of gambling and betting services describes the a lleged effect of an imprecisely defined list of 
legislative provisions and other instruments and cannot constitute a single and autonomous "measure" 
that can be challenged in and of itself, even if it is claimed that, together, these legislative provisions 
and other instruments result in a total prohibition.  Our reasons for forming this conclusion are as follows. 
6.176  First, as we understand it, Antigua's use of the term "total prohibition" in this case is by way 
of description  of an alleged effect to which it takes objecti on, namely the fact that Antigua's suppliers 
are prohibited from providing gambling and betting services in the United States on a cross-border 
basis.  As noted above, the Appellate Body in US – Corrosion-Resistant Steel Sunset Review  made it 
clear that "instruments of a Member containi ng rules or norms could constitute a 'measure'"  that may 
be the subject of challenge under the DSU.  We do not consider that a "total prohibition" as explained 
by Antigua can be construed, in this dispute, as an  "instrument" within the meaning ascribed to that 
term by the Appellate Body because it is a descrip tion of an effect rather than an instrument 
containing rules or norms. 
6.177  Secondly, Article 6.2 of the DSU requires that measures be "specifically" identified in a panel 
request.  In our view, the "total prohibition" has not  been "specifically" identified.  In particular, the 
details of how it is constituted are far from clear.  We recall in this regard that Antigua has listed 93 
laws in its Panel request.  However, during the co urse of these proceedings, Antigua itself raised the 
question as to which of these laws and which provisions  of these laws, if any, should be examined as 
part of the alleged "total prohibition".  In partic ular, in response to a question posed by the Panel 
requesting clarification as to what Antigua is specif ically challenging, Antigua referred to the laws in 
its Panel request and replied as follows:  
"It is important to note ... that Antigua has cited all these laws in its Panel request in 
order to be as comprehensive as possible, not because it believes that each law is an 
essential part of a "puzzle" without which there would be no total prohibition. ... most 
of the laws cited in the Panel request a re prohibition laws that could be applied 
                                                      
745 Appellate Body Report on US – Corrosion-Resistant Steel Sunset Review , paras. 81-82 and 88.  WT/DS285/R 
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independently of each other to prohibit cross-border supply from Antigua ."746 
(emphasis added) 
6.178  The Panel attempted on several other occasions to seek clarification from Antigua as to what 
exactly it is challenging.  When asked by the Pa nel which specific provisions of which specific 
legislative measures it is actually challenging, Antigua replied: 
"Antigua is in essence challenging every legislative provision that could be construed  
to form a piece  of the United States' total prohibition on the cross-border supply of 
gambling and betting services.  The statutory provisions that the United States appears  to rely on most heavily in its law enforcement actions, or are most likely  to 
form part of the total ban, were listed in th e Annex to Antigua's Panel request and 
also have been submitted to the Panel, together with summaries."
747 (emphasis added) 
6.179  In its first oral statement, Antigua underlined "[its] effort at identifying, in [its] Panel and 
consultations requests, a huge number of American  laws", which, in its view, demonstrates "good 
faith".  However, at the same time, it states that  the complexity and ambiguity as well as the overlap 
between federal and state laws made it "very difficult  to identify with complete precision all laws and 
regulations of the United States that could be app lied in the prohibition of the cross-border supply of 
gambling and betting services."748  Antigua also states that it fi nds it "wasteful and unnecessary" to 
engage in such an identification exercise.749   
6.180  In our view, in the light of the relevant prov isions of the DSU, in particular Article 7 
concerning the "terms of reference" and the prima facie requirements of Antigua's burden of proof, we 
believe that it is crucial, and not "wasteful a nd unnecessary", to be precise and consistent in the 
identification of the measures at issue.   
6.181  Thirdly, the Panel recalls that the identificati on of the challenged measures is critical not only 
in terms of defining the Panel's te rms of reference and informing the defending party of the legal basis 
of the complaint so that it can defend itself but also because the challenged measure, if found to be in 
violation of a WTO agreement, must be brought in to conformity with that agreement pursuant to 
Article 19.1 of the DSU.  In our view, the ability of an instrument to be brought into conformity with 
a WTO Agreement is an important consideration in  determining whether or not a measure has been 
sufficiently identified for the purposes of the DSU and the GATS. 
6.182  The Panel fails to see how the United States could be requested to implement a DSB 
recommendation to bring a "prohibition" into comp liance with the GATS pursuant to Article 19.1 of 
the DSU when an imprecisely defined "puzzle" of la ws forms the basis of the "total prohibition" that 
has been identified by Antigua as the challenged measure.750  The Panel also fails to see how the DSB 
could monitor the implementation process pursuan t to Article 21.6 of the DSU and how an 
implementation panel established under Article 21.5 of the DSU could assess the WTO compatibility of any implementing measure, if there is no certain ty as to which laws should ultimately be changed 
                                                      
746 Antigua's reply to Panel question No. 32. 
747 Antigua's reply to Panel question No. 10. 
748 Antigua's first written submission, para. 135. 
749 Antigua's first oral statement, para. 25. 
750 Indeed, it could be said that Antigua itself has acknowledged this.  Antigua submits that "Antigua 
and Barbuda needs to ensure that, at the stage when the United States n eeds to implement any recommendations 
and rulings resulting from this proceeding, the United States cannot take the position that it needs to amend only 
the Wire Act and can continue to apply its other prohibitio n laws. This is particularly important because, given 
the huge amount of American legi slation on gambling and betting, it can not be excluded that Antigua and 
Barbuda has been unable to identify all domestic laws that could possibly be applied against the cross-border 
supply of gambling services." : Antigua's first oral statement, para. 22. WT/DS285/R 
Page 180  
 
to address a "total prohibition" in the event that such  a prohibition were to be found to be in violation 
of the GATS.   
6.183  Antigua has argued that the fact that the "total prohibition" is comprised of a large number of 
different statutory provisions does not mean that th e United States would have to abolish or amend all 
the individual legislative provisions to bring it in to conformity with the GATS since the US federal 
government possesses power to legislate in the area of international commerce in a manner that would 
"pre-empt" all contradictory state laws and regulations.
751  With respect to this argument, we note that 
our role here is to identify which measures are inc onsistent with the GATS.  Under Article 19.1 of the 
DSU, if we conclude that a measure is inconsistent  with the GATS in this dispute, we can only make a 
recommendation to the DSB that the United States "b ring [its] measure into conformity with [the 
GATS]".  It is clear from the terms of Article 19.1 that our role does not extend to dictating how the 
United States should implement such a recommendation.   At best, pursuant to the second sentence of 
Article 19.1, we could make suggestions as to how the United States could implement our 
recommendation once adopted by the DSB.  However, these suggestions would not be binding on the United States.  Accordingly, we consider that th e fact that the United States may possess a power to 
legislate to override contradictory states laws and regulations with respect to the supply of gambling 
and betting services is not a matter for our considera tion in these proceedings but may be of relevance 
in the context of the assessment, if any, of the implementation of our recommendations under 
Article 21.5 of the DSU. 
6.184  Finally, Members' national laws are always  presumed to be compatible with the WTO 
Agreement.
752  Antigua, as the complaining party in this dispute, bears the burden of properly 
identifying measures with some detail and explanatio n so as to allow the United States to defend itself 
adequately.  The fact that the United States has ad mitted a total or partial prohibition on the remote 
supply of certain gambling and betting services unde r US law does not relieve Antigua of its 
obligation to specifically identify and demonstrat e WTO inconsistencies that result from such a 
prohibition.  Moreover, the fact that a prohib ition on the remote supply of gambling and betting 
services may exist under US law does not, in our view , necessarily mean that such laws are contrary 
to the GATS or to the WTO Agreement.  Antigua mu st still prove that the US prohibition constitutes a 
WTO-inconsistent restriction in respect of which the United States may also be able to invoke general 
or specific exceptions to justify such a prohibitio n.  Accordingly, we fail to see how a simple 
allegation of a total prohibition can enable  Antigua to meet its burden of proof.  
6.185  On the basis of the foregoing, we conclude that  Antigua is not entitled to rely upon a "total 
prohibition" on the cross-border supply of gambling and betting services as a "measure" in and of 
itself in this dispute. 
(c) Measures that the Panel should consider in de termining whether the GATS has been violated 
6.186  The question remains as to which measures the Pa nel should consider in  determining whether 
or not the United States has violated its  obligations under the GATS Agreement. 
6.187  As we stated above, we consider that we ar e bound to examine the measures that Antigua has 
identified in its Panel request.  The Panel request re fers to measures listed in Sections I and II of the 
Annex to Antigua's Panel request, which, according to the request, are laws applying to the cross-
border supply of gambling and betting services in the Un ited States.  The Panel request also refers to 
measures listed in Section III of the Annex, which,  in Antigua's words are "examples of measures by 
non-legislative authorities of the United States applying [the laws contained in Sections I and II] to 
                                                      
751 Antigua's first oral statement, para. 24;  Antigua's reply to Panel question No. 10; Antigua's second 
oral statement, para. 18. 
752 Appellate Body Report on US – Carbon Steel , para. 115  WT/DS285/R 
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the extent that these measures prevent or can prevent operators from Antigua and Barbuda from 
lawfully offering gambling and betting services." 
6.188  The total number of measures contained in Secti ons I, II and III of the Annex to Antigua's 
Panel request is 105.  The measures listed in the Pa nel request are a mix of federal and state laws, 
court decisions, state Attorneys' General stat ements, websites and agreements between US 
enforcement agencies and credit card companies. 
6.189  We asked Antigua to clarify whether the Panel w as expected to consider all of the items listed 
in the Panel request in our determination of wh ether or not the United States has violated the 
GATS.753  Antigua responded: 
"Antigua is challenging all three aspects which are intrinsically linked and are all 
elements of the total ban that Anti gua seeks to challenge in this case.  Legislative and 
regulatory provisions  are given a practical effect by their application  to specific 
cases.  If, for example, the United States maintained its prohibition but did not enforce it, then the impairment of Antigua 's GATS benefits would be much less 
substantial and Antigua would probably not ha ve started this proceeding.  The United 
States practice  vis-à-vis the foreign cross-border supply of gambling and betting 
services is also based on or at least purport ed to be based on legislative and regulatory 
provisions.
754  In Antigua's view it would not be logical or effective to challenge 
some of these elements and not others."755 
6.190  Antigua stated very clearly in the above respon se that it is challenging laws, applications and 
practices relating to the legality of the United St ates' prohibition on the remote supply of gambling 
and betting services.  We refer below to Antigua's s ubmissions and evidence, which, in our view, are 
relevant in deciding which laws, applications a nd practice the Panel may consider in determining 
whether the United States has viol ated the Articles of the GATS that Antigua has invoked.  We first 
examine "specific applications", followed by "practi ce" and, finally, we will consider the "laws" at 
issue.   
(i) Specific applications 
6.191  With respect to the specific a pplications Antigua seeks to cha llenge, when questioned by the 
Panel for further information as to when and how efforts by Antigua's operators to provide cross-
border supply of gambling and betting services had been  the object of refusal by the US enforcement 
authorities, Antigua stated that it was not able to point to any specific rejection of its request for a 
licence to provide cross-border supply of gambli ng and betting services, despite having effectively 
                                                      
753 Panel question No. 10 reads as follows:  "Is Antigua and Barbuda challenging: (i) specific 
legislative and regulatory provisions  that are claimed to amount to a proh ibition on the cross- border supply of 
gambling and betting services as such ; and/or (ii) the specific application  of such provisions; and/or (iii) the US 
practice  vis-a-vis the foreign cross-border supply of gambling and betting services?"   
754 (original footnote ) See, e.g., the "Assurance of Discontinuance" entered into in August 2002 
between the Attorney General of the State of New York and Paypal, Inc. (a copy of which is found at Exhibit AB 56) and the discussion of that document in Antigua's response to Question 29. See also  Exhibits AB 73, 92, 
94, 96 and 98. 
755 Antigua's reply to Panel question No. 10.  In addition, Antigua submits that it is possible to 
challenge in dispute settlement proceedings a total prohib ition that is comprised of numerous specific legislative 
and regulatory provisions, application[s] of such prov isions and practices: Antigua's second written submission, 
para. 13. WT/DS285/R 
Page 182  
 
asserted as much in its first written submission and first oral statement.
756  For the purposes of 
clarifying its allegations, in response to a question posed by the Panel, Antigua submitted: 
"What was meant here was not that An tiguan operators had applied to supply 
gambling and betting services into the United States and were refused—the point was that under United States law, it is impossible for Antiguan suppliers to meet any 
authorization criteria.  There are two reasons  for this.  First is the obvious, that the 
United States government considers the provision of cross-border gambling and 
betting services illegal, and thus it would be illegal under United States law as it currently exists for Antiguan suppliers to gain authorization.  At the first Panel 
meeting Antigua asked the United States to explain how Antiguan service providers 
could lawfully provide gambling and betti ng services into the United States.  In 
response, the United States confirmed that this was not possible. 
Second, under the laws or practice  of every state that provides for state-sanctioned 
gambling in one form or another, the cond itions attached to obtaining the right to 
supply gambling services in the state by de finition preclude Antiguan operators from 
qualifying on a cross-border basis.  Thus, ev en if the United States did not maintain 
its total prohibition, Antiguan operators c ould still not lawfully offer their services 
under the authorization schemes of the various states."
757 (emphasis added) 
6.192  This response appears to us to indicate that An tigua is challenging laws together with related 
practices rather than specific applications of the relevant laws.  However, also in response to a 
question posed by the Panel soliciting support for an a llegation made by Antigua that it is illegal for 
Antigua and Barbuda operators to  provide gambling and betting services in the United States, Antigua 
referred to three court cases in which the relevant provisions of the Wire Act, the Travel Act and the 
Illegal Gambling Business Act were applied.758  It also referred to examples of law enforcement 
action against financial intermediaries.759  Finally, it referred to various  statements by government 
officials advising national advertisers not to a llow advertising for off-shore Internet gambling 
services.760 Although not all of these items would necessarily be "applications" within the meaning of 
WTO jurisprudence, they could, nevertheless, be  used as evidence of how the challenged measures 
are effectively interpreted and applied by the United  States that is, evidence of the United States' 
practice.  
6.193  Some of these items are referred to in Secti on III of the Annex to Antigua's Panel request.761  
Section III lists documents that are categorized by Antigua in the request as  "Other United States and 
State actions or measures".  We note that in our r esponse to the United States' request for preliminary 
rulings, we concluded that: 
                                                      
756 See, for example, Antigua's first written submissi on, paras. 183 and 197 and Antigua's first oral 
statement, para. 88. 
757 Antigua's reply to Panel question No. 11. 
758 In its reply to Panel question No. 12, Antigua refers to the following court cases: United States v Jay 
Cohen  (Exhibit AB-83), Vacco ex rel. People  v World Interactive Gaming Corp  (Exhibit AB-97) and United 
States v Truesdale  (Exhibit AB-115). 
759 In its reply to Panel question No. 12, Antigua also refers to Exhibits AB-56, 57, 58, 73, 92 and 98, 
which it says contain examples of law enforcement acti on against financial intermediaries and media companies 
carrying advertising for foreign gambling and betting services. 
760 In its reply to Panel question No. 12, Antigua refers to Exhibits AB-73, 86, 92 and 116 as examples 
of state action taken regarding the advertisement of  offshore Internet gambling and betting services. 
761 In particular, Section III of the Annex to Antigua's  Panel request lists two of the court cases referred 
to by Antigua, namely, United States v Jay Cohen  (Exhibit AB-83) and Vacco ex rel. People  v World Interactive 
Gaming Corp  (Exhibit AB-97).  Section III also lists four of  the examples of law enforcement action against 
financial intermediaries and media companies referred to by Antigua, namely those contained in Exhibits AB-
56, 57, 58 and 98.    WT/DS285/R 
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"Given that Antigua & Barbuda has indicated that it does not intend to treat the items 
listed in Section III as distinct and aut onomous 'measures' but, essentially, will seek 
to rely upon them as evidence to illustra te the existence of a general prohibition 
against cross-border supply of gambling and betting services in the United States, we 
decline to rule out the relevance of such items.  However, as suggested by Antigua & 
Barbuda, during our substanti ve consideration of this dispute, we will not consider 
and examine them as separate, autonomous measures. " (emphasis added)762 
6.194  In other words, in accordance with what had been suggested by Antigua, we decided during 
preliminary ruling proceedings in  this case that we would not consider and examine the items 
contained in Section III of the Annex to Antigua 's Panel request as separate, autonomous measures 
but that they could be relevant in  Antigua's demonstration that the le gislative measures referred to in 
Sections I and II of the Annex to its Panel request  result in a total prohibition on the cross-border 
supply of gambling and betting services.   
6.195  Therefore, we conclude that Antigua is not challenging specific "applications" in the present 
dispute as separate, autonomous measures.  We w ill, nonetheless, make reference if and where 
necessary to the court cases in which the relevant provi sions of the Wire Act, Travel Act and Illegal 
Gambling Business Act were applied, the law enforc ement actions against financial intermediaries 
and media companies and the statements by governme nt officials advising national advertisers not to 
allow advertising for off-shore Internet gambling services as illustrative of the "practice" of US 
authorities regarding their interpretation and applic ation of the relevant laws, which we discuss in 
greater detail below. 
(ii) Practice 
6.196  The panel in US – Corrosion-Resistant Steel Sunset Review  stated that "practice" under WTO 
law is "a repeated pattern of similar responses to a set of circumstances".763  The Appellate Body in 
the same case indicated that "practice" in the form, for example, of a policy bulletin, may be 
challenged "as such".764  In US – Countervailing Measures on Certain EC Products , the Appellate 
Body issued a recommendation that the US bring its "practice" into conformity with the SCM 
Agreement.  The Appellate Body in US – Carbon Steel  indicated that "practice" may also be used to 
provide evidence of how laws ar e being interpreted and applied.765 
6.197  On the basis of the foregoing, we consider that  "practice" can be considered as an autonomous 
measure that can be challenged in and of itself or it can be used to support an interpretation of a 
specific law that is challenged "as such".   
6.198  We consider that the three court cases in whic h the relevant provisions of the Wire Act, 
Travel Act and Illegal Gambling Business Act were applied, the examples of law enforcement action 
against financial intermediaries and media compan ies and the various statements by government 
officials advising national advertisers not to allow advertising for off-shore Internet gambling services 
could be considered to be "practices".  However,  Antigua is not challenging these practices "as such".  
Rather, in accordance with our reply to the United States' request for preliminary rulings766, the Panel 
considers that Antigua is entitled to and has referre d to these practices in its submissions to support its 
allegations and argumentation that cer tain laws are inconsistent with  the United States' obligations 
under the GATS. 
                                                      
762 See the Response of the Panel to the US request for preliminary ruling contained in Annex B of this 
Panel report. 
763 Panel Report on US – Corrosion-Resistant Steel Sunset Review , para. 7.31. 
764 Appellate Body Report on US – Corrosion-Resistant Steel Sunset Review , para. 97. 
765 Appellate Body Report on US – Carbon Steel , para. 157. 
766 See para. 6.193 above. WT/DS285/R 
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(iii) Laws 
6.199  Turning finally to the laws which Antigua claims result in a "total prohibition" that is contrary 
to the GATS, Antigua has listed 93 laws in its Panel request.  At the Panel's first substantive meeting 
with the parties, Antigua submitted the texts of these laws together with general summaries of most of 
the measures cited in its Panel request.
767   
6.200  However, during the course of these proceedings, Antigua cast doubt on the extent to which 
the Panel should consider each of these laws in its determination of whether or not the United States is 
in violation of the GATS.  Indeed, Antigua stated: 
"The measures listed in the Annex only co me within the scope of this dispute to the 
extent that these measures prevent  or can prevent  operators from Antigua and 
Barbuda from lawfully offering gambling and betting services in the United States 
under conditions of competition compatible  with the United States' obligations."768 
(emphasis added) 
6.201  In addition, as we noted above, Antigua stated that " Most of the measures cited in the Panel 
request are prohibition measures that could arguably  be applied independently of each other against 
Antiguan gaming operators." (emphasis added) 769 
6.202  We recall again that when asked by the Pane l which specific provisions of which specific 
legislative measures it is actually challenging, Antigua replied: 
"Antigua is in essence challenging every legislative provision that could be construed  
to form a piece of the United States' to tal prohibition on the cross-border supply of 
gambling and betting services.  The statutory provisions that the United States 
appears  to rely on most heavily in its law enforcement actions, or are most likely  to 
form part of the total ban, were listed in  the Annex to Antigua's Panel request and 
also have been submitted to the Panel, together with summaries."770 (emphasis added) 
6.203  The United States submits that, to the extent  that Antigua fails to say precisely what 
provisions are or are not relevant, or to offer argumentation on specific provisions, it does not meet 
the basic elements of a prima facie case.771  According to the United States, Antigua cannot sustain its 
burden by merely identifying laws that "could be cons trued" as relevant, or are "most likely" relevant.  
In order for the Panel to consider whether hundred s of US laws interact together so as to be 
inconsistent with the GATS and for the United Stat es to defend its laws, it is both reasonable and 
necessary for Antigua to be very precise about th e specific US measures it is challenging and their 
relevance, meaning, interaction, and interpretati on under US domestic law.  The United States submits 
that Antigua has not done any of this.772 
6.204  It is evident from the foregoing that Antigua is effectively asking the Panel to identify for 
itself which of the listed measures and which provisions of those measures could  be construed as 
imposing a prohibition on the cross-border supply of gambling and betting services.  Even among the measures that could be described as imposing such a prohibition, Antigua states that most of them 
could arguably be applied independently to impose a pr ohibition on the cross-border supply of 
gambling and betting services.  However, the Panel is left to determine for itself which measures 
                                                      
767 Exhibits AB-82, 89, 90, 91 and 99. 
768 Antigua's first written submission, para. 141. 
769 Antigua's first oral statement, para. 19. 
770 Antigua's reply to Panel question No. 10. 
771 United States' second oral statement, para. 12. 
772 United States' second oral statement, para. 2.  WT/DS285/R 
 Page 185 
 
 
could be applied independently to impose such a prohibition.  Antigua further indicates that the measures listed in the Annex only come within the scope of this dispute "to the extent that these 
measures prevent or can prevent operators fro m Antigua and Barbuda from lawfully offering 
gambling and betting services in the United States."  He re again, the Panel is required to determine 
which measures actually prevent or can, in theory, prevent Antigua's operators from lawfully offering 
gambling and betting services in the United States. 
6.205  Confronted with this ambiguity, we must decide which of the 93 laws listed in Sections I and 
II of the Annex to its Panel request we should consider .  By way of context for this determination, we 
recall the following statement of the Appellate Body in Canada – Autos  where, after reversing the 
panel, it wrote: 
"We are mindful of the importance of the GATS as a new multilateral trade 
agreement covered by the  WTO Agreement .  This appeal is only the second case in 
which we have been asked to review a pane l's findings on provisions of the GATS.  
Given the complexity of the subject-matter of trade in services, as well as the newness of the obligations under the GATS, we believe that claims made under the 
GATS deserve close attention and serious analysis."
773 
6.206  This dispute is the fourth WTO case where the GATS has been at issue.   In line with the 
above comments of the Appellate Body, we have d one our utmost to examine the claims made by 
Antigua under the GATS despite the prac tical difficulties we encountered.   
6.207  Antigua stated that it had "provided considerab le evidence of ... the construction of the total 
prohibition [including] numerous references to and discussions of the principal federal statutes used 
by the United States to support its total prohibition; provision to the Panel of the actual text of the 
principal state and federal laws that underlie th e total prohibition; discussions regarding the basic 
scheme of state and federal interaction in the area of gambling and betting and how the state and federal laws act to further the total prohibition."
774  However, in our view, Antigua has effectively left 
the Panel to search through the material that An tigua has submitted to identify which among the 93 
measures identified in Antigua's Panel request result in violations of the GATS.  We do not consider 
that it is permissible for us to search through th e items listed in Antigua's Panel request for the 
purpose of identifying the laws upon which Antigua mi ght have relied in order to support a case that 
Antigua has itself not articulated precisely. 
6.208  Indeed, we note that there are limits to our ab ility to rely for our findings on the results of our 
own investigation and we are we ll aware of those limitations.775  In Japan – Agricultural Products, 
the Appellate Body reversed the panel for effectiv ely having made the complainant's case for it and 
stated that: 
"Article 13 of the DSU and Article 11.2 of  the SPS Agreement suggest that panels 
have a significant investigative authority.  However, this authority cannot be used by 
a panel to rule in favour of a complain ing party which has not established a prima 
facie case of inconsistency based on specific legal claims asserted by it.  A panel [is 
not entitled] to make the case for a complaining party."776   
                                                      
773 Appellate Body Report on Canada – Autos , para. 184. 
774 Antigua's second written submission, para. 19. 
775 In Thailand – H-Beams , in response to an argument by Thailand that the panel had improperly made 
Poland's case for it, the Appellate Body stated that the panel had itself showed a clear appreciation of the 
limitations of its authority as well as its understanding of the role of Poland as the complaining party in this 
dispute.  The Appellate Body concluded that the panel had not erred to the extent that it had asked questions of 
the parties that it deemed necessary "in order to clarify and distil the legal arguments": para. 136. 
776 Appellate Body Report on Japan – Agricultural Products II , para. 129. WT/DS285/R 
Page 186  
 
6.209  Nevertheless, in light of the encour agement by the Appellate Body in Canada – Autos  to pay 
close attention to and to undertake a serious analysis  of Antigua's claims, we perused all of Antigua's 
submissions, including footnotes to those submission s and exhibits submitted by Antigua, with a view 
to identifying which of the 93 laws listed in its Panel request we should c onsider in determining 
whether or not the United States is in violation of its obligations under the GATS.  We note that 
Annex E of this Panel Report contains a summary of what we found.  In particular, the table lists the 
laws that Antigua apparently relies upon in clai ming that the cross-border supply of gambling and 
betting services is prohibited and contrary to the United States' obligations under the GATS.  The 
table indicates whether or not those laws are containe d in Antigua's Panel request and where, if at all, 
in Antigua's submissions and exhib its Antigua refers to and/or discusses these laws.  Set out below is 
a summary of the conclusions that we drew on the basis of our examination of Antigua's submissions. 
6.210  As a starting point, we note that the factual pr emise for Antigua's claims of violation of 
Articles XVI, XVII and VI is the existence of a prohibition on the cross-border supply of gambling 
and betting services.
777  In particular, Antigua argues that fede ral and state laws prohibit or prevent the 
cross-border supply of gambling and betting services by Antigua in violation of Articles XVI, XVII 
and VI of the GATS.  We recall that the United St ates has admitted the existence of a prohibition of 
the remote supply of certain gambling and betting services.  However, the United States has not indicated pursuant to which laws and according to which provisions of those laws the prohibition is 
imposed.   
6.211  Antigua's discussion of the various laws upon wh ich it seeks to rely in this dispute may be 
grouped into three categories that are set out below: 
(a) Laws that are referred to and/or discussed in Antigua's submissions but which are not 
contained in Antigua's Panel request;   
(b) Laws that are contained in the Panel request  but which are not discussed to an extent 
that could enable the Panel to identify acco rding to which particular provisions and 
how the laws result in a prohibition on the cross-border supply of gambling and 
betting services which would be inconsistent with the United States' obligations under 
the GATS;  and 
(c) Laws that are contained in the Panel re quest, which are discussed in Antigua's 
submissions and which indicate according to  which particular provisions and how the 
laws result in a prohibition on the cross-border supply of gambling and betting services. 
6.212  We deal with each of these three categories in turn. 
                                                      
777 With respect to its Article XVI claim, Antigua relies upon the existence of a "total prohibition" on 
the cross-border supply of gambling and betting services in its first written submission, paras. 183–184 and in 
its second written submission, paras. 35–36.  In relation to its Article XVII claim, Antigua also relies upon the 
existence of a "total prohibition" on the cross-border supply of gambling and betting services in para. 39 of its second written submission.  With respect to its Article VI  claim, Antigua also relies upon the existence of "laws 
and regulations prohibiting the supply of gambling an d betting services" in its first written submission, 
paras. 197 and 199 and in its first oral statement, para. 104.  WT/DS285/R 
 Page 187 
 
 
Laws referred to and/or discussed in Antigua's submissions but not contained in 
Antigua's Panel request  
6.213  Below is a list of laws and regulations that were discussed in Antigua's submissions in the 
context of its allegation that federal and state la ws prohibit or prevent the cross-border supply of 
gambling and betting services but which are not  contained in Antigua's Panel request:778 
(a) California:  Cal. Penal Code §§ 187-189, 240-241 and 518-527; 
(b) Connecticut:  Connecticut Division of Speci al Revenue, Administrative Regulations: 
Operation of Bingo Games, Rules 7-169-8a and 7-169-13a;  
(c) Illinois:  Illinois Riverboat Gaming Act § 230; Illinois Compiled Statutes § 10/7 (e); 
(d) Indiana:  Indiana Code §§ 4-33-1-2, 4-33-9-1, 4-33-9-10; Indiana Administrative 
Code § 2 1-4 (c) (1); 
(e) Iowa:  Iowa Racing and Gaming Commission Administrative Rules, Rules 491 – 1, 
491 – 8.2 (4) (g) and 491 – 11.5 (4) (a) (4); 
(f) Kansas:  Kansas Consumer Protection Act; Kansas Crim. Code Ann. §  21-4302(e); 
(g) Louisiana:  Louisiana Gaming Control Law RS § 27 : 65; 
(h) Massachusetts:  Mass. Gen. Laws A nn. ch. 6, § 48; ch. 10, §§ 22-58; 
(i) Mississippi:  Mississippi Gaming Commission Regulations, Section II (B) (2); 
(j) Nevada:  Nev. Rev. Stat. §§ 463.0129, 463. 750, 465.091- 465.094; Regulations of the 
Nevada Gaming Commission an d State Gaming Control Board, Regulations 3.010 (5) 
and (7); 
(k) New Jersey:  N.J. Stat. §§ 5:5-159, 5:8-1 -  8–118, 5:9–1 et seq ;  
(l) New York:  NY Penal Code §§ 120.00-.15 and 155.05 (2) (e); Gen. Mun. Law § 185 
et seq ; Rac., Pari-Mut Wag. & Breed Law §§ 101 and  1012; 
(m) Oregon:  Oregon Administrative Rules, Rules 462-220-0060; 
(n) Utah:  Ut. Const. Art. VI § 27.  
6.214  The Panel request defines our terms of referenc e.  Therefore, we have no jurisdiction to 
examine any laws or regulations that were discussed  by Antigua in support of its allegation that US 
law prohibits the cross-border supply of gambling and betting services but which are not contained in 
Antigua's Panel request.  Consequent ly, we will not consider any of th e laws listed in paragraph 6.213 
above in examining Antigua's claims. 
                                                      
778 We note that Antigua referred to other federal and state laws that are also not contained in Antigua's 
Panel request but which are not listed here because they were not referred to by Antigua in the context of its 
allegation that US law prohibits the cross-border supply of gambling and betting services and/or because they 
have not yet been enacted. WT/DS285/R 
Page 188  
 
Laws contained in the Panel request but not discu ssed to an extent that could enable Antigua 
to provide a prima facie demonstration  
6.215  Below is a list of laws and regulations that we re not discussed by Antigua to an extent that 
would enable the Panel to identify according to whic h particular provisions and how the laws result in 
a prohibition on the cross-border supply of gambling and betting services: 
(a) Federal laws: 
(i) The Federal Aiding and Abetting Statute (18 USC § 2); 
(ii) Interstate Horseracing Act (15 USC §§ 3001 – 3007); 
(iii) Federal Lottery Statute (18 USC §§ 1301 – 1307); 
(iv) Interstate Transportation of Wageri ng Paraphernalia (18 USC § 1953); 
(v) The Professional and Amateur Sports Protection Act (28 USC §§ 3701 – 
3704); 
(vi) Postal Law Regarding Mailing Gamb ling Related Materials (39 USC 
§ 3005). 
(b) State laws:  
(i) All laws listed in the Panel request for the states of Alabama, Alaska, 
Arizona, Arkansas, California, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illi nois, Indiana, Iowa, Kansas, Kentucky, 
Maine, Maryland, Michigan, Mississi ppi, Missouri, Montana, Nebraska, 
Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhod e Island, South Carolina, Tennessee, 
Texas, Vermont, Virginia, Washington, West Virginia, Wisconsin, 
Wyoming, Guam, Puerto Rico, US Virgin Islands;   
(ii) Colorado:  Colo. Const. art. XVIII, § 2;  Col. Rev. Stat. §§ 18-10-101 - 18-10-
102 and 18-10-104 - 18-10-108; Col. Rev. Stat. §§ 12-47.1-101 - 12-47.1-
106; 
(iii) Louisiana: La. Const. art. XII, § 6; La. Rev. Stat. Ann. §§ 14:90.0 - 14:90.2, 
14:90.4; 
(iv) Massachusetts:  Mass. Gen. Laws Ann. ch. 271, §§ 1-50 except § 17A; 
(v) Minnesota:  Minn. Stat. Ann. §§ 609.76 - 609.754;  609.756 - 609.763; 
(vi) New Jersey:  N.J. Stat. Ann. §§ 2A:40-2 - 2A:40-9, 2C:37-1 - 2C:37-9, 5:5-
63, 5:12-1 - 5:12-210; 
(vii) New York:  N.Y. Executive Law §§ 430 - 439a; N.Y. Penal Law §§ 225.00-
225.40; N.Y. General Obligation Law §§ 5-402 - 5-423; 
(viii) South Dakota:  S.D. Codified Laws §§ 22-25-1 - 22-25-15; and 
(ix) Utah:  Utah Code Ann. §§ 76-10-1101, 76-10-1103 - 76-10-1109.  WT/DS285/R 
 Page 189 
 
 
6.216  In its examination of Antigua's submissions, th e Panel found that, in the context of a very 
general discussion regarding the existence of an alleged prohibition on the cross-border supply of 
gambling and betting services779, Antigua included a footnote reference to exhibits containing what it 
itself described as a "huge number of American laws".780  The exhibits cited in the footnote contain 
the texts781 and very brief summaries of the laws that  are referred to in paragraph 6.215 above.782   
6.217  The summaries contained in these exhibits do not  enable us to identify according to which 
particular provisions and how the laws result in a prohibition on the cross-border supply of gambling 
and betting services that would be inconsistent wi th the United States' obligations under the GATS.  
Accordingly, we will not consider any of the above laws in examining Antigua's claims under 
Articles XVI, XVII and VI, which are premised upon the existence of a prohibition on the cross-
border supply of gambling and be tting services, because Antigua c ould not and did not make any 
prima facie demonstration that they are inconsistent with the GATS. 
6.218  Additionally, in the case of one of the laws lis ted above, namely, the Interstate Horseracing 
Act ("IHA")783, it is listed in Antigua's Panel request and is, thereby, identified as resulting in a 
prohibition on the cross-border supply of gambling a nd betting services.  However, when referring to 
the IHA in its submissions, Antigua submits very clearly that the IHA allows  gambling by the 
Internet.784  Indeed, Antigua refers to the IHA to sh ow that the United States does not prohibit the 
remote supply of gambling and betting services in the United States as it has suggested.  Therefore, in relation to the IHA, we are still unclear as to how th is Act results in a prohibition on the cross-border 
supply of gambling and betting services.  Since Antigua's claims are premised upon the existence of a prohibition on the cross-border supply of gambling a nd betting services, we will not consider the IHA 
insofar as Antigua seeks to rely upon it as resulting in such a prohibition because Antigua could not 
and did not make any prima facie demonstrati on that it is inconsistent with the GATS.  
Laws contained in the Panel request and discussed in Antigua's submissions 
6.219  Below, we point to US laws contained in An tigua's panel request and for which Antigua has 
been able to identify one or several provisions a nd offer some discussion as to whether and how such 
provisions could be inconsistent with the GATS.  We recall that we are not at this early stage 
assessing the legal validity of Antigua's arguments but  we are only trying to identify which provisions 
of which US laws can be considered to have been sufficiently identified so as to warrant a substantive 
examination by the Panel.  
Federal laws 
6.220  In its first oral statement, Antigua  refers to three US federal laws , which it says indicate that 
the cross-border supply of gambling and betting servi ces is prohibited in the United States.  More 
particularly, Antigua refers to:  
(a) the Wire Act (18 USC § 1084);  
(b) the Travel Act (18 USC § 1952); and  
(c) the Illegal Gambling Business Act (18 USC § 1955).   
6.221  Antigua provides the following discussion of each of these Acts:  
                                                      
779 See Antigua's first oral statement, para. 25. 
780 Exhibits AB-81, 82, 88 and 89. 
781 Exhibits AB-82 and 99.  
782 Exhibits AB-81 and 88. 
783 Interstate Horseracing Act, 15 USC §§ 3001 – 3007. 
784 See, for example, Antigua's first written submission, para. 116. WT/DS285/R 
Page 190  
 
"The 'Wire Act' (18 U.S.C § 1084), wh ich prohibits gambling businesses from 
knowingly receiving or sending certain types of bets or information that assist in placing bets over interstate and international wires;  
The 'Travel Act' (18 U.S.C. § 1952), which imposes criminal penalties for those who 
utilize interstate or foreign commerce with th e intent to distribute the proceeds of any 
unlawful activity, including gambling considered unlawful in the United States;  
The 'Illegal Gambling Business Act' (18 U.S.C. § 1955), which makes it a federal 
crime to operate a gambling business that violates the law of the state where the gambling takes place (provided certain other criteria are fulfilled such as the involvement of at least five people and an operation during more than 30 days).  
Each of these three laws separately prohi bits the cross-border supply of gambling and 
betting services from Antigua."
 785 
6.222  The three federal Acts referred to above are listed in Antigua's Panel request.  Antigua 
provided the full texts of the three Acts to the Pane l in Exhibit AB-82.  In the context of a broader 
discussion about the impact of US laws on the cr oss-border supply of gambling and betting services, 
Antigua refers to Exhibit AB-81, which contains, inter alia , an explanation of how these laws prohibit 
the cross-border supply of gambling and betting services.   
6.223  With respect to Antigua's discussion of the Wire  Act, the Travel Act and the Illegal Gambling 
Business Act, we consider that they have been di scussed in Antigua's submissions, oral statements 
and replies to Panel questions and those discussions indicate according to which particular provisions 
and how the laws allegedly result in a prohibition on the cross-border supply of gambling and betting 
services.   
State laws 
Colorado 
6.224  In its discussion of the legal position regardi ng the supply of gambling and betting services in 
the state of Colorado, Antigua states that "casino ga mbling may only be conducted in historic mining 
towns".786  In a footnote to that statement, Antigua points to an excerpt from a website contained in 
Exhibit AB-131 entitled "Colorado Gaming Questions a nd Answers".  At page 5 of that excerpt, the 
website states that: 
"There is no Colorado state law which expressly addresses Internet gambling.  The 
violation under Colorado law is simply the crime of 'gambling', no different than any 
unlawful form of gambling in Colorado, prohibited by 18-10-103, Colorado Revised Statutes.  A few states other than Colora do have recently passed specific state laws 
expressly prohibiting Internet gambling." 
6.225  Section 18-10-103 of the Colorado Revised Statutes  is referred to in the Panel request and the 
text of that section is contained in Exhibit AB-99.   The text of § 18-10-103 of the Colorado Revised 
Statutes can be found in Annex F. 
6.226  We consider that § 18-10-103 of the Colo rado Revised Statutes has been discussed in 
Antigua's submissions and those submissions indi cate according to which particular provision and 
how the law of Colorado allegedly results in a pr ohibition on the cross-border supply of gambling and 
betting services.   
                                                      
785 Antigua's first oral statement, para. 21. 
786 Antigua's second written submission, para. 26.  WT/DS285/R 
 Page 191 
 
 
Louisiana 
6.227  In its discussion of the federal and state laws applying to the cross-border supply of gambling 
and betting services787, Antigua refers through a footnote to Exhibit AB-119.788  Exhibit AB-119 
contains an article which discusses, inter alia , "The Intersection of States' Rights and Federal 
Interest".  In the context of that discussion, re ference is made to US laws concerning Internet 
gambling.  In particular, the article states: 
"In Louisiana, gambling by computer is i llegal for operators, designers, and producers 
of related computer services unless the wagering takes place on the premises of a licensed river-boat, state lottery outlet or pari-mutuel facility.  Therefore, the same 
Louisiana provision that generally prohibits Internet gambling does allow a very limited use of computer networks for ga mbling restricted to the premises of 
designated wagering facilities."
789  
6.228  A footnote to the excerpted paragraph refers to  § 14:90.3 of La. Rev. Stat. Ann. Section 
14:90.3 of the La. Rev. Stat. Ann. is referred to in the Panel request790 and the text of that section is 
contained in Exhibit AB-99.  The text of § 14:90.3 of La. Rev. Stat. Ann. can be found in Annex F. 
6.229  We consider that § 14:90.3 of the La. Rev.  Stat. Ann. has been discussed in Antigua's 
submissions and those submissions indicate accordi ng to which particular provision and how the law 
of Louisiana allegedly results in a prohibition on the cross-border supply of gambling and betting 
services.   
Massachusetts 
6.230  Antigua states in its submissions that the laws of five states prohibit "unauthorized" 
gambling.791  In making this statement, Antigua points to Exhibit AB-84, which contains summaries 
of five state laws, including those of Massachusetts.  In that Exhibit, as concerns Massachusetts, the 
only statement made that could be construed as rele vant to Antigua's allega tion that the cross-border 
supply of gambling and betting services is prohibite d in Massachusetts is: "Massachusetts law makes 
it illegal to transmit any bet or wager over the telephone."792  In making this statement, Antigua 
includes a footnote reference to M ass. Ann. Laws:  chapter 271 § 17A.793   
6.231  Section 17A of chapter 271 of Mass. Ann. Laws is  referred to in the Panel request and the text 
of that section is contained in Exhibit AB-99.  Th e text of § 17A of chapter 271 of Mass. Ann. Laws 
can be found in Annex F. 
6.232  We consider that § 17A of ch apter 271 of Mass. Ann. Laws has been discussed in Antigua's 
submissions and those discussions indicate accordi ng to which particular provision and how the law 
of Massachusetts allegedly results in a prohibiti on on the cross-border supply of gambling and betting 
services.   
Minnesota 
6.233  Antigua notes in its submissions that it incl uded in its Panel request a "huge number of 
American laws" that together "create the total ban"  of the cross-border supply of gambling and betting 
                                                      
787 See Antigua's second oral statement paras. 11–18. 
788 Footnote 4 of Antigua's second oral statement. 
789 Exhibit AB-119, p. 4. 
790 We note that the Panel request refers to "La. Rev. Stat. Ann. § 14:90.-4".  We understand this 
reference to include §§ 14:90.0-14:90.4 and, therefore, encompasses § 14:90.3. 
791 Antigua's first oral statement, para. 20. 
792 Exhibit AB-84, p. 18. 
793 Exhibit AB-84, footnote 15. WT/DS285/R 
Page 192  
 
services.
794  In making this submission, Antigua refers  through a footnote to a number of exhibits, 
which it says contain "the text of all relevant laws  listed in our Panel request, together with brief 
summaries of these laws."  Antigua refers, inter alia , to Exhibit AB-88, which contains Antigua's 
summary of the state laws listed in its Panel request  including those pertaining to Minnesota.  Antigua 
also refers to Exhibit AB-99, which contains the text of those laws.  These exhibits do not, in our 
view, indicate according to which particular provi sion and how the law of Minnesota results in a 
prohibition on the cross-border supply of gambling a nd betting services.  However, in its reply to a 
question posed by the Panel, Antigua refers to le gislative provisions, their application and relevant 
practice that Antigua submits are "all elements of the total ban".795  In making this statement, Antigua 
includes a footnote reference to Exhibit AB-96.  E xhibit AB-96 contains a statement by the Minnesota 
Attorney General on Internet jurisdiction,  which states in relevant part that: 
"Minnesota residents should be aware that  it is unlawful to make a bet through 
Internet gambling organizations.  Minnesota law makes it a misdemeanour to place a bet unless done pursuant to an exempted, state-regulated activity, such as licensed 
charitable gambling or the state lottery.  Minnesota Statute Sections 609.75, 
Subdivisions 2 – 3; 609.755(1) (1994).  The Internet gambling organizations are not 
exempted.  Therefore, any person in Minn esota who places a bet through one of these 
organizations is committing a crime." 
6.234  Sections 609.75, Subdivisions 2- 3 and 609.755(1) of Minn. Stat. Ann. are referred to in the 
Panel request and the text of those sections is cont ained in Exhibit AB-99.  The text of §§ 609.75, 
Subdivisions 2-3 and 609.755(1) of Minn. Stat. Ann. can be found in Annex F. 
6.235  We consider that §§ 609.75, Subdivisions 2-3 a nd 609.755(1) of Minn. Stat. Ann. have been 
discussed in Antigua's submissions and those discussions indicate according to which particular provisions and how the law of Minnesota allegedly results in a prohibition on the cross-border supply 
of gambling and betting services.   
New Jersey 
6.236  Antigua states in its submissions that the laws of five states prohibit "unauthorized" 
gambling.796 In making this statement, Antigua points to Exhibit AB-84, which contains summaries of 
five state laws, including those of New Jersey.  In  that Exhibit, as concerns New Jersey, the only 
statements that can be construed as relevant to Antigua's allegation that the cross-border supply of 
gambling and betting services is prohibited are as follows: 
"In New Jersey, only gambling that has b een authorized by public referendum is 
legal, and Internet gambling has not been authorized by public referendum.  The New 
Jersey constitution prohibits the legislat ure from authorizing gambling unless the 
specific type of gambling, any restrictions on  it, and control of it have been approved 
by public referendum. In addition, New Jers ey's ... civil code bans any form of 
unauthorized gambling as well.  As an unauthorized form of gambling, Internet gambling is prohibited under New Jersey law."
797 
6.237  In making these statements, Antigua includes a footnote reference to N.J. Const. Art. 4, 
Sec. VII, paragraph 2798 and to N.J. Code § 2A:40-1.799   
                                                      
794 Antigua's first oral statement, para. 25. 
795 Panel question No. 10. 
796 Antigua's first oral statement, para. 20. 
797 Exhibit AB-84, pp. 19-20. 
798 Exhibit AB-84, Footnote 37. 
799 Exhibit AB-84, Footnote 39.  WT/DS285/R 
 Page 193 
 
 
6.238  Paragraph 2 of N.J. Const. Art. 4, S ec. VII and § 2A:40-1 of the N.J. Code800 are referred to in 
the Panel request and the text of those sections is contained in Exhibit AB-99.  The text of paragraph 
2 of N.J. Const. Art. 4, Sec. VII and § 2A:40-1 of the N.J. Code can be found in Annex F. 
6.239  We consider that paragraph 2 of N.J. Const. Ar t. 4, Sec. VII and § 2A:40-1 of the N.J. Code 
have been discussed in Antigua's submissions a nd those discussions indicate according to which 
particular provisions and how the law of New Jersey  allegedly results in a prohibition on the cross-
border supply of gambling and betting services.   
New York 
6.240  Antigua states in its submissions that the laws of five states prohibit "unauthorized" 
gambling.801  In making this statement, Antigua points to Exhibit AB-84, which contains summaries 
of five state laws, including those of New York.  In that Exhibit, as concerns New York, the only 
statements that can be construed as relevant to Antigua's allegation that the cross-border supply of 
gambling and betting services is prohibited are as follows: 
"Unauthorized betting and gambling are illegal in New York. With certain 
exceptions, New York has expressly prohibite d betting in both its constitution and its 
General Obligations Law."802 
6.241  In making these statements, Antigua includes a f ootnote reference to N.Y. Const. Art. I § 9 
and N.Y. Gen. Oblig. L. § 5-401.  Both of these secti ons are listed in the Panel request and the text of 
both sections is contained in Exhibit AB-99.803  The text of § 9 of Art. I of N.Y. Const. and § 5-401 of 
the N.Y. Gen. Oblig. L. can be found in Annex F. 
6.242  We consider that § 9 of Art. I of N.Y. Cons t. and § 5-401 of the N.Y. Gen. Oblig. L. have 
been discussed in Antigua's submissions and those discussions indicate according to which particular 
provisions and how the law of New York allegedly results in a prohibition on the cross-border supply 
of gambling and betting services.   
                                                      
800 We understand that the N.J. Code is equivalent to "N.J. Stat. Ann.", which is the way in which the 
Code is referred to by Antigua in its Panel request. 
801 Antigua's first oral statement, para. 20. 
802 Exhibit AB-84, p. 21. 
803 We note that N.Y. Const. Art. I § 9 is listed in  Antigua's Panel request but the revised request for 
consultations refers to N.Y. Const. Art. II § 9.  We st ated in our response to the US request for preliminary 
rulings that we would definitively determine whether or  not the difference between the reference in the Panel 
request and the revised request for consultations is due to a typographical error after Antigua had completed making its prima facie case.  Antigua has only provided us w ith the text of Art. I § 9 of N.Y. Const. and not Art. 
II § 9.  On  the basis of the text that is available to us, it appears that Antigua intended to refer to N.Y. Const. 
Art. I § 9 rather than Art. II § 9 in its revised reques t for consultations since the former clearly relates to 
gambling.  We understand from Antigua that the latter concerns suffrage (see Antigua's first written submission, 
para. 150).  The United States has not disputed this.  Ac cordingly, we conclude that the discrepancy between the 
references in the Panel request and the revised request  for consultations to the N.Y. Const. is merely 
typographical in nature.  There are also differences between the references in the Panel request and the revised 
request for consultations in respect of the laws for Colo rado and Rhode Island.  However, the differences apply 
to provisions of the laws of these st ates that are not being considered fu rther by the Panel because, as we 
concluded in paragraph 6.215(b) above, Antigua could not and did not make any prima facie demonstration that 
they are inconsistent with the GATS.  Therefore, we do not need to decide whether or not the discrepancies between the references in the Panel request and the revised request for consultations to provisions of the laws of 
these states are merely typographical in nature.  In any case, it is the Panel request and not the request for 
consultations that determines our jurisdiction. WT/DS285/R 
Page 194  
 
South Dakota 
6.243  In its discussion of the federal and state laws applying to the cross-border supply of gambling 
and betting services804, Antigua refers through a footnote to Exhibit AB-119.805  Exhibit AB-119 
contains an article which discusses, inter alia , "The Intersection of States' Rights and Federal 
Interest".  In the context of that discussion, re ference is made to US laws concerning Internet 
gambling.  In particular, the article states: 
"Laws concerning Internet gambling are as varied as the diverse gaming schemes in 
each state jurisdiction, and even states that prohibit Internet gambling may provide 
for exceptions for Internet gambling c onducted by a state regulated and licensed 
gaming operators.  In Nevada, Illinois806 and South Dakota, it may be fairly stated 
that these states have enacted provisions that criminalize unregulated Internet 
gambling but leave a door open for regulated Internet gambling conducted by a 
gaming operator licensed by the respective state."807  
6.244  A footnote to the excerpted paragraph refers to S.D. Codified Laws, §§ 22-25A-1 - 22-25A-
15.  Sections 22-25A-1 - 22-25A-15 of the S.D. Codi fied Laws are referred to in the Panel request and 
the text of these sections is contained in Exhibit AB-99.  The text of §§ 22-25A-1 - 22-25A-15 of the 
S.D. Codified Laws can be found in Annex F. 
6.245  We consider that §§ 22-25A-1 - 22-25A-15 of the S.D. Codified Laws have been discussed in 
Antigua's submissions and those submissions indi cate according to which particular provisions and 
how the law of South Dakota allegedly results in a prohibition on the cross-border supply of gambling 
and betting services.   
Utah 
6.246  Antigua states in its submissions that the laws of five states prohibit "unauthorized" 
gambling.808  In making this statement, Antigua points to Exhibit AB-84, which contains summaries 
of five state laws, including those of Utah.  In th at Exhibit, as concerns Utah, the only statement that 
can be construed as relevant to Antigua's allega tion that the cross-border supply of gambling and 
betting services is prohibited is: "Internet gambling is prohibited in Utah, along with all other forms of 
gambling".809  In making this statement, Antigua includes a footnote reference to Utah Code Ann. 
§ 76-10-1102.   
6.247  Section 76-10-1102 of the Utah Code Ann. is refe rred to in the Panel request and the text of 
that section is contained in Exhibit AB-99.  The te xt of § 76-10-1102 of the Utah Code Ann. can be 
found in Annex F. 
6.248  We consider that § 76-10-1102 of the Utah Code Ann. has been discussed in Antigua's 
submissions and those discussions indicate accordi ng to which particular provision and how the law 
of Utah allegedly results in a prohibition on the cr oss-border supply of gambling and betting services.   
(iv) Summary 
6.249  After making our utmost efforts to accord Antigua's claims "close attention and serious 
analysis", in light of our discussi on above, we have concluded that, among the laws listed in Antigua's 
                                                      
804 See Antigua's second oral statement, paras. 11–18. 
805 Footnote 4 of Antigua's second oral statement. 
806 The laws cited in the Article for Nevada and Illinois are not contained in Antigua's Panel request. 
807 Exhibit AB-119, p. 4. 
808 Antigua's first oral statement, para. 20. 
809 Exhibit AB-84, p. 22.  WT/DS285/R 
 Page 195 
 
 
Panel request, the following have been discussed in Antigua's submissions and those discussions 
indicate according to which particular provisions and how the laws result in a prohibition on the 
cross-border supply of gambling and betting services: 
(a) Federal laws: 
(i) Wire Act (18 USC § 1084); 
(ii) Travel Act (18 USC § 1952); and 
(iii) Illegal Gambling Business Act (18 USC § 1955).   
(b) State laws: 
(i) Colorado: § 18-10-103 of the Colorado Revised Statutes; 
(ii) Louisiana: § 14:90.3 of the La. Rev. Stat. Ann.;   
(iii) Massachusetts: § 17A of chapter 271 of Mass. Ann. Laws; 
(iv) Minnesota: §§ 609.75, Subdivisions 2 – 3 and 609.755(1) of Minn. Stat. Ann; 
(v) New Jersey:  paragraph 2 of N.J. Const.  Art. 4, Sec. VII and § 2A:40-1 of 
N.J. Code; 
(vi) New York: § 9 of Art. I of N.Y. Const. and § 5-401 of the N.Y. Gen. 
Oblig. L.;  
(vii) South Dakota: §§ 22-25A-1 - 22-25A-15 of the S.D. Codified Laws; and 
(viii) Utah: § 76-10-1102 of the Utah Code Ann. 
(d) "Measures ... affecting trade in services"  
6.250  The threshold question that must be addressed in determining whether or not the GATS is 
applicable to the measures identifie d above in paragraph 6.249 is wh ether those measures "affect trade 
in services" within the meaning of Article I:1 of  the GATS.  This threshold question must be 
addressed regardless of the specific Article of the GA TS that is being invoked in support of a claim 
that the GATS has been violated. 
6.251  The Appellate Body in EC – Bananas III  indicated that the expression "measures ...affecting 
trade in services" in Article I:1 is to be interpreted broadly.810  Further, the Appellate Body in that case 
upheld the Panel's interpretation of that expression as meaning: 
"... no measures are excluded a priori from the scope of the GATS as defined by its 
provisions. The scope of the GATS encompasses any measure of a Member to the extent it affects the supply of a service re gardless of whether such measure directly 
governs the supply of a service or whether it regulates other matters but nevertheless affects trade in services."
811  
                                                      
810 Appellate Body Report on EC – Bananas III , para. 220. 
811 Appellate Body Report on EC – Bananas III , para. 220 citing the Panel Report on EC – Bananas III , 
para. 7.285. WT/DS285/R 
Page 196  
 
6.252  There is no reason why measures adopted by regional and local governments and authorities 
cannot a priori  "affect the supply of a service" within the m eaning of Article I:1 of the GATS, even if 
such measures cannot be enforced extraterritorially. 
6.253  This being said, whether a measure "affecting tr ade in services" within the scope of the GATS 
in accordance with Article I:1 is inconsistent with one or more provisions of the GATS is a distinct 
matter which calls for a separate determina tion under the relevant GATS provisions. 
6.254  In our view, the measures identified above in  paragraph 6.249 necessarily affect trade in 
services within the meaning of Article I:1 of the GATS because, as we find below in paragraphs 6.360 
- 6.418, they entail prohibitions on the s upply of gambling and betting services.   
6.255  We will consider in the following sections of our Report whether Antigua has met its prima 
facie burden in proving that each of the measures id entified above in paragra ph 6.249 are inconsistent 
with the various Articles of the GATS that Antigua  has invoked.  Where relevant and necessary, we 
will also make reference to the court cases in which the relevant provisions of the Wire Act, Travel 
Act and Illegal Gambling Business Act were applied,  the law enforcement actions against financial 
intermediaries and media companies and the stat ements by government officials advising national 
advertisers not to allow advertising for off-shor e Internet gambling services as illustrative of the 
"practice" of US authorities regarding their inte rpretation and application of the above laws.   
D. C
LAIMS OF VIOLATION OF THE UNITED STATES ' MARKET ACCESS CO MMITMENT UNDER 
ARTICLE  XVI OF THE GATS  
1. Claims and main arguments of the parties 
6.256  Antigua argues that since the United States ha s scheduled a full market access commitment 
for the cross-border supply of gambling and bettin g services but maintains and enforces measures 
prohibiting the cross-border supply of gambling and betting services, and that those measure(s) are 
inconsistent with Article XVI:1 of the GATS.812  Antigua submits that the United States' "total 
prohibition" on the cross-border supply of gambling and betting services also violates 
Article XVI:2(a) and 2(c)813 because the "total prohibition" amounts to a zero quota.  Antigua adds 
finally that the application of Article XVI:2(a) and (c) to a non-numerical quota, such as the alleged 
"total prohibition", is mandated by the principle of  effective treaty interpretation and by the 1993 
Scheduling Guidelines.814 
6.257  According to the United States, contrary to th e situation under Article XI of the GATT 1994, 
under the GATS, a "prohibition" is not ipso facto  inconsistent with Article XVI.815  The United States 
submits that the substance of Article XVI is contai ned in Article XVI:2, which deals with the subject-
matter of restrictions and their precise form and/or manner of expression, and that it is a closed list.816  
The United States argues that the restrictions it ma intains on the remote supply of some gambling and 
betting services are not restrictions of the type covered by Article XVI:2 of the GATS because the subject-matter of the US restrictions refers to th e character of the activity involved rather than the 
"number of service suppliers" or the "total number of  service operations or total quantity of service 
output", being the criteria listed under subparagraphs (a) and (c) of Article XVI:2 respectively.
817  
                                                      
812 Antigua's first written submission, para. 181. 
813 Antigua's first written submission, para. 184. 
814 See Antigua's second written submission, paras. 36 -38 and Antigua's reply to Panel question No. 15. 
815 United States' reply to Panel question No. 15. 
816 United States first written submission, para. 81. 
817 United States' second written submission, paras. 21-25.  WT/DS285/R 
 Page 197 
 
 
Finally, the United States submits that, in the United States, there is no "total prohibition" or any "zero 
quota" since the cross-border supply of some gambling and betting services is permitted.818   
2. Relevant GATS provisions 
6.258  Article XVI of the GATS provides as follows: 
"1. With respect to mark et access through the modes of supply identified in 
Article I, each Member shall accord services and service suppliers of any other 
Member treatment no less favourable than  that provided for under the terms, 
limitations and conditions agreed  and specified in its Schedule.819 
2. In sectors where market-access comm itments are undertaken, the measures 
which a Member shall not maintain or adopt either on the basis of a regional 
subdivision or on the basis of its entire te rritory, unless otherwise specified in its 
Schedule, are defined as: 
(a) limitations on the number of service suppliers whether in the 
form of numerical quotas, monopolies, exclusive service suppliers or the requirements of an economic needs test; 
(b) limitations on the total value of service transactions or assets 
in the form of numerical quotas or the requirement of an economic needs test; 
(c) limitations on the total number of service operations or on 
the total quantity of service output expressed in terms of designated numerical units in the form of quotas or the requirement of an 
economic needs test;
820 
(d) limitations on the total number of natural persons that may be 
employed in a particular service sector or that a service supplier may employ and who are necessary for, an d directly related to, the supply 
of a specific service in the fo rm of numerical quotas or the 
requirement of an economic needs test; 
(e) measures which restrict or require specific types of legal 
entity or joint venture through which a service supplier may supply a service;  and 
(f) limitations on the participation of foreign capital in terms of 
maximum percentage limit on forei gn shareholding or the total value 
of individual or aggregate foreign investment." 
                                                      
818 United States' second written submission, para. 26. 
819 (original footnote ) If a Member undertakes a market-access co mmitment in relation to the supply of 
a service through the mode of supply referred to in subparagraph 2(a) of Article I and if the cross-border 
movement of capital is an essential part of the service itself, that Member is ther eby committed to allow such 
movement of capital.  If a Member undertakes a market-access commitment in relation to the supply of a service 
through the mode of supply referred to in subparagraph 2( c) of Article I, it is thereb y committed to allow related 
transfers of capital into its territory. 
820 (original footnote ) Subparagraph 2(c) does not cover measures of a Member which limit inputs for 
the supply of services. WT/DS285/R 
Page 198  
 
3. Assessment by the Panel 
(a) Introduction 
6.259  In light of the claims and arguments of the par ties, it is necessary to determine the nature and 
scope of the obligations contained in Article XVI of the GATS.  In order to do so, the Panel will need 
to examine whether Article XVI:1 contains obliga tions that are different from those contained in 
Article XVI:2 and whether Article XVI:2 exhaustivel y defines the types of restrictions that are 
prohibited by Article XVI.  In the specific circum stances of the present dispute, the Panel will also 
need to ascertain the legal impli cations of the inscription by a Me mber of the word "None" in the 
market access column of its schedule for mode 1 for a specific sector or sub-sector.   
6.260  In particular, the Panel will need to determin e whether such a Member is entitled to maintain 
a measure which prohibits one, several or all means of delivery included in mode 1; whether such a 
measure is inconsistent with the first and the second paragraphs of Article  XVI of the GATS; and 
whether a restriction on some services covered in a scheduled sector or sub-sector amounts to a 
violation of Article XVI. 
6.261  In this dispute, Antigua claims that its ma rket access rights under Ar ticle XVI for gambling 
and betting services in the United States are impaired  by the US measures at issue.  We examine the 
United States' obligations under Article XVI hereafte r.  To do so, the Panel will, in the light of 
Article 3.2 of the DSU and the Vienna Convention, interpret the text of Article XVI of the GATS in 
good faith, in accordance with the ordinary meaning to  be given to the terms of this provision when 
read in their context and in the light of the object and purpose of the GATS and those of the WTO 
Agreement.    
(b) Interpretation and sc ope of Article XVI 
(i) The first paragraph of Article XVI 
6.262  In the present dispute, Antigua claims that a blanket prohibition on the remote supply of 
gambling and betting services is contrary to the US Schedule, which contains the inscription "None" in the market access column for mode 1 in respect of the specific sub-sector 10.D.  Therefore, 
according to Antigua, the measures at issue provide l ess favourable treatment than that provided for in 
the US Schedule in a manner inconsistent with the first paragraph of Article XVI.  The United States 
responds that the second paragraph of Article XVI e xhaustively defines the types of restrictions that 
are prohibited by Article XVI.  We understand the United States' argument to imply that when a 
Member has inscribed the word "None " in its market access column for mode 1, it signifies that the 
Member has specified in it s schedule none of the limitations or me asures listed in subparagraphs (a) to 
(f) of Article XVI:2 and is, accordingly, prohibited from adopting or maintaining any such limitations 
or measures.   
6.263  In the Panel's view, the ordinary meaning of the terms contained in the first paragraph of 
Article XVI imposes an obligation on Members to provide, with respect to market access, no less 
favourable treatment than that provided for in the Members' respective schedules.  The standard of 
"no less favourable" treatment in Article XVI is est ablished by reference to the specific commitments 
inscribed in the market ac cess column of a Member's schedule.  In particular, the first paragraph of 
Article XVI makes clear that Members are bound by the "terms, limitations and conditions" contained 
in the market access column of th eir respective schedules.  A Member must abide by the "terms, 
conditions and limitations" containe d in its schedule and cannot provide, in respect of services and 
services suppliers of other Member s, treatment less favourable th an the minimum treatment it is 
committed to in its schedule for market access.  WT/DS285/R 
 Page 199 
 
 
6.264  The ordinary meaning of the terms used in the first paragraph of Article XVI also indicates 
that nothing would prevent a Member from pr oviding to services and service suppliers of all Members 
treatment more favourable  than that provided for in its schedule or that it provides to its own services 
and service suppliers. 
6.265  The first paragraph of Article XVI also extends  to Members the obligation to provide no less 
favourable treatment than that provided for in their respective schedules, to any other Members , i.e. to  
all WTO Members.  In other words,  the commitments undertaken pursuant to Article XVI are to be 
applied on a non-discriminatory basis.  Therefore, the first paragraph of Article XVI contains a specific expression of the MFN principle of Article II of the GATS.
821   
6.266  When faced with an allegation of violation of Article XVI, a panel must first examine the 
schedule of the challenged Member.  There are thr ee possible inscriptions that can be made in the 
market access column of a Member's schedule:  "Unbound"822, "None" or limitations may be 
inscribed. 
6.267  In the present dispute, the United States  inscrib ed "None" in the market access column of its 
Schedule for mode 1 in respect of gambling and betti ng services.  Since the first step in an analysis 
under the first paragraph of Article XVI is to have regard to the challenged Member's schedule, we 
believe that, with respect to the US Schedule,  we must determine the legal significance under 
Article XVI of the inscription of the word "None " in the market access column for "mode 1". 
"None" inscribed under "Market Access Limitations" 
6.268  The terms of a schedule are to be interpreted as treaty terms.823  All Members' schedules 
include three columns in their respective schedul es:  one entitled "sector or sub-sector", another 
"Limitations on market access" and the third "Limitations on national treatment".824 
Sector or sub-sector Limita tions on market access Limitations on national treatment 
 
D. OTHER RECREATIONAL SERVICES (except sporting)   1) None 
  2) None 
  3) The number of concessions 
available for commercial operations in 
federal, state and local facilities is limited 
  4) Unbound, except as indicated 
in the horizontal section   1) None 
  2) None 
  3) None 
 
  
  4) None 
 
                                                      
821 We note in passing that paragraph 5 of the "Listing of Article II exemptions – Explanatory Note by 
the Secretariat" (the so-called Scheduling Guidelines on MFN Exemptions) states that:  "Therefore if a Member 
takes an MFN exemption in a sector where specific commitments are undertaken, the exemption would allow 
that Member to deviate from its obligations under paragraph 1 of Article II but not from its commitments under Articles XVI or XVII.  Acco rdingly, a Member undertaking a market  access or a national treatment commitment 
in a sector must accord th e stated minimum standard of treatment specified in its schedule to all other 
Members.":  Job No. 2061 dated 15 September 1993. 
822 S/L/92, para. 47, states that:  "In some situations , a particular mode of supply may not be technically 
feasible.  An example might be the cross-border supply of hair-dressing services.  In these cases the term 
UNBOUND* should be used.  The asterisk should refer to a footnote which states 'Unbound due to lack of 
technical feasibility'.  The term may not be used as an entry in the national treatment column for modes 1 and 2 
when, for the same service,  there is a market access co mmitment.  Where the mode of supply thought to be 
inapplicable is in fact applicable, or becomes so in the future, the entry means 'unbound'." 
823 Appellate Body Report on EC – Computer Equipment , para  84. 
824 The fourth column (Additional commitments) has not been reproduced here. WT/DS285/R 
Page 200  
 
Source:  The United States of America, Schedule of Sp ecific Commitments, GATS/SC/90, 15 April 1994, p. 72 
(extract). 
 
6.269  As is evident from the above excerpt of the US  Schedule, the word "None" is a treaty term 
since it is in its Schedule.  Further, "None" is  inscribed under "Limitations on market access".  
However, "None" is not defined in the GATS nor in any Members' schedules.   
6.270  In the absence of any treaty definition of th e word "None" when inscribed in a Member's 
schedule under "Limitations on market access", and pur suant to Articles 31.1 and 31.2 of the Vienna 
Convention, the Panel will, as a starting point, resort, to  the dictionary definitions of these terms.  In 
so doing, the Panel is well aware of the limitations of dictionary definitions to identify the ordinary 
meaning of the terms of a treaty.825 
6.271  The term "none" is defined in the New Shorter Oxford Dictionary  as "no one not any one of a 
number of persons or things".826  The Webster New Encyclopedic Dictionary  defines it as "not any 
such thing or person".827  T h e  New Little Oxford Dictionary  defines it as "not any of...".828  T h e s e  
definitions indicate that the Panel has to identif y what an inscription of the word "None" in a 
Member's schedule relates or refers to. 
6.272  In the context of the present dispute, the inscrip tion of the word "None" refers to "Limitations 
on market access".  Therefore, the inscription of th e word "None" in the mark et access column of the 
US Schedule would appear to mean "none of the limitations on market access".   
6.273  The ordinary meaning of "limitations", as defined in the New Shorter Oxford Dictionary , is "a 
point or a respect, in which a thing, an d especially a person's ability, is limited".829  The Webster New 
Encyclopedic Dictionary  defines it as "something that limits"830 and the New Little Oxford Dictionary  
as "limiting or being limited; lack of ability ...".831 
6.274  The concept of "market access" was fundamental to GATT law and practice;  it is still so 
under the WTO Agreement. 832  In the Dictionary of Trade Policy Terms, "market access" is defined 
as: 
"[O]ne of the most basic concepts in intern ational trade.  It describes the extent to 
which a good or a service can compete with locally-made products in another market.  In the WTO framework it as [sic] a le galistic terms outlining the government-
imposed conditions under which a product may enter a country under non-
discrimination conditions".
833 
6.275  On the basis of the above dictionary definiti ons, "Limitations on market access" would appear 
to include provisions or conditions limiting the ability  of services and service suppliers to gain access 
to the market of that Member.  However, in light  of the specific and specialized context where these 
                                                      
825 Appellate Body Reports on EC – Asbestos , para. 92; and Canada – Aircraft , para. 153.  
826 New Shorter Oxford Dictionary , 1993, p. 1936. 
827 Webster New Encyclopedic Dictionary , 1993, p. 681. 
828 New Little Oxford Dictionary, 1989, p. 364. 
829 New Shorter Oxford Dictionary, 1993, p. 1592. 
830 Webster New Encyclopedic Dictionary , 1993, p. 580. 
831 New Little Oxford Dictionary , 1989, p. 313. 
832 Article XVI:1 of the WTO Agreement provides th at: "Except as otherwise provided under this 
Agreement or the Multilateral Trade Agreements, the WTO shall be guided by the decisions, procedures and customary practices followed by the CONTRACTING PARTIES to GATT 1947 and the bodies established in 
the framework of GATT 1947." 
833 Dictionary of Trade Policy Terms (2nd ed.), Walter Goode, 1998, p. 176.  WT/DS285/R 
 Page 201 
 
 
terms are used, the Panel believes that the dictionary  definitions are not particularly enlightening or 
informative.834 
6.276  Pursuant to Articles 31.1 and 31.2 of the Vi enna Convention, we turn to the legal context  of 
Article XVI in our effort to interpret the first para graph of Article XVI and relevant inscriptions in a 
Member's schedule. 
6.277  The 1993 Scheduling Guidelines, which are part  of the context for the GATS Agreement835, 
are also part of the context of Article XVI and sh ed light on the meaning of "None".  Paragraphs 23 
and 24 of the 1993 Scheduling Guidelines cont ain the following pertinent comments on the 
inscription of the term "None" in the market access column of a Member's schedule: 
"23. Since the terms used in a Memb er's schedule create legally binding 
commitments, it is important that those expressing presence or absence of limitations 
to market access and national treatment be uniform and precise.  Depending on the extent to which a Member has limited market access and national treatment, for each commitment with respect to each mode of supply, four cases can be foreseen: 
(a) Full commitment 
24. In this case the Member does not seek in any way to limit market access or 
national treatment in a given sector and mode of supply through measures inconsistent with Articles XVI and XVII.  The Member in this situation should mark 
in the appropriate column:  NONE.  However, any relevant limitations listed in the horizontal section of the schedule will still apply." 
6.278  According to paragraph 24 of the 1993 Scheduling Guidelines, by inscription of the word 
"None" in the market access column  of a Member's schedule, a Member cannot adopt or maintain any 
measure inconsistent with Article XVI.  The word "None" in the market access column means that the 
Member has undertaken a full market access commitment .  "Full market access" is defined in 
paragraph 4 of the 1993 Scheduling Guidelines as follows:  
"A Member grants full mark et access in a given sector and mode of supply when it 
does not maintain in that sector and mode any of the types of measures listed in 
Article XVI.  The measures listed comprise four types of quantitative restrictions (subparagraphs a-d), as well as limitations on  forms of legal entity (subparagraph e) 
and on foreign equity participation (subpa ragraph f).  The list is exhaustive and 
includes measures which may also be di scriminatory according to the national 
treatment standard (Article XVII).  The quantitative restrictions can be expressed 
numerically, or through the criteria specifi ed in subparagraphs (a) to (d);  these 
criteria  do not relate to the quality of the service supplied, or to the ability of the supplier to supply the service (i.e. technical standards or qualification of the supplier)." 
6.279  Thus, when a Member has the inscription "None" in  the market access column of its schedule, 
it must maintain "full market access" within the mean ing of the GATS, i.e. it must not maintain any of 
the six limitations and measures listed in  the second paragraph of Article XVI. 
                                                      
834 Appellate Body Reports on EC – Asbestos , para. 92; and Canada – Aircraft , para. 153.  
835 We recall our conclusion in para. 6.82 above. WT/DS285/R 
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"Mode 1" and its inherent "means of delivery" 
6.280  In the present dispute, the Panel has to interp ret the meaning of the word "None" when it has 
been inscribed under "Limitations on market access" for mode 1 .  The Panel is of the view that it 
must, therefore, consider the nature of a market access commitment for mode 1, since Antigua claims 
that the challenged US measures are contrary to  the US market access commitment for mode 1 in 
respect of sub-sector 10.D. 
6.281  Article I:2(a) of the GATS defines "mode 1", otherwise referred to as "cross-border", as the 
supply of a service "from the territory of one Member into the territory of any other Member".  The definition does not contain any indication as to the means that can be used to supply services cross-
border.  This indicates, in our view, that the GATS does not limit the various technologically possible 
means of delivery under mode 1. 
6.282  As for relevant context for identifying the m eans of delivery included under Article I:2(a), 
paragraph 18 of the Scheduling Guidelines states that: 
"The four modes of supply listed in the schedules correspond to the scope of the 
GATS as set out in Article I:2.  The modes are essentially defined on the basis of the 
origin of the service supplier and consumer , and the degree and type of territorial 
presence which they have at the moment the service is delivered." 
6.283  In respect of supply by mode 1, or "cross-border" supply, the chart entitled "Modes of 
Supply" contained in the 1993 Scheduling Guidelines states:  
"Service supplier not present within the territory of the Member  
Service delivered within the territory of the Member, from the territory of another 
Member" 
6.284  Paragraph 19 of the Scheduling Guide lines defines "cross-border supply" as: 
"International transport, the supply of a service through telecommunications or mail, 
and services embodied in exported goods (e.g. a computer diskette, or drawings) are all examples of cross-border supply, since the service supplier is not present within 
the territory of the Member wh ere the service is delivered." 
6.285  The Panel concludes that mode 1 under th e GATS encompasses all possible means of 
supplying services from the territory of one WTO Member into the territory of another WTO Member.  Therefore, a market access commitment for mode 1 implies the right for other Members' suppliers to supply a service through all means of de livery, whether by mail, telephone, Internet etc., 
unless otherwise specified in a Member's Schedule.  We note that this is in li ne with the principle of 
"technological neutrality", which seems to be largely shared among WTO Members.
836  Accordingly, 
where a full market access commitment has been made  for mode 1, a prohibition on one, several or all 
means of delivery included in this mode 1 woul d be a limitation on market  access for the mode. 
                                                      
836 Work Programme on Electronic Commerce – Progress Report to the General Council , adopted by 
the Council for Trade in Services on 19 July 1999, S/L/74, 27 July 1999. para. 4:  "It was also the general view that the GATS is technologically neutral in the sense that it does not contain any provisions that distinguish 
between the different technological means through which a services may be supplied."  The United States seems 
to agree as is evident from the following comments made by it in a submission contained in WT/GC/16, p. 3: "there should be no question that where market access and national treatment commitments exist, they 
encompass the delivery of th e service through electronic means, in keeping with th e principle of technological 
neutrality."  WT/DS285/R 
 Page 203 
 
 
6.286  In our view, if one, several or all means of delivery cross-border are prohibited, the 
opportunities for foreign suppliers using those mean s of delivery to supply services cross-border to 
gain access to foreign markets are clearly reduced, if not nullified.  If a Member desires to exclude 
market access with respect to the supply of a servi ce through one, several or all means of delivery 
included in mode 1, it should do so explicitly in its schedule.  The Panel considers that any other 
interpretation would result in the nullification of be nefits of a commitment made for mode 1, as 
Members could, through regulations, impose restricti ons or prohibitions essentially on one, several or 
all means of delivery. 
6.287  To sum up, we conclude that mode 1 includes all means of delivery.  We are of the view that 
when a Member inscribes the word "None" in the market access column of its schedule for mode 1, it 
commits itself not to maintain measures which prohibit the use of one, several or all means of delivery 
under mode 1 in a committed sector or sub-sector.  This is especially so in sectors and sub-sectors where cross-border supply is effected essentially  if not exclusively through the Internet.  
Restrictions with respect to certain services covered in a sector or sub-sector 
6.288  In this dispute, the United States argues that it does not prohibit the cross-border supply of all 
"gambling and betting services" because it allows th e cross-border supply of services such as "odds-
making" or broadcasting of horse races.   Antigua is of the view that a commitment in a given sector or 
sub-sector covers all services that come within that sector or sub-sector.   
6.289  Article XXVIII(e) of the GATS defines "sector" to mean: 
"(i) with reference to a specific commitment, one or more, or all, subsectors of 
that service, as specified in a Member's Schedule,  
(ii) otherwise, the whole of that service sector, including all of its subsectors." 
6.290  In our view, if a Member makes a market access commitment in a sector or sub-sector, that 
commitment covers all services that fall within the scope of that sector or sub-sector.  A Member does not fulfil its GATS obligations if it allows market access for only some of the services covered by a 
committed sector or sub-sector while prohibiting all others.  If a Member wishes to restrict market 
access with respect to certain services falling within the scope of a sector or sub-sector, it should set 
out the restrictions or limitations on access in the appropriate place in the Member's schedule.  Indeed, a specific commitment in a given sector or sub-sector is a guarantee that the whole  of that sector, i.e. 
all services included in that sector or sub-sector are covered by the commitment.  Any other 
interpretation would make market access commi tments under the GATS largely meaningless.   
6.291  The context  of the first paragraph of Article XVI includes the second paragraph of 
Article XVI.  We proceed, therefore, to ex amine the second paragraph of Article XVI.   
(ii) The second paragraph of Article XVI  
6.292  Article XVI:2 provides in relevant part that: 
"In sectors where market-access commitments  are undertaken, the measures which a 
Member shall not maintain or adopt either  on the basis of a regional subdivision or on 
the basis of its entire territory, unless otherwise specified in its Schedule, are defined 
as: 
(a) limitations on the number of service suppliers .... (b) limitations on the total value of service transactions ... WT/DS285/R 
Page 204  
 
(c) limitations on the total num ber of service operations ... 
(d) limitations on the total number of natural persons ... 
(e) measures which restrict or require specific types of legal 
entity ...;  and 
(f) limitations on the participation of foreign capital ..." 
6.293  On the basis of the ordinary meaning  of the terms contained in Article XVI:2, the purpose of 
the second paragraph of Article XVI is  to define the types of limita tions and measures which shall not 
be maintained or adopted in scheduled sectors or sub-sectors, unless otherwise indicated in the relevant Member's schedule.  Paragraph 2 also in forms Members of the manner in which they should 
schedule such limitations and measures.   
6.294  We now turn to the context for the interpretation of Article XVI:2 .  First, confirmation of our 
interpretation is to be found in Article XX:1 of the GATS, which requires Members to set out in their 
schedules "terms, limitations and conditions on market access".  This language, particularly the use of 
the word "limitations", denotes the limitations identif ied in Article XVI:2(a),(b),(c),(d) and (f).  The 
words "terms" and "conditions" refer to the "measu res" contemplated by Article XVI:2(e) and the 
chapeau of Article XVI:2 (i.e. the possibility to  make a commitment on the basis of a regional 
subdivision of the territory). 
6.295  Secondly, footnote 2 of the 1993 Scheduling Guidelines states that: 
"The term 'limitations' will be used throug hout this Note to refer to the 'terms', 
'conditions', 'limitations' and 'qualificati ons' used in Article XVI and XVII of the 
GATS."   
6.296  Therefore, the 1993 Scheduling Guidelines would seem to indicate that no difference exists 
between the "terms, conditions and limitations " contained in a Member's schedule and the 
"limitations" and "measures" that it is entitled to  maintain if scheduled, pursuant to the second 
paragraph of Article XVI.
837 
6.297  Thirdly, paragraph 4 of the 1993 Scheduling Guidelines provides in relevant part that: 
"A Member grants full mark et access in a given sector and mode of supply when it 
does not maintain in that sector and mode any of the types of measures listed in Article XVI.  The measures listed comprise four types of quantitative restrictions (subparagraphs a-d), as well as limitations on  forms of legal entity (subparagraph e) 
and on foreign equity particip ation (subparagraph f).  The list is exhaustive  and 
includes measures which may also be di scriminatory according to the national 
treatment standard (Article XVII)."  (emphasis added) 
6.298  It seems clear from the 1993 Scheduling Guidelines that the list of limitations in paragraph 2 
of Article XVI is an exhaustive list.  Thus, th e types of measures listed in the second paragraph 
exhaust the types of market access restrictions prohi bited by Article XVI, in particular by the first 
paragraph of Article XVI.  Paragr aph 4 of the 1993 Scheduling Guid elines therefore confirms that 
paragraph 2 of Article XVI exhaustively defines th e limitations and measures that are prohibited by 
                                                      
837 The footnote suggests that this understanding is a reading convention for the purpose of the 
Scheduling Guidelines.  However, since the 1993 Schedu ling Guidelines are context for the GATS, we believe 
that this understanding informs the interpretation of the term "limitation" in the GATS itself.  In this regard, we 
note that this understanding also applies to GATS schedules which follow the format established in the 1993 
Scheduling Guidelines and which refers  to "limitations on market access".  WT/DS285/R 
 Page 205 
 
 
Article XVI, unless scheduled.  In that sense, paragraph 2 of Article XVI complements the first paragraph of that Article. 
(iii) The scope of the first and second paragraphs of Article XVI 
Ordinary meaning 
6.299  As discussed previously, the ordinary meaning of the terms contained in the first and second 
paragraphs of Article XVI means that the only lim itations and measures falling within the scope of 
Article XVI are those listed in the second paragraph of Article XVI. 
6.300  We must, as required by Articles 31.1 and 31. 2 of the Vienna Convention, continue our 
investigation for the interpretation of Article XVI by looking at the context  of the first and second 
paragraphs of Article XVI, namely  other provisions of the GATS.  In particular, we will look at the 
relationship between Articles XVI, XVII, XVIII and para graphs 4 and 5 of Article  VI of the GATS, as 
this may assist the Panel in determining the nature  and the scope of the obligations contained in 
Article XVI.  We believe that these other provisions ma y give us indications as to the outer limits of 
Article XVI. 
The context: the relationship between Articles XVI, XVII, XVIII, VI:4 and 5 
6.301  Articles VI:4 and VI:5 provide that: 
"4. With a view to ensuring that measur es relating to qualification requirements 
and procedures, technical standards and licensing requirements do not constitute 
unnecessary barriers to trade in services, th e Council for Trade in Services shall, 
through appropriate bodies it may establish,  develop any necessary disciplines.  Such 
disciplines shall aim to ensure that such requirements are, inter alia : 
 (a) based on objective and transparent criteria, such as 
competence and the ability to  supply the service; 
 (b) not more burdensome than necessary to ensure the quality of 
the service; 
 (c) in the case of licensing procedures, not in themselves a 
restriction on the supply of the service. 
5. (a) In sectors in which a Member has undertaken specific commitments, 
pending the entry into force of disciplines developed in these sectors pursuant to paragraph 4, the  Member shall not ap ply licensing and qualification requirements 
and technical standards that nullify or impair such specific commitments in a manner which: 
(i) does not comply with the criteria outlined in 
subparagraphs 4(a), (b) or (c);  and 
(ii) could not reasonably have been  expected of that Member at 
the time the specific commitments in those sectors were made. WT/DS285/R 
Page 206  
 
 (b) In determining whether a Member is in conformity with the obligation under paragraph 5(a), account shall be taken of international standards of 
relevant international organizations
838 applied by that Member." 
6.302  The object of Article VI is to provide disci plines on domestic regulations or measures that 
regulate qualification requirements and procedures,  technical standards and licensing requirements 
while the object of Article XVI is to prohibit mark et access limitations, as defined in Article XVI:2, 
unless scheduled. 
6.303  Measures that constitute market  access limitations within the meaning of Article XVI and 
which, unless scheduled must be eliminated , are to be distinguished from measures that impose 
qualification requirements and procedures, techni cal standards and licensing requirements, which can 
be maintained  so long as they do not constitute "unnecessary barriers to trade in services", pursuant to 
the criteria contained in Article VI:5 or pursuant to the criteria to be developed by the Council for 
Trade in Services pursuant to Article VI:4. 
6.304  Domestic regulations falling within the scope of Articles VI:4 or VI:5 of the GATS are, 
nonetheless, likely to have an effect  on market access to the extent th at services and service suppliers 
from other WTO Members which do not, or cannot, comply with such regulations will not have 
access to the relevant Member's market.  Yet, non- discriminatory measures relating to, for instance, 
the quality of the service supplied or the ability of  the supplier to supply the service (i.e. technical 
standards or qualification of the supplier) can be main tained provided that they conform to criteria to 
be developed by the Council for Trade in Services pu rsuant to Article VI:4 and, in the meantime, to 
the criteria contained in Article VI:5.   
6.305  Under Article VI and Article XVI, measures are e ither of the type covered by the disciplines 
of Article XVI or are domestic regulations rela ting to qualification requirements and procedures, 
technical standards and licensing requirements subject to the specific provisions of Article VI.  Thus, 
Articles VI:4 and VI:5 on the one hand and XVI on the other hand are mutually exclusive. 
6.306  Therefore, qualification requirements and procedures, technical standards and licensing 
requirements covered by the disciplin es of Article VI:4 and VI:5 could not be evidence that a Member 
is providing less favourable treatment than that provi ded in its schedule contrary to Article XVI, even 
when "None" has been inscribed in the mark et access column of  a Member's schedule. 
6.307  While the GATS does not explicitly address the re lationship between Article XVI and VI, the 
1993 Scheduling Guidelines, as part of the cont ext for interpreting the GATS, contain some 
discussion on this issue: 
"4.  [...]  The quantitative restrictions ca n be expressed numerically, or through the 
criteria specified in subparagraphs (a) to (d);  these criteria  do not relate to the 
quality of the service supplied, or to the ability of the supplier to supply the service (i.e. technical standards or qualification of the supplier). 
5.  It should be noted that the quantitative restrictions specified in subparagraphs (a) 
to (d) refer to maximum limitations.  Minimum requirements such as those common 
to licensing criteria (e.g. minimum capital requirements for the establishment of a corporate entity) do not fall within the scope of Article XVI.  If such a measure is discriminatory within the meaning of Article XVII and, if it cannot be justified as an 
exception, it should be scheduled as a limitation on national treatment.  If such a measure is non-discriminatory, it is subject to the disciplines of Article VI:5.  Where 
                                                      
838 (original footnote ) The term "relevant international organizations" refers to international bodies 
whose membership is open to the relevant bodies of at least all Members of the WTO.  WT/DS285/R 
 Page 207 
 
 
such a measure does not conform to these disciplines, and if it cannot be justified as an exception, it must be brought into conf ormity with Article VI:5 and cannot be 
scheduled."
839 
6.308  The Revised Scheduling Guidelines of 2001840 contain an Annex (4) entitled "Discussion of 
Matters Relating to Articles XVI and XVII of the GATS in Connection with the Disciplines on 
Domestic Regulation in the Accountancy Sector – In formal Note by the Chairman".   Paragraphs 2 
and 3 of this Annex shed light on the relations hip between Articles XVI and VI of the GATS and 
seem to confirm our interpretation that, based on th e ordinary meaning of their respective terms, 
Articles VI and XVI are mutually exclusive.   
"In the course of work to develop multila teral disciplines on domestic regulation in 
the accountancy sector, pursuant to paragraph 4 of Article VI of the GATS, the 
WPPS addressed a wide range of regulatory measures which have an impact on trade 
in accountancy services. In discussing the structure and content of the new disciplines, it became clear that some of these measures were subject to other legal 
provisions in the GATS, most notably Articles XVI and XVII.  It was observed that 
the new disciplines developed under Article VI:4 must not overlap with other provisions already existing in the GATS, including Articles XVI and XVII, as this 
would create legal uncertainty.  For this reason, a number of the suggestions for 
disciplines were excluded from the text.  [emphasis added] 
(...) A  Member scheduling commitments under Articles XVI and XVII has the right 
to maintain limitations on market access a nd national treatment and inscribe them in 
its schedule.  On the other hand, the disciplines to be developed under Article VI:4 
cover domestic regulatory measures which are not regarded as market access 
limitations as such, and which do not in principle discriminate against foreign 
suppliers.  They are therefore not subject  to scheduling under Articles XVI and XVII ."  
(emphasis added) 
6.309  The organization of the GATS and, in particular , the disciplines provided for in Part III of the 
GATS entitled "Specific commitments" cast light on the inter-relationship between Articles XVI, 
XVII and XVIII, the last of which can include me asures falling within the scope of Articles VI:4 
and VI:5. 
6.310  In pursuing the progressive liberalization of trade in services, the GATS defines measures that 
constitute restrictions on such trade.  In designing the structure of the GATS, it appears that the 
drafters aimed at liberalizing such restrictions th rough the provisions of Part III of the Agreement, 
which is comprised of Article XVI ("Market Access"), Article XVII ("National Treatment") and Article XVIII ("Additional Commitments").  In our view, these provisions aim at establishing legal obligations in relation to the use of (or rather the need to refrain from using) trade-restrictive 
measures. 
6.311  In drafting Part III of the GATS, the aim seems to have been to capture all types of trade 
restrictions and to establish a mechanism for schedu ling specific commitments in relation to them.  In 
Articles XVI and XVII, specific commitments are defi ned in a way that allows the identification of 
trade restrictions (in other words, limitations).  Therefore, if a Member undertakes a full market 
access or a full national treatment commitment, it must not apply any measure that would be inconsistent with the provisions of those articles.  N onetheless, the drafters seem to have realized that 
there may be other types of restrictions that would not be covered by the disciplines of Articles XVI 
and XVII.  In other words, there could be restricti ons that would not be discriminatory and, therefore, 
                                                      
839 1993 Scheduling Guidelines, paras. 4-5. 
840 2001 Scheduling Guidelines, S/L/92. WT/DS285/R 
Page 208  
 
would escape the provisions of Article XVII;  nor would they be one of the six types of measures referred to in subparagraphs 2(a)  to (f) of Article XVI.  Apparen tly, it was considered that such 
measures would mainly, but not exclusively, relate to qualifications, standard s and licensing matters.  
At the same time, it appears that it may not have b een possible to arrive at a clear definition of the 
restrictive nature of such measures so that discip lines similar to those of Articles XVI and XVII could 
be established.  It seems, therefore, that it was c onsidered best to simply provide a legal framework 
for Members to negotiate and schedule specific commitments that they would define, on a case-by-case basis, in relation to any measures that do not fa ll within the scope of Article XVI or XVII.  That 
framework appears to have been provided in Article XVIII.
841 
6.312  It also appears that the conception of Article  XVIII was linked to that of paragraph 4 of 
Article VI which establishes a work programme for the development of disciplines to ensure that 
measures relating to qualification requirements an d procedures, technical standards and licensing 
requirements and procedures do not constitute unnecessary barriers to trade in services.842   
6.313  Apparently, these provisions are at the heart of the notion of progressive liberalization, which 
finds expression in the preamble of the GATS and in  Article XIX, paragraphs 1 and 3.  Progressive 
liberalization entails including more sectors in Members' schedules and reduction or elimination of 
limitations, terms, conditions and qualifications on market access and national treatment through 
successive rounds of negotiations.   
Object and purpose of the GATS 
6.314  Our interpretation of the scope of the first a nd second paragraphs of Article XVI based on the 
ordinary meaning of the words and the context of Article XVI is confirmed by the object and purpose 
of the GATS.  The second, third and fourth para graphs of the preamble to the GATS state that: 
"Wishing  to establish a multilateral framework of  principles and rules for trade in 
services with a view to the expansion of such trade under conditions of transparency  
and progressive liberalization  and as a means of promoting the economic growth of 
all trading partners and the devel opment of developing countries;  
Desiring  the early achievement of progressively higher levels of liberalization of 
trade in services through successive rounds of multilateral negotiations aimed at 
promoting the interests of all participants  on a mutually advantageous basis and at 
securing  an overall balance of rights and oblig ations, while giving due respect to 
national policy objectives ;  
Recognizing  the right of Members to regulate , and to introduce new regulations, on 
the supply of services within their territories in order to meet national policy 
objectives and, given asymmetries existing with  respect to the degree of development 
of services regulations in different countri es, the particular need of developing 
countries to exercise this right ..." (emphasis added) 
6.315  These paragraphs confirm that Members intended to liberalize trade in services progressively.  
This implies that a progressive elimination of various restrictions would occur, including those 
restrictions covered by Article XVI:2.  However, in the meantime, if they have made a market access 
                                                      
841 Article XVIII reads:  " Members may negotiate co mmitments with respect to measures affecting 
trade in services not subject to scheduling under Article s XVI or XVII, including those regarding qualifications, 
standards or licensing matters.  Such commitments shall be inscribed in a Member's Schedule." 
842 It should be noted, however, that the scope of Article XVIII goes beyond that of Article VI:4.  The 
former provides the possibility for negotiating commitments on matters other than qualifications, standards or 
licensing.  WT/DS285/R 
 Page 209 
 
 
commitment in a particular sector or sub-sector, Me mbers are entitled to maintain such restrictions, 
provided that they have been exp licitly and transparently scheduled.  
6.316  Articles XVI and XVII are obligations that appl y only to scheduled sectors.  Hence, Members 
can, but are not obliged to, undertake market acce ss and/or national treatment commitments.  In 
scheduled sectors, Members have the freedom to maintain limitations, terms, conditions and 
qualifications to these specific commitments.  More over, Members maintain the sovereign right to 
regulate within the parameters of Article VI of the GATS.  Members' regulatory sovereignty is an 
essential pillar of the progressive liberalization of  trade in services, but this sovereignty ends 
whenever rights of other Members under the GATS are impaired. 
6.317  The preamble of the GATS, which sets out its object and purpose, confirms that the purpose 
of Article XVI is not to abolish all measures, whet her numerical or non-numerical, that are liable to 
restrict freedom to provide services, but to ta ke an early and significant step towards the progressive  
liberalisation  of trade in services, acknowledging that  this is to be achieved through successive  rounds  
of negotiations designed to secure an ove rall balance of rights and obligations. 
(iv) Conclusion 
6.318  The ordinary meaning of the words, the context of Article XVI, as well as the object and 
purpose of the GATS confirm that the restrictions on market access that are covered by Article XVI are only those listed in paragraph 2 of this Article.  We proceed now to consider the interpretation of 
the particular subparagraphs of Article XVI: 2 that have been invoked by Antigua, namely 
Articles XVI:2(a) and XVI:2(c).  
(c) Interpretation of Article XVI: 2(a) and Article XVI:2(c) 
(i) Article XVI:2, subparagraph (a) 
6.319  Sub-paragraph (a) of Article XVI:2 provides that: 
"[L]imitations on the number of service supp liers whether in the form of numerical 
quotas, monopolies, exclusive service suppliers or the requirements of an economic needs test" 
6.320  There are four elements of Article XVI:2(a) th at must be interpreted in order for us to 
determine whether the challenged measures violate Article XVI.  First, the Panel must determine 
whether the challenged measures contain limitations on "service suppliers";  secondly, whether the list 
of limitations in Article XVI:2(a) is an illustrativ e or an exhaustive list; thirdly, whether a measure 
which prohibits one, several or all means of supply is  to be considered as a limitation "in the form of 
[a] numerical quota";  and finally, in this case, we  must also determine whether a limitation on some 
of the services covered by a committed sector or sub-sector, is to be considered as a limitation "in the 
form of [a] numerical quota". 
Service suppliers 
6.321  The term "service suppliers" is defined in Article XXVIII:(g) to mean "any person that 
supplies a service".843  On the basis of Article XXVIII:(g), we consider that subparagraph (a) of 
                                                      
843 The footnote to Article XXVIII:(g) states that: "Where the service is not supplied directly by a 
juridical person but through other forms of commercial pr esence such as a branch or a representative office, the 
service supplier (i.e. the juridical pers on) shall, nonetheless, through such  presence be accorded the treatment 
provided for service suppliers under th e Agreement.  Such treatment shall be  extended to the presence through 
which the service is supplied and need not be extended to any other parts of the supplier located outside the 
territory where the service is supplied." WT/DS285/R 
Page 210  
 
Article XVI:2 covers measures that are addressed to  and drafted so as to impose limitations on "any 
person that supplies a service". 
Illustrative or exhaustive list of limitations? 
6.322  Antigua argues that the word "whether" in Article  XVI:2(a) indicates that the list that follows 
is illustrative rather than exhaustive.   More particularly, in Antigua's  view, the enumeration in Article 
XVI:2(a) of four forms of limitation844 is not meant to limit the application of Article XVI:2(a) to 
those four identified forms.  Rather, in Antigua's vi ew, the word "whether" makes it clear that the four 
forms of limitations explicitly mentioned are clear ly caught by Article XVI:2(a).  According to 
Antigua, in addition, there may be other forms of limitation that are also caught by Article XVI:2(a) 
but which are not explicitly listed.845  We disagree.   
6.323  Rather, we share the view expressed by the Un ited States that the word "whether" does not 
automatically imply an illustrative list.  Article XXVIII(a) of the GATS states that "'measure' means 
any measure by a Member, whether  in the form of a law, regulation, rule, procedure, decision, 
administrative action, or any other form " (emphasis added).  It is those three final words rather than 
the use of the word "whether" that  establish the illustrative character of the list of instruments and 
actions in Article XXVIII(a) of the GATS.   
6.324  Article XI of the GATT 1994 describes an illustrativ e list of "prohibitions or restriction ... 
whether  made effective through quotas, import or export licenses or other measures " (emphasis 
added).  It is not the word "whether" that qualifies Article XI as an illustrative list.  Rather, the words 
"other measures" at the conclusion of the excerpted te xt have this effect.   Had "other measures" been 
omitted from this text, the list of prohibitions and rest rictions covered by Artic le XI would have been 
confined to the types of prohibitions and restri ctions listed in the Article following the word 
"whether".   
6.325  With respect to Article XVI:2(a), we note that there is no word or term at the conclusion of 
that subparagraph that could be c onstrued as creating an illustrative list, such as "any other form" or 
"any other measure".  In these circumstances, we consider that the word "whether" identifies an 
exhaustive list of limitations that are covered by Artic le XVI:2(a), namely, "limitations in the form of 
numerical quotas, monopolies, exclusive service supp liers or  requirements of an economic needs 
test". 
"Limitations on the number of service suppliers in the form of numerical quotas"  
6.326  We note that Article XVI:2(a) applies, inter alia , to "limitations on the number of service 
suppliers in the form of numerical quotas".  The pa rties disagree as to whether this language captures 
any measure not explicitly framed in quantitative or numerical terms. 
6.327  The issue is not whether qualitative (as opposed to  quantitative) restrictions should be caught 
under Article XVI;  the parties agree that they should not and this is confirmed by the 1993 
Scheduling Guidelines.846  The issue is, rather, whether a measure prohibiting the supply of a service 
by remote means is caught by Article XVI:2(a). 
                                                      
844 Article XVI:2(a) refers to: limitations on the numb er of service suppliers "w hether" (a) in the form 
of numerical quotas; (b) monopolies; (c) exclusive service suppliers; or (d) the requirements of an economic 
needs test. 
845 See Antigua's second oral statement, para. 31. 
846 "... these criteria [specified in subparagraphs (a) to  (d)] do not relate to th e quality of the service 
supplied, or to the ability of the supplier to supply the service (i.e. technical standard or qualification of the 
supplier)", 1993 Scheduling Guidelines , para. 4 (id. in 2001 Scheduling Guidelines , para. 8).  WT/DS285/R 
 Page 211 
 
 
6.328  The United States submits that in maintaining and enforcing laws that prohibit the supply by 
remote means of the service of receiving bets and wa gers, it does not contravene Article XVI:2 of the 
GATS since those laws prescribe a prohibition on the character of certain services and not on the 
number of service suppliers or the number of servi ce operations.  This submission cannot be accepted. 
6.329  On the premise that the United States wished to  maintain and enforce those laws, the proper 
course for it was to make an entry in its schedul e of commitments against sub-sector 10.D, "Other 
Recreational Services (except sporting)" expressing a limitation on market access in respect of the supply by remote means of the service of gambling and betting services.  Such an entry would have limited to zero the number of service suppliers and service operations in the sector to which the 
relevant market access commitment was made. 
6.330  Having made no such entry, the United States, ne vertheless, maintains and enforces laws that 
prohibit the supply by remote means of gambling and betting services.
847  By so doing, it limits to 
zero the number of service suppliers in the sector  to which the relevant market access commitment 
had been made.  In the words of Article XVI:2(a) of the GATS, it imposes a "limitation on the number of service suppliers in the form of [a ] numerical quota".  Any other reading of that 
subparagraph would be inc onsistent with the commitment made  by the United States when inscribing 
the word "None" in the market access column of its schedule of commitments for sub-sector 10.D. 
6.331  It is true that the wording of Article XVI:2(a)  covers numerical quotas other than zero.  That 
is because the subparagraph is designed, in part, to  indicate the limitations, short of total prohibition, 
that Members may specify in their schedules, on th e number of service suppliers.  The fact that the 
terminology embraces lesser limitations, in the fo rm of quotas greater than zero, cannot warrant the 
conclusion that it does not embrace a greater limitation amounting to zero.  Paragraph (a) does not 
foresee a "zero quota" because paragraph (a) was not drafted to cover situations where a Member 
wants to maintain full limitations.  If a Member want s to maintain a full prohibition, it is assumed that 
such a Member would not have scheduled such a sec tor or sub-sector and, therefore, would not need 
to schedule any limitation or measures pursuant to Article XVI:2. 
6.332  Moreover, the 1993 Scheduling Guidelines provide  the following example of a limitation 
under subparagraph (a): "nationalit y requirements for suppliers of services (equivalent to zero 
quota)".
848  This suggests that a measure that is not expressed in the form of a numerical quota or 
economic needs test may still fall within the scope of Article XVI:2(a).  To hold that only restrictions 
explicitly couched in numerical terms fall within Ar ticle XVI:2(a) would produce absurd results.  It 
would, for example, allow a law that explicitly prov ides that "all foreign services are prohibited" to 
escape the application of Article XVI, because it is not expressed in numerical terms.   
Limitation on all or part of a scheduled commitment 
6.333  The United States argues that since it does not maintain a prohibition on the cross-border 
supply of all gambling and betting services, it does not mainta in a zero quota and, therefore, does not 
contravene Article XVI:2(a). 
6.334  We consider that, for the purposes of this dis pute, we need to determine whether a prohibition 
on the supply of a number of services that fall within the scope of the US commitment on gambling and betting services can constitute a "limitation in th e form of numerical quotas" within the meaning 
of Article XVI:2(a).   
                                                      
847 See paras. 6.161 - 6.164 above. 
848 See 1993 Scheduling Guidelines , para. 6.  The same example is contained in the 2001 Scheduling 
Guidelines, para. 12. WT/DS285/R 
Page 212  
 
6.335  We recall that if a Member makes a market access commitment in a sector or sub-sector, that 
commitment covers all services that come within that  sector or sub-sector.  Therefore, we are of the 
view that a Member does not respect its GATS market access obligations under Article XVI:2(a) if it does not allow market access to the whole or part of a scheduled sector or sub-sector. 
Limitation on one, several or all means of delivery under mode 1 
6.336  Antigua argues that limitations on one or more means of delivery under mode 1 with respect 
to a committed sector fall within the scope of  Article XVI:2(a).  The United States argues that 
restrictions relating to the means of supply are c oncerned with the character of the activity involved 
and, therefore, fall outside the scope of Article XVI:2(a). 
6.337  The Panel needs, therefore, to determine whet her a prohibition on one, several or all means of 
delivery included in mode 1 that effectively limits the means of delivery that service suppliers can use 
in supplying a service is a limitation in the fo rm of numerical quotas within the meaning of 
Article XVI:2(a).   
6.338  We recall that the effect of a scheduled commit ment for mode 1 is to allow services suppliers 
in other WTO Members for a committed sector to supply services cross-border via any means of 
delivery.  As we stated above, if one, several or all means of delivery cross-border are prohibited, the 
opportunities for foreign suppliers using those mean s of delivery to supply services cross-border to 
gain access to foreign markets are clear ly reduced.  The Panel is of the view that such a prohibition is 
a "limitation on the number of service suppliers in th e form of numerical quotas" within the meaning 
of Article XVI:2(a) because it totally prevents the use by service suppliers of one, several or all means 
of delivery that are included in mode 1. 
(ii) Article XVI:2, subparagraph (c) 
6.339  Subparagraph (c) of Article XVI:2 provides that: 
"[L]imitations on the total number of serv ice operations or on the total quantity of 
service output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test"
849 
Limitations "expressed ... in the form of a quota" 
6.340  Subparagraph (c) differs in its wording fr om subparagraph (a) in several respects. 
6.341  Firstly, in subparagraph (a), the word "whe ther" precedes the expression "in the form of 
quotas".  In subparagraph (c) that word is omitted .  We do not consider this to be of present 
significance.  For the reasons referred to above in paragraphs 6.322-6.325, we consider that the 
presence of the word "whether" in subparagraph (a) does not imply an illustrative list.  Therefore, its 
omission from subparagraph (c) is without present significance.   
6.342  Secondly, in subparagraph (c), as indeed in su bparagraph (d), the word "number" is qualified 
by the adjective "total".  This may be explained by the fact that subparagraph (c) relates to limitations 
on the aggregate of the service operations or output whereas subparagraph (a) contemplates that limits 
may be imposed on the number of suppliers by refe rence to a criterion other than the national or 
regional aggregate.  However, when a Member's la ws prohibit the supply of a certain service by a 
certain mode, the word "total" is without significance, since the number will always be zero. 
                                                      
849 (original footnote ) Subparagraph 2(c) does not cover measures of a Member which limit inputs for 
the supply of services.  WT/DS285/R 
 Page 213 
 
 
6.343  Thirdly, subparagraph (c), in its English vers ion, speaks of "limitations ... in terms of 
designated numerical units in the form of quotas".  This might perhaps be taken to imply that any 
quota has to be expressed in terms of designated nu merical units.  The element of ambiguity on this 
point is resolved by comparison of the English ve rsion with the French and the Spanish ones, which 
are equally authentic.  These read as follows: 
"c) limitations concernant le nombre to tal d'opérations de services ou la quantité 
totale de services produits, exprimées en un ités numériques déterminées, sous forme 
de contingents ou de l'exigence d'un examen des besoins économiques850;" 
"c) limitaciones al número total de operaciones de servicios o a la cuantía total de 
la producción de servicios, expresadas en unidades numéricas designadas, en forma 
de contingentes o mediante la exigencia de una prueba de necesidades 
económicas851;" 
As can be seen, in these versions, a comma appears af ter the equivalent in the English version of the 
words designated "numerical units".  According to the French versions, there are three possible types 
of limitations that fall within the scope of subpa ragraph (c), namely: (i) limitations exprimées en 
unités numériques déterminées; (ii)  limitations ex primées sous forme de contingents; and (iii) 
limitations exprimées sous forme de l'exigence d'un examen des besoins économiques.  These three 
possibilities also exist under the Spanish version.   6.344  The comparison of these equally authentic texts thus discloses a difference of meaning.  
According to Article 33 of the Vienna Convention, a treaty interpreter must attempt to remove such 
differences through the application of Articles 31 a nd 32 thereof.  In this regard, a reference to 
progressive liberalization as an object and purpose of  the GATS appears to be useful.  Interpreting 
Article XVI:2(c) premised on numerical expression of restrictions alone would open the possibility 
for Members to avoid their obligations and thereby deny and diminish the rights of other Members in cases where a sector or sub-sector has been committ ed, particularly in cases of a full market access 
commitment, as in this case.  This would def eat the object and purpose of the GATS.  Thus, the 
correct reading of Article XVI:2(c) is that the lim itation may be either in the form of designated 
numerical units, in the form of quotas or th e requirement of an economic needs test. 
6.345  Unlike subparagraph (a), subparagr aph (c) of Article XVI:2 contains a reference to "total" 
number of service operations and "total" quantity of service output.  The 1993 Scheduling Guidelines 
state that: "It should be noted that the quantitative r estrictions specified in subparagraphs (a) to (d) 
refer to maximum limitations."  This suggests that  the word "total" in Article XVI:2(c) serves the 
purpose of indicating that limitations covered by  Article XVI:2(c) must impose maximum limits on 
services operation and/or service output. 
6.346  Accordingly, such differences as there are betw een the wording of subparagraphs (a) and (c) 
of Article XVI:2 do not warrant a different conclusi on as to the impact of the two subparagraphs in 
the present case. 
6.347  The maintenance and enforcement of laws that  prohibit the supply by remote means of a 
committed sector or sub-sector limits to zero the number of service operations in the sector or sub-sector for which the Member has made a commitment.  It imposes a "limitation on the total number of service operations ... expressed ... in the form  of quotas" contrary to Article XVI:2(c) of the 
GATS. 
                                                      
850 (original footnote ) L'alinéa 2 c) ne couvre pas les mesures d'un Membre qui limitent les intrants 
servant à la fourniture de services. 
851 (original footnote ) El apartado c) del párrafo 2 no abarca las medidas de un Miembro que limitan los 
insumos destinados al suministro de servicios.  WT/DS285/R 
Page 214  
 
Service operations or service output 
6.348  Subparagraph (c) of Article XVI:2 concerns limitations on service operations or service 
output .  As for how "service operations" and "service out put" should be interpreted, we note that the 
GATS does not contain definitions of these terms.   
6.349  However, relevant context for their meaning can be found in the 1993 Scheduling Guidelines, 
which provide the following example of a limitati on on "service operations or quantity of service 
output" under Article XVI:2(c), namely restrictions on broadcasting time available for foreign films.  
On the basis of this example, we understand "servi ce operations" to mean activities comprised in the 
production of a service.  We understand "service output" to mean the result of the production of the service.  
Limitation on all or part of a scheduled commitment 
6.350  The United States argues that since it does not maintain a prohibition on the cross-border 
supply of all gambling and betting services, it does not mainta in a zero quota and, therefore, does not 
contravene Article XVI:2(c). 
6.351  Therefore, we need to determine whether a prohibition on the supply of a number of services 
that fall within the scope of the US commitm ent on gambling and betting services can constitute a 
"limitation expressed in the form of a quota" within the meaning of Article XVI:2(c).   
6.352  We recall that if a Member makes a market access commitment in a sector or sub-sector, that 
commitment covers all services that come within that  sector or sub-sector.  Therefore, we are of the 
view that a Member does not respect its GATS market access obligations under Article XVI:2(c) if it does not allow market access to the whole or part of a scheduled sector or sub-sector. 
Limitation on one, several or all means of delivery under mode 1 
6.353  Antigua argues that limitations on one, several or all means of delivery under mode 1 with 
respect to a committed sector fall within the scope of Article XVI:2(c). The United States argues that 
restrictions relating to the means of supply are c oncerned with the character of the activity involved 
and, therefore, fall outside the scope of Article XVI:2(c). 
6.354  Thus, the Panel needs to determine whether a prohibition on one, several or all means of 
delivery included in mode 1 that effectively limits these means of delivery for service operations or 
service output is a limitation in the form of a quot a within the meaning of Article XVI:2(c).   
6.355  We examined above in the context of Article  XVI:2(a), the means of delivery that are 
included in mode 1.  We recall our conclusion in that  context, which is equally applicable here, that 
the effect of a scheduled commitment for mode 1 is  to allow service suppliers in other WTO Members 
for the relevant sector to supply services cross-border via any means of delivery.  In our view, if one 
or several mean(s) of delivery cross-border are pr ohibited, services operated through one or more of 
these means of delivery or services that are outputte d using one or more of these means of delivery 
will be limited.  We consider that a prohibition on on e, several or all of the means of delivery included 
in mode 1 constitutes a limitation on mode 1.  The Pa nel is of the view that such a  limitation is a 
limitation "on the total number of service operations or  on the total quantity of service output ... in the 
form of quotas" within the meaning of Article XV I:2(c) because it totally prevents the services 
operations and/or service output through one or more  or all means of delivery that are included in 
mode 1.  In other words, such a ban results in a "zero quota" on one or more or all means of delivery 
include in mode 1.  WT/DS285/R 
 Page 215 
 
 
(d) Application of the legal standard to the facts of this case 
(i) US commitment on market access 
6.356  The Panel recalls its finding above that the United States has made a specific commitment 
with respect to gambling and betting services in sub- sector 10.D of the US Schedule.  In relation to 
sub-sector 10.D, the United States has inscribed th e word "None" for mode 1 in the column entitled 
"Limitations on market access ".   
(ii) Measures at issue  
6.357  We refer to our conclusions in paragraph 6.249,  where we decided that we would confine our 
consideration of violation of the GATS to three US federal laws (namely the Wire Act, the Travel Act 
and the Illegal Gambling Business Act) and to the laws of eight US states (namely, Colorado: § 18-
10-103 of the Colorado Revised Statutes; Louisian a: § 14:90.3 of the La. Rev. Stat. Ann.;  
Massachusetts: § 17A of chapter 271 of Mass. Ann.  Laws; Minnesota: §§ 609.75, Subdivisions 2 – 3 
and 609.755(1) of Minn. Stat. Ann; New Jersey: paragr aph 2 of N.J. Const. Art. 4, Sec. VII and § 
2A:40-1 of the N.J. Code; New York: § 9 of Art. I of N.Y. Const. and § 5-401 of the N.Y. Gen. 
Oblig. L.; South Dakota: §§ 22-25A-1 - 22-25A-15 of the S.D. Codified Laws; and Utah: § 76-10-
1102 of the Utah Code Ann.) 
6.358  Our task in examining these laws is to determin e whether, in light of the fact that the United 
States has inscribed "None" in its market access co lumn for mode 1 for gambling and betting services, 
these laws impose "limitations on the number of service suppliers in the form of numerical quotas" within the meaning of Article XVI:2(a) and/or "lim itations on the total number of service operations 
or on the total quantity of service output ... in the form of quotas" within the meaning of 
Article XVI:2(c).    
6.359  By way of context for this examination, we re call that the United States admits that federal 
and state laws are applied so as to prohibit what it describes as the "remote supply" of most gambling and betting services
852 and, as further discussed below, there is  relevant evidence confirming the US 
practice in this regard.  
Federal laws 
The Wire Act 
6.360  The Wire Act provides in relevant part that: 
"Whoever being engaged in the business of betting or wagering knowingly uses a 
wire communication facility for the transmis sion in interstate or foreign commerce of 
bets or wagers or information assisting in the placing of bets or wagers on any 
sporting event or contest, or for the transmission of a wire communication which 
entitles the recipient to receive money or cred it as a result of bets or wagers, or for 
information assisting in the placing of bets or wagers shall be fined under this title or 
imprisoned not more than two years, or both." 
6.361  The opening text of the Wire Act refers to "whoever being engaged in  the business of ...".  
This language makes it clear to us  that the Wire Act concerns suppliers  of "betting and wagering" 
services.  Therefore, we consider that this Act c oncerns "service suppliers" within the meaning of 
Article XVI:2(a).  The Wire Act  can also be read to concern the treatment of services operations  or 
service output since  the Act effectively prohibits the supply of betting or wagering services through 
                                                      
852 See paras. 6.161-6.164.  WT/DS285/R 
Page 216  
 
the use of a wire communication facility.  Therefore,  we consider that this Act concerns "service 
operations" and "service output" within the meaning of Article XVI:2(c).   
6.362  As is evident from the excerpted text of the Wi re Act, the Act prohibits the use of a wire 
communication facility for, inter alia , the transmission in interstate or foreign commerce of bets or 
wagers.  Therefore, in our view, the Wire Act prohibits the use of te lephone given the explicit 
reference to wire communication.  In addition, so me US courts have interpreted the Wire Act to 
include communication by the Internet.
853  Further, the United States has acknowledged that the Wire 
Act covers the remote transmission in intersta te or foreign commerce of bets or wagers.854  Therefore, 
we consider that the Wire Act prohibits the use of at least one or potentiall y several means of delivery 
included in mode 1. 
6.363  We recall that a ban on the use of one, several or all means of delivery included in mode 1 
constitutes a "zero quota" for, respectively, one, several  or all of those means of delivery.   Under the 
Wire Act, service suppliers  seeking to supply gambling and be tting services through the telephone, 
Internet and other means of delivery using wire communication are prohibited from doing so.  Further, services operations  and service output  through the telephone, Internet and other means of 
delivery using wire communication are prohibited under the Wire Act.  Accordingly, the Panel 
considers that the Wire Act contains a limitati on "in the form of numerical quotas" within the 
meaning of Article XVI:2(a) a nd a limitation "in the form of a quota" within the meaning of 
Article XVI:2(c). 
6.364  We also recall that a Member does not resp ect its GATS market access obligations under 
Article XVI:2(a) and Article XVI:2(c) if it does not allow market access to the whole or part of a 
scheduled sector.  The Wire Act c oncerns "betting or wagering", whic h is part of the services covered 
by the US commitment under sub-sector 10.D.  Theref ore, through the Wire Act, the United States 
restricts market access to part of a scheduled sector, namely, " betting or wagering". 
6.365  Since the United States has inscribed "None" in the market access column under sub-sector 
10.D , it cannot maintain limita tions referred to in Article XVI:2.  As  the Wire Act contains limitations 
that fall within the scope of Article XVI:2(a) and Article XVI:2(c), the United States is according less 
favourable treatment than that provided for in  its Schedule contrary to Article XVI:1 and 
Article XVI:2.  Therefore, we conclude that the Wire Act is inconsistent with Article XVI:1 and 
Article XVI:2.   
The Travel Act 
6.366  The Travel Act provides in relevant part that: 
"(a) Whoever travels in interstate or foreign commerce or uses the mail or any 
facility in interstate or forei gn commerce, with intent to – 
 (1) distribute the proceeds of any unlawful activity; or  (2) commit any crime of violence to  further any unlawful activity; or 
 (3) otherwise promote, manage, establish, carry on, or facilitate the 
promotion, management, establishment, or carrying on, of any unlawful 
activity, 
                                                      
853 See United States v Jay Cohen  (Exhibit AB-83) and Vacco ex rel. People  v World Interactive 
Gaming Corp . (Exhibit AB-97).  Exhibits AB-56, AB-73 and AB -98 also contain evidence indicating that the 
Wire Act covers communication by the Internet.  
854 United States' second written submission, paras. 22 and 78.  WT/DS285/R 
 Page 217 
 
 
and thereafter performs or attempts to perform -- 
 (A) an act described in paragraph (1) or (3) shall be fined under 
this title, imprisoned not more than 5 years, or both; or 
 (B) an act described in paragraph (2) shall be fined under this 
title, imprisoned for not more than 20 years, or both, and if death 
results shall be imprisoned for any term of years or for life. 
(b) As used in this section (i) "unl awful activity" means (1) any business 
enterprise involving gambling ... in violation of the laws of the State in which they are committed or of the United States." 
6.367  The text of the Travel Act makes it clear that it prohibits travel in interstate or foreign 
commerce or the use of mail or any facility in inte rstate or foreign commerce, with the intent to: 
distribute the proceeds of any " unlawful activity"; commit any crim e of violence to further any 
"unlawful activity"; or otherwise promote, manage, establish, carry on, or facilitate the promotion, 
management, establishment, or carrying on, of an y "unlawful activity".  "Unlawful activity" is 
defined, inter alia , as any business enterprise involving gambling in violation of the laws of the state 
in which they are committed or of the United States.  It may be the case that some state laws prohibit 
a "business enterprise involving gambling".  In such  cases, a "business enterprise involving gambling" 
in contravention of the relevant state laws would al so be contrary to the Travel Act if such a business 
enterprise entails the supply of gambling and betting services by "mail or any facility" provided that 
the other requirements in subparagraph (a) of  the Travel Act have been met.     
6.368  The Travel Act refers to service suppliers , in particular, those who travel in interstate or 
foreign commerce or those who use the mail or any facility in interstate or foreign commerce with 
intent to distribute the proceeds of any unlawful ac tivity, commit any crime of violence to further any 
unlawful activity or otherwise promote, manage, es tablish, carry on, or facilitate the promotion, 
management, establishment, or carrying on, of any un lawful activity.  The interpretation that the Act 
is targeted at suppliers is confirmed by the fact th at "unlawful activity" is defined by reference to 
activities engaged in by a "business enterprise".   Th erefore, we consider that this Act concerns 
"service suppliers" within the meaning of Article XVI:2(a).    
6.369  The Travel Act  can also be read to concern the treatment of services  operations  or service 
output  because it effectively prohibits the supply of gambling services through mail or "any facility".  
Facility may be interpreted to in clude the telephone and Internet.
855  Therefore, we consider that the 
Travel Act  also concerns "service operations" or "service output" within the meaning of 
Article XVI:2(c). 
6.370  We recall that a ban on the use of one, several or all means of delivery included in mode 1 
constitutes a "zero quota" for, respectively, one, several  or all of those means of delivery.   As we 
stated above in paragraph 6.367, the Travel Act pr ohibits gambling activity that entails the supply of 
gambling and betting services by "mail or any facility" to  the extent that such supply is undertaken by 
a "business enterprise involving gambling" that is prohibited under state law and provided that the 
other requirements in subparagraph (a) of the Travel Act have been met.     
                                                      
855 There is evidence to indicate that the Travel Ac t covers supply of gambling services through the 
telephone and the Internet.  See Vacco ex rel. People  v World Interactive Gaming Corp  (Exhibit AB-97).  See 
also Exhibit AB-73. WT/DS285/R 
Page 218  
 
6.371  Therefore, under the Travel Act (when read together with the relevant state laws)
856, service 
suppliers  seeking to supply gambling and betting ser vices through the mail and potentially all other 
means of delivery included in mode 1 are prohibited from doing so.  Further, services operations  and 
service output  through the mail and perhaps all other means of delivery included in mode 1 are also 
prohibited under the Travel Act (when read together with the relevant state laws).  Accordingly, the 
Panel considers that the Travel Act contains a lim itation "in the form of numerical quotas" within the 
meaning of Article XVI:2(a) a nd a limitation "in the form of a quota" within the meaning of 
Article XVI:2(c). 
6.372  We also recall that a Member does not resp ect its GATS market access obligations under 
Article XVI:2(a) and Article XVI:2(c) if it does not allow market access to the whole or part of a 
scheduled sector.  The Travel Act concerns, inter alia , "gambling", which is part of the services 
covered by the US commitment under sub-sector 10.D.  Therefore, through the Travel Act, the United 
States restricts market access to part of a scheduled sector, namely, "gambling". 
6.373  Since the United States has inscribed "None" in the market access column under sub-sector 
10.D , it cannot maintain limitations referred to in Ar ticle XVI:2.  As the Travel Act contains 
limitations that fall within the scope of Article XVI:2(a) and Article XVI:2(c), the United States is 
according less favourable treatment than that provide d for in its Schedule contrary to Article XVI:1 
and Article XVI:2.  Therefore, we conclude that th e Travel Act is inconsistent with Article XVI:1 and 
Article XVI:2. 
The Illegal Gambling Business Act 
6.374  The Illegal Gambling Business Act provides in relevant part that: 
"(a) Whoever conducts, finances, manages, supervises, directs or owns all or part 
of an illegal gambling business shall be fine d under this title or imprisoned not more 
than five years, or both. 
(b) As used in this section – (1) 'illegal gambling business' means a gambling business which – 
 (i) is a violation of the law of a State or political subdivision 
in which it is conducted; 
 (ii) involves five or more persons who conduct, finance, 
manage, supervise, direct, or own all or part of such business; and 
 (iii) has been or remains in substantially continuous operation 
for a period in excess of thirty days or has a gross revenue of 
$2,000 in any single day. 
(2) 'gambling' includes but is not limited to pool-selling, bookmaking, 
maintaining slot machines, roulette wheels or dice tables, and conducting lotteries, policy, bolita or numbers games, or selling chances therein. 
                                                      
856 That is, state laws that prohibit a "business ente rprise involving gambling".  Such state laws would 
include but are not limited to § 14:90.3 of the Louisiana Rev. Stat. Ann., § 17A of chapter 271 of Massachusetts Ann. Laws, § 22-25A-8 of the South Dakota Codified Laws, and § 76-10-1102(b) of the Utah Code, which we 
find below in paragraphs 6.381-6.418 together prohibit the supply of gambling and betting services by all means 
included in mode 1.  WT/DS285/R 
 Page 219 
 
 
(3) 'State' means any State of the United States, the District of Columbia, the 
Commonwealth of Puerto Rico, and any territory or possession of the United States." 
6.375  In our view, the text of the Illegal Gambling Bu siness Act makes it clear that the Act prohibits 
the conduct of businesses that fall within the defin ition of an "illegal gambling business".  A gambling 
business is defined as "illegal" under the Act if it violates the law of a state (or political subdivision) 
of the United States.  It may be the case that so me state laws prohibit gambling businesses.  In such 
cases, a "gambling business" that violates state law and that entails the conduct, finance, management, 
supervision, direction or ownershi p of all or part of such a business would also be contrary to the 
Illegal Gambling Business Act provided that the ot her requirements in subparagraph (b)(1) of the 
Illegal Gambling Business Act have been met.  We consider that because the Illegal Gambling 
Business Act prohibits the conduct, finance, manageme nt, supervision, directio n or ownership of all 
or part of a "gambling business" that violates state law, it effectively prohibits the supply of gambling and betting services through at least one and potentia lly all means of delivery included in mode 1 by 
such businesses. 
6.376  The Illegal Gambling Business Act refers to service suppliers , in particular, those who 
conduct, finance, manage, supervise, direct or own all or part of an illegal gambling business.  
Therefore, we consider that this Act concer ns "service suppliers" within the meaning of 
Article XVI:2(a).  The Illegal Gambling Business Act  can also be read to concern the treatment of 
services  operations  or service output  because it effectively prohibits  businesses that fall within the 
definition of an "illegal gambling business".  Ther efore, we consider that the Illegal Gambling 
Business Act  also concerns "service operations" or "service output" within the meaning of 
Article XVI:2(c). 
6.377  We recall that a ban on the use of one, several or all means of delivery included in mode 1 
constitutes a "zero quota" for, respectively, one, several  or all of those means of delivery.   As we 
stated above in paragraph 6.375, the Illegal Ga mbling Business Act prohibits gambling activity that 
entails the conduct, finance, management, supervision, direction or ownership of all or part of such a 
business to the extent that such supply is undertaken  by a "gambling business" that is prohibited under 
state law and provided that the other requirements in sub-paragraph (b)(1) of the Illegal Gambling 
Business Act have been met.     
6.378  Therefore, under the Illegal Gambling Business Ac t (when read together with the relevant 
state laws)
857, service suppliers  seeking to supply gambling and betting services through at least one 
and potentially all means of delivery included in mode 1 are prohibited from doing so.  Further, 
services operations  and service output  through all means of delivery included in mode 1 are also 
prohibited under the Illegal Gambling Business Act (when read together with the relevant state laws).  
Accordingly, the Panel considers that the Illegal Gambling Business Act contains a limitation "in the 
form of numerical quotas" within the meaning of Ar ticle XVI:2(a) and a limitation "in the form of a 
quota" within the meaning of Article XVI:2(c). 
6.379  We also recall that a Member does not resp ect its GATS market access obligations under 
Article XVI:2(a) and Article XVI:2(c) if it does not allow market access to the whole or part of a scheduled sector.  The Illegal Gambling Business Ac t concerns, "gambling", which is part of the 
services covered by the US commitment under sub- sector 10.D.  Therefore, through the Illegal 
Gambling Business Act, the United States restricts market access to part of a scheduled sector, 
namely, "gambling". 
                                                      
857 That is, state laws that prohibit a "gambling busin ess".  Such state laws would include but are not 
limited to § 14:90.3 of the Louisiana Rev. Stat. Ann., § 17A of chapter 271 of Massachusetts Ann. Laws, § 22-25A-8 of the South Dakota Codified Laws, and § 76-10-1102(b) of the Utah Code, which we find below in 
paragraphs 6.381-6.418 together prohibit the supply of gambling and betting services by all means included in 
mode 1. WT/DS285/R 
Page 220  
 
6.380  Since the United States has inscribed "None" in the market access column under sub-sector 
10.D , it cannot maintain limitations referred to in Ar ticle XVI:2.  As the Illegal Gambling Business 
Act contains limitations that fall within the scope  of Article XVI:2(a) and Article XVI:2(c), the 
United States is according less favourable treatment than  that provided for in its Schedule contrary to 
Article XVI:1 and Article XVI:2.  Therefore, we c onclude that the Illegal Gambling Business Act is 
inconsistent with Article XVI:1 and Article XVI:2. 
State laws 
Colorado  
6.381  The text of § 18-10-103 of the Colorado Revised Statutes provides as follows: 
"(1) A person who engages in gambling commits a class 1 petty offense. 
(2) A person who engages in professional gambling commits a class 1 misdemeanor.  
If he is a repeating gambling offender, it is a class 5 felony." 
6.382  In our view, the text of § 18-10-103 of the Colorado Revised Statutes indicates that is not 
directed at "service suppliers" for the purposes of Article XVI:2(a) nor to "service operations" and "service output" for the purposes of Article XVI:2(c).  Rather, we consider that § 18-10-103 of the 
Colorado Revised Statutes is directed at persons wh o engage in gambling, that is, those who actually 
gamble.  This appears to be confirmed by eviden ce before us regarding the interpretation of § 18-10-
103 of the Colorado Revised Statutes, which indicates that § 18-10-103 is inte rpreted and applied to 
prohibit gambling  by the Internet.
858  Antigua has not adduced any evidence to indicate that the supply  
of gambling services by the Internet or by any ot her means included in mode 1 is prohibited.   
6.383  Therefore, we conclude that Antigua has not provided a prima facie demonstration that § 18-
10-103 of the Colorado Revised Statutes contains  a limitation that falls within the scope of 
Article XVI:2(a) and/or Article XVI:2(c).  In par ticular, we are not convinced that that section is 
directed at "service suppliers" for the purposes of Article XVI:2(a) and/or to "service operations" and 
"service output" for the purposes of Article XVI:2(c).  Accordingly, we find that Antigua has not provided a prima facie demonstration that § 18-10-103 of the Colorado Revised Statutes is 
inconsistent with Article XVI:1 and Article XVI:2. 
Louisiana 
6.384  Section 14:90.3 of the La. Rev. Stat. Ann. provides in relevant part that: 
"E. Whoever designs, develops, manages, supervises, maintains, provides, or 
produces any computer services, computer system, computer network, computer software, or any server providing a Home  Page, Web Site, or any other product 
accessing the Internet, World Wide Web,
859 or any part thereof offering to any client 
for the primary purpose of the conducting as a business of any game, contest, lottery, or contrivance whereby a person risks the loss of anything of value in order to realize 
a profit shall be fined not more than twen ty thousand dollars, or imprisoned with or 
without hard labor, for not more than five years, or both. 
... 
                                                      
858 Exhibit AB-131, p. 5. 
859 The terms "client", "computer", "computer network", "computer services", "computer software", 
"computer system", "Home Page", "Internet", "Server" and "World Wide Web" are defined in § 14:90.3.C of the 
La. Rev. Stat. Ann.   These definitions are set out in Annex F.    WT/DS285/R 
 Page 221 
 
 
I. ... The provisions of this Subsection sh all not exempt from criminal prosecution any 
telephone company, Internet Service Provider,  software developer, licensor, or other 
such party if its primary purpose in providing such service is to conduct gambling as a business." 
6.385  Section 14:90.3 of the La. Rev. Stat. Ann. concerns service suppliers , in particular, those who 
design, develop, manage, supervise, maintain, pr ovide, or produce any computer services, computer 
system, computer network, computer software, or  any server providing a Home Page, Web Site, or 
any other product accessing the Internet or World Wide  Web.  Subparagraph I of § 14:90.3 of the La. 
Rev. Stat. Ann. makes it clear that § 14:90.3 of the La . Rev. Stat. Ann. is directed at service suppliers, 
including telephone companies, Internet Service Pr oviders, software develope rs, licensors and other 
parties whose primary purpose is to conduct a ga mbling business.  Therefore, we consider that 
§ 14:90.3 of the La. Rev. Stat. Ann. concerns  "service suppliers" within the meaning of 
Article XVI:2(a).   
6.386  Section 14:90.3 of the La. Rev. Stat. Ann. can  also be read to concern the treatment of 
services  operations  or service output  because it effectively prohibits the conducting as a business of 
any game, contest, lottery, or contrivance whereby a person risks the loss of anything of value in order 
to realize a profit.  Therefore, we consider that § 14:90.3 of the La. Rev. Stat. Ann. also concerns 
"service operations" or "service output" within the meaning of Article XVI:2(c). 
6.387  We recall that a ban on the use of one, several or all means of delivery included in mode 1 
constitutes a "zero quota" for, respectively, one, sever al or all of those means of delivery.  Under § 
14:90.3 of the La. Rev. Stat. Ann., service suppliers  seeking to conduct a business of any game, 
contest, lottery, or contrivance whereby a person risks the loss of anything of value in order to realize 
a profit through the Internet are prohibited from doing so.  Further, services operations  and service 
output  involving a business of any game, contest, lottery , or contrivance whereby a person risks the 
loss of anything of value in order to realize a profit through the Internet are also prohibited under § 14:90.3 of the La. Rev. Stat. Ann.  Accordingly, the Panel considers that § 14:90.3 of the La. Rev. 
Stat. Ann. contains a limitation "in the form of numerical quotas" within the meaning of 
Article XVI:2(a) and a limitation "in the form of a quota" within the meaning of Article XVI:2(c). 
6.388  We also recall that a Member does not resp ect its GATS market access obligations under 
Article XVI:2(a) and Article XVI:2(c) if it does not allow market access to the whole or part of a scheduled sector.  Section 14:90.3 of the La. Rev. Stat. Ann. concerns the conduct "as a business of any game, contest, lottery, or contrivance whereby a person risks the loss of anything of value in order 
to realize a profit", which is part of the services covered by the US commitment under sub-sector 
10.D.  Therefore, through § 14.90.3 of the La. Re v. Stat. Ann., the United States restricts market 
access to part of a scheduled sector, namely, the "business of any game, contest, lottery, or contrivance whereby a person risks the loss of an ything of value in order to realize a profit". 
6.389  Since the United States has inscribed "None" in the market access column under sub-sector 
10.D , it cannot maintain limitations re ferred to in Article XVI:2.  As § 14:90.3 of the La. Rev. Stat. 
Ann. contains limitations that fall within the sc ope of Article XVI:2(a) and Article XVI:2(c), the 
United States is according less favourable treatment than  that provided for in its Schedule contrary to 
Article XVI:1 and Article XVI:2.  Therefore, we concl ude that § 14:90.3 of the La. Rev. Stat. Ann. is 
inconsistent with Article XVI:1 and Article XVI:2. 
Massachusetts 
6.390
 Section 17A of chapter 271 of Mass. Ann. Laws provides that: 
"Whoever uses a telephone or, being the occ upant in control of premises where a 
telephone is located or a subscriber for a telephone, knowingly permits another to use WT/DS285/R 
Page 222  
 
a telephone so located or for which he subscribes, as the case may be, for the purpose of accepting wagers or bets, or buying or selling of pools, or for placing all or any 
portion of a wager with another, upon the resu lt of a trial or contest of skill, speed, or 
endurance of man, beast, bird, or machine, or upon the result of an athletic game or contest, or upon the lottery called the numbe rs game, or for the purpose of reporting 
the same to a headquarters or booking office,  or who under a name other than his own 
or otherwise falsely or fictitiously proc ures telephone service for himself or another 
for such purposes, shall be punished by a fi ne of not more than two thousand dollars 
or by imprisonment for not more than one year;  provided, however, that this section shall not apply to use of telephones or other devices or means to place wagers 
authorized pursuant to the provisions of section 5C of chapter 128A." 
6.391  Section 17A of chapter 271 of Mass. Ann. Laws concerns service suppliers , in particular, 
those who use a telephone or, being the occupant in control of premises where a telephone is located 
or a subscriber for a telephone, knowingly perm it another to use a telephone for the purpose of, 
inter alia , accepting wagers or bets.  Therefore, we cons ider that § 17A of chapter 271 of Mass. Ann. 
Laws concerns "service suppliers" within the meaning of Article XVI:2(a).   
6.392  Section 17A of chapter 271 of Mass. Ann. Laws can also be read to concern the treatment of 
services  operations  or service output  because it effectively prohibits the supply of services including 
the acceptance of wagers or bets through use of the telephone.  Therefore, we consider that § 17A of 
chapter 271 of Mass. Ann. Laws also concerns "service operations" or "service output" within the 
meaning of Article XVI:2(c). 
6.393  We recall that a ban on the use of one, several or all means of delivery included in mode 1 
constitutes a "zero quota" for, respectively, one, sever al or all of those means of delivery.  Under § 
17A of chapter 271 of Mass. Ann. Laws, service suppliers  seeking to conduct a business involving, 
inter alia , the acceptance of wagers or bets using the telephone are prohibited from doing so.  Further, 
services operations  and service output  involving, inter alia , the acceptance of wagers or bets using the 
telephone are also prohibited under § 17A of chapte r 271 of Mass. Ann. Laws.  Accordingly, the 
Panel considers that § 17A of chapter 271 of Mass. Ann. Laws contains a limitation "in the form of 
numerical quotas" within the meaning of Article XV I:2(a) and a limitation "in the form of a quota" 
within the meaning of Article XVI:2(c). 
6.394  We also recall that a Member does not resp ect its GATS market access obligations under 
Article XVI:2(a) and Article XVI:2(c) if it does not allow market access to the whole or part of a 
scheduled sector.  Section 17A of chapter 271 of Mass. Ann. Laws concerns, inter alia , the 
acceptance of wagers or bets which are part of  the services covered by the US commitment under 
sub-sector 10.D.  Therefore, thro ugh § 17A of chapter 271 of Mass.  Ann. Laws, the United States 
restricts market access to part of a scheduled sector, namely, the acceptance of wagers or bets. 
6.395  Since the United States has inscribed "None" in the market access column under sub-sector 
10.D , it cannot maintain limitations referred to in Ar ticle XVI:2.  As § 17A of chapter 271 of Mass. 
Ann. Laws contains limitations that fall within the scope of Article XVI:2(a) and Article XVI:2(c), the 
United States is according less favourable treatment than  that provided for in its Schedule contrary to 
Article XVI:1 and Article XVI:2.  Therefore, we c onclude that § 17A of chapter 271 of Mass. Ann. 
Laws is inconsistent with Ar ticle XVI:1 and Article XVI:2. 
Minnesota 
6.396  Section 609.755(1) of Minn. Stat. Ann. provides that: 
"Whoever does any of the following is guilty of a misdemeanor:  WT/DS285/R 
 Page 223 
 
 
(1) makes a bet; 
(2) sells or transfers a chance to participate in a lottery; (3) disseminates information about a lo ttery, except a lottery conducted by an 
adjoining state, with intent to encourage participation therein; 
(4) permits a structure or location owned or occupied by the actor or under the actor's 
control to be used as a gambling place;  or 
(5) except where authorized by statute, possesses a gambling device. Clause (5) does not prohibit possession of a gambling device in a person's dwelling 
for amusement purposes in a manner that does not afford players an opportunity to 
obtain anything of value." 
Section 609.75, Subdivisions 2 – 3 of Minn. Stat. Ann., contains definitions of what are and what are 
not "bets" for the purposes of § 609.755(1) of Mi nn. Stat. Ann.  The text of section 609.755(1), 
Subdivisions 2 – 3 of Minn. Stat. Ann. is contained in Annex F. 
6.397  In our view, the text of the subparagraph of § 6 09.755(1) of Minn. Stat. Ann. that is relevant 
for this dispute, namely subparagraph (a),  indicates that it is not directed at "service suppliers" for the 
purposes of Article XVI:2(a) nor to "service ope rations" and "service output" for the purposes of 
Article XVI:2(c).  Rather, we consider that § 609.755 (1) of Minn. Stat. Ann. is directed at persons 
who make a bet.  This appears to be confirmed by  evidence before us regarding the interpretation of 
§§ 609.75, Subdivisions 2 – 3 and 609.755(1) of Minn. Stat. Ann, which indicates that, under these sections, a "person in Minnesota who places a bet th rough [an Internet gambling organization] is 
committing a crime".
860 Antigua has not adduced any evidence to indicate that the supply  of betting 
services by the Internet or by any other means in cluded in mode 1 is proh ibited under §§ 609.75, 
Subdivisions 2 – 3 and 609.755(1) of Minn. Stat. Ann.   
6.398  Therefore, we conclude that Antigua has not  provided a prima facie demonstration that 
§ 609.755(1) of Minn. Stat. Ann. contains a limita tion that falls within the scope of Article XVI:2(a) 
and/or Article XVI:2(c).  In particular, we are not convinced that that section is directed at "service 
suppliers" for the purposes of Article XVI:2(a) or to "service operations" and "service output" for the 
purposes of Article XVI:2(c).  Accordingly, we find that Antigua has not provided a prima facie demonstration that § 609.755(1) of Minn. Stat. Ann. is inconsistent with Article XVI:1 and 
Article XVI:2. 
New Jersey 
6.399  Paragraph 2 of N.J. Const. Art. 4, S ec. VII provides in relevant part that: 
"No gambling of any kind shall be authorized by the Legislature unless the specific 
kind, restrictions and control thereof have been heretofore submitted to, and 
authorized by a majority of the votes cast by,  the people at a special election or shall 
hereafter be submitted to, and authorized by  a majority of the votes cast thereon by, 
the legally qualified voters of the State voting at a general election, except that, 
without any such submission or authorization: [a list of lawful activities when 
authorized is provided]."
861 
                                                      
860 See a statement by the Minnesota Attorney General contained in Exhibit AB-96. 
861 For the full text see Annex F of our Report. WT/DS285/R 
Page 224  
 
6.400  Section 2A:40-1 of N.J. Code further provides that: 
"All wagers, bets or stakes made to de pend upon any race or game, or upon any 
gaming by lot or chance, or upon any lot, chance, casualty or unknown or contingent event, shall be unlawful." 
6.401  In our view, the text of paragraph 2 of N.J. Cons t. Art. 4, Sec. VII and the text of § 2A:40-1 
of N.J. Code, which appears to be the implementati on of the relevant paragraph of the N.J. Const., 
indicate that these provisions are not directed  at "service suppliers" for the purposes of 
Article XVI:2(a) nor to "service operations" and "ser vice output" for the purposes of Article XVI:2(c).  
Rather, we consider that paragraph 2 of N.J. Const.  Art. 4, Sec. VII and § 2A:40-1 of N.J. Code are 
directed at persons who engage in gambling.  An tigua has not adduced any evidence to indicate that 
the supply  of wagering and betting services by the Internet  or by any other means included in mode 1 
is prohibited under paragraph 2 of N.J. Const. Ar t. 4, Sec. VII and § 2A:40-1 of N.J. Code.
862  
6.402  Therefore, we conclude that Antigua has not  provided a prima facie demonstration that 
paragraph 2 of N.J. Const. Art. 4, Sec. VII and § 2A:40-1 of N.J. Code cont ain limitations that fall 
within the scope of Article XVI:2(a) and/or Article XVI :2(c).  In particular, we are not convinced that 
those sections are directed at "service suppliers" fo r the purposes of Article XVI:2(a) or to "service 
operations" and "service output" for the purposes of Ar ticle XVI:2(c).  Accordingly, we find that 
Antigua has not provided a prima facie demonstration th at paragraph 2 of N.J. Const. Art. 4, Sec. VII 
and § 2A:40-1 of N.J. Code are inconsiste nt with Article XVI:1 and Article XVI:2. 
New York 
6.403  The text of § 9 of Art. I of N.Y. Const. provides as follows: 
"1. No law shall be passed abridging the rights of the people peaceably to assemble 
and to petition the government, or any depart ment thereof;  nor shall any divorce be 
granted otherwise than by due judicial proceedings;  except as hereinafter provided, no lottery or the sale of lottery tickets, pool -selling, bookmaking, or any other kind of 
gambling, except lotteries operated by the state and the sale of lottery tickets in 
connection therewith as may be authorized a nd prescribed by the legislature, the net 
proceeds of which shall be applied exclusively to or in aid or support of education in 
this state as the legislature may prescribe, and except pari-mutuel betting on horse races as may be prescribed by the legislatur e and from which the state shall derive a 
reasonable revenue for the support of govern ment, shall hereafter be authorized or 
allowed within this state;  and the legisl ature shall pass appropriate laws to prevent 
offenses against any of the provisions of this section. [.... a list of lawful activities 
when authorized is listed]."
863 
6.404  The text of § 5-401 of the N.Y. Gen. Oblig. L. provides as follows: 
"All wagers, bets or stakes, made to de pend upon any race, or upon any gaming by lot 
or chance, or upon any lot, chance, casu alty, or unknown or contingent event 
whatever, shall be unlawful." 
6.405  In our view, the text of § 9 of Art. I of N.Y. Const. and the text of § 5-401 of the N.Y. Gen. 
Oblig. L., which appears to be the implementation of the relevant paragraph of the N.Y. Const., 
suggest that at least the latter provision is not directed at "service suppliers" for the purposes of 
                                                      
862 We have seen the discussion of paragraph 2 of N.J. Const. Art. 4, Sec. VII in Exhibit AB-119 but 
we note that, in its submissions, Antigua did not refer to or elaborate on that discussion.  
863 For the full text see Annex F of our Report .  WT/DS285/R 
 Page 225 
 
 
Article XVI:2(a) nor to "service operations" and "ser vice output" for the purposes of Article XVI:2(c).  
Rather, we consider that § 9 of Art. I of N.Y. Cons t. when read together with § 5-401 of the N.Y. Gen. 
Oblig. L. is directed at persons who engage in gambling.  Antigua has not adduced any evidence to 
indicate that the supply  of wagering and betting services by th e Internet or by any other means 
included in mode 1 is prohibited under § 9 of Art.  I of N.Y. Const. and § 5-401 of the N.Y. Gen. 
Oblig. L.864  
6.406  Therefore, we conclude that Antigua has not pr ovided a prima facie demonstration that § 9 of 
Art. I of N.Y. Const. and § 5-401 of the N.Y. Gen.  Oblig. L. contain limitations that fall within the 
scope of Article XVI:2(a) and/or Article XVI:2(c).  In particular, we are not convinced that those 
sections are directed at "service suppliers" for the purposes of Article XVI:2(a) or to "service 
operations" and "service output" for the purposes of Ar ticle XVI:2(c).  Accordingly, we find that 
Antigua has not provided a prima facie demonstration that § 9 of Art. I of N.Y. Const. and § 5-401 of 
the N.Y. Gen. Oblig. L. are inconsistent with Article XVI:1 and Article XVI:2. 
South Dakota 
6.407  The aspects of §§ 22-25A-1 - 22-25A-15 of the S.D.  Codified Laws that we consider to be 
relevant to Antigua's claim of violation under Article XVI are set out below:  
"22-25A-8  Establishment of internet gambling business prohibited. Except as provided in § 22-25A-15, no person ma y establish a location or site in this 
state from which to conduct a gambling business on or over the internet or an interactive computer service. 
22-25A-9  Violation if gambling originates or terminates in state -- Each bet a 
separate violation. 
A violation of § 22-25A-7 or § 22-25A-8 occurs if the violation originates or 
terminates, or both, in this state.  Each i ndividual bet or wager offered in violation of 
§ 22-25A-7 or from a location or site that violates § 22-25A-8 constitutes a separate violation." 
6.408  Section 22-25A-8 of the S.D. Codified Laws concerns service suppliers , in particular, those 
who establish a location or site in the state of South Dakota from which to conduct a gambling business on or over the Internet or an interactive computer service, including suppliers whose services 
terminate in the state of South Dakota as provided fo r in § 22-25A-9.  Therefore, we consider that § 
22-25A-8 of the S.D. Codified Laws concerns  "service suppliers" within the meaning of 
Article XVI:2(a).   
6.409  Section 22-25A-8 of the S.D. Codified Laws can  also be read to concern the treatment of 
services  operations  or service output  because it effectively prohibits the supply of gambling services 
through the use, inter alia , of the Internet.  Therefore, we consider that § 22-25A-8 of the S.D. 
Codified Laws also concerns "service operati ons" or "service output" within the meaning of 
Article XVI:2(c). 
6.410  We recall that a ban on the use of one, several or all means of delivery included in mode 1 
constitutes a "zero quota" for, respectively, one, several  or all of those means of delivery.  Under § 22-
25A-8 of the S.D. Codified Laws, service suppliers  seeking to conduct a gambling business through 
                                                      
864 We have seen the discussion of § 9 of Art. I of N.Y. Const. and § 5-401 of the N.Y. Gen. Oblig. L. 
in Exhibits AB-56, AB-57, AB-58, AB-83, AB-97 and AB-98 but we note that, in its submissions, Antigua did 
not refer to or elaborate on that discussion.  WT/DS285/R 
Page 226  
 
the Internet are prohibited from doing so.  Further, services operations  and service output  involving a 
gambling business that uses the Inte rnet are also prohibited under § 22-25A-8 of the S.D. Codified 
Laws.  Accordingly, the Panel considers that § 22 -25A-8 of the S.D. Codified Laws contains a 
limitation "in the form of numerical quotas" within the meaning of Article XVI:2(a) and a limitation 
"in the form of a quota" within the meaning of Article XVI:2(c). 
6.411  We also recall that a Member does not resp ect its GATS market access obligations under 
Article XVI:2(a) and Article XVI:2(c) if it does not allow market access to the whole or part of a scheduled sector.  Section 22-25A-8 of the S.D. Codi fied Laws concerns "gambling", which is part of 
the services covered by the US commitment under sub- sector 10.D.  Therefore, through § 22-25A-8 
of the S.D. Codified Laws, the United States restri cts market access to part of a scheduled sector, 
namely, "gambling". 
6.412  Since the United States has inscribed "None" in the market access column under sub-sector 
10.D , it cannot maintain limitations referred to in Artic le XVI:2.  As § 22-25A-8 of the S.D. Codified 
Laws contains limitations that fall within the sc ope of Article XVI:2(a) and Article XVI:2(c), the 
United States is according less favourable treatment than  that provided for in its Schedule contrary to 
Article XVI:1 and Article XVI:2.  Therefore, we conc lude that § 22-25A-8 of the S.D. Codified Laws 
is inconsistent with Artic le XVI:1 and Article XVI:2. 
Utah 
6.413  Section 76-10-1102 of the Utah Code Ann. provides as follows: 
"(1) A person is guilty of gambling if he: (a) participates in gambling; 
(b) knowingly permits any gambling to be played, conducted, or dealt upon or in any 
real or personal property owned, rented, or under the control of the actor, whether in 
whole or in part; or 
(c) knowingly allows the use of any video gaming device that is: (i) in any business establishment or public place; and 
(ii) accessible for use by any person within the establishment or public place. 
(2) Gambling is a class B misdemeanor, provi ded, however, that any person who is 
twice convicted under this section shall be guilty of a class A misdemeanor." 
6.414  Section 76-10-1102(b) of the Utah Code Ann. concerns service suppliers , in particular, those 
who knowingly permit any gambling to be played, conduc ted, or dealt upon or in any real or personal 
property owned, rented, or under the control of that person, whether in whole or in part.  Therefore, 
we consider that § 76-10-1102(b) of the Utah Code  Ann. concerns "service suppliers" within the 
meaning of Article XVI:2(a).   
6.415  Section 76-10-1102(b) of the Utah Code Ann. can  also be read to concern the treatment of 
services  operations  or service output  because it effectively prohibits the supply of gambling services.  
Therefore, we consider that §76-10-1102(b) of the Utah Code Ann. also concerns "service operations" 
or "service output" within the meaning of Article XVI:2(c). 
6.416  We recall that a ban on the use of one, several or all means of delivery included in mode 1 
constitutes a "zero quota" for, respectively, one, several  or all of those means of delivery.  Under § 76- WT/DS285/R 
 Page 227 
 
 
10-1102(b) of the Utah Code, service suppliers  seeking to conduct a gambling business through all 
means included in mode 1 are prohibited from doing so.  Further, services operations  and service 
output  involving a gambling business that uses any of the means included in mode 1 are also 
prohibited under § 76-10-1102(b) of the Utah Code.  Accordingly, the Panel considers that § 76-10-
1102(b) of the Utah Code contains a limitation "in the form of numerical quotas" within the meaning 
of Article XVI:2(a) and a limitation "in the form of  a quota" within the meaning of Article XVI:2(c). 
6.417  We also recall that a Member does not resp ect its GATS market access obligations under 
Article XVI:2(a) and Article XVI:2(c) if it does not allow market access to the whole or part of a scheduled sector.  Section § 76-10-1102(b) of the Ut ah Code concerns "gambling", which is part of 
the services covered by the US commitment under sub-sector 10.D.  Therefore, through 
§ 76-10-1102(b) of the Utah Code, the United States  restricts market access to part of a scheduled 
sector, namely, "gambling". 
6.418  Since the United States has inscribed "None" in the market access column under sub-sector 
10.D , it cannot maintain limitations referred to in Article XVI:2.  As § 76-10-1102(b) of the Utah 
Code contains limitations that fall within the sc ope of Article XVI:2(a) and Article XVI:2(c), the 
United States is according less favourable treatment than  that provided for in its Schedule contrary to 
Article XVI:1 and Article XVI:2.  Therefore, we c onclude that § 76-10-1102(b) of the Utah Code is 
inconsistent with Article XVI:1 and Article XVI:2. 
Cumulative Effect of the Wire Act, the Travel Act (when read together with relevant state 
laws) and the Illegal Gambling Business Act (when read together with the state laws of 
Louisiana, Massachusetts, South Dakota and Utah) 
6.419  As noted above, the Wire Act, the Travel Act (when read together with the relevant state 
laws), the Illegal Gambling Business Act (when read t ogether with the relevant state laws), § 14:90.3 
of the Louisiana Rev. Stat. Ann., § 17A of chap ter 271 of Massachusetts A nn. Laws, § 22-25A-8 of 
the South Dakota Codified Laws, and 76-10-1102(b) of the Utah Code concern "service suppliers" 
within the meaning of Article XVI:2(a) and "ser vices operations" and "service output" within the 
meaning of Article XVI:2(c).   
6.420  We recall that a ban on the use of one, several or all means of delivery included in mode 1 
constitutes a "zero quota" for, respectively, one, several  or all of those means of delivery.  The Panel 
is of the view that § 14:90.3 of the Louisiana Re v. Stat. Ann., § 17A of chapter 271 of Massachusetts 
Ann. Laws, § 22-25A-8 of the South Dakota Codified  Laws, and § 76-10-1102(b) of the Utah Code 
together prohibit the supply of gambling and bettin g services by all means of delivery included in 
mode 1.  Moreover, the cumulative effect of the Wi re Act, the Travel Act (when read together with 
the relevant state laws), the Illegal Gambling Business  Act (when read together with the relevant state 
laws), is to prohibit all means of delivery include d in mode 1 for all gambling and betting services that 
are sought to be supplied by Antigua.    
(iii) Conclusion 
6.421  In the Panel's view, the following laws are in  violation of Article XVI:1 and Article XVI:2, 
subparagraphs (a) and (c) of the GATS: 
(a) Federal laws 
(i) the Wire Act; 
(ii) the Travel Act (when read together with the relevant state laws); and WT/DS285/R 
Page 228  
 
(iii) the Illegal Gambling Business Act (when read together with the relevant state 
laws). 
(b) State laws: 
(i) Louisiana: § 14:90.3 of the La. Rev. Stat. Ann.; 
(ii) Massachusetts: § 17A of chapter 271 of Mass. Ann. Laws; 
(iii) South Dakota: § 22-25A-8 of the S.D. Codified Laws; and 
(iv) Utah: § 76-10-1102(b) of the Utah Code. 
E. CLAIMS OF VIOLATION OF THE UNITED STATES ' NATIONAL TREATMENT COMMITMENT UNDER 
ARTICLE  XVII OF THE GATS  
1. Claims and main arguments of the parties 
6.422  Antigua submits that federal and state laws, applications thereof and related practices 
specifically prohibit or prevent the cross-border s upply of gambling and betting services by Antigua 
to the United States whereas the domestic supply of  such services, whether by remote means or 
otherwise, within US states by authorized domestic suppliers is permitted.  An tigua submits that this 
results in less favourable treatment of Antiguan gambling and betting services and suppliers of such 
services in the United States in violation of Article XVII of the GATS.865   
6.423  The United States argues that Antigua has faile d to demonstrate that any US measure is 
inconsistent with Article XVII of the GATS.  Acco rding to the United States, Antigua has failed to 
prove that remote gambling and betting services are "like" non-remote gambling services and suppliers.
866  The United States further argues that Antigua  has failed to demonstrate that its services 
and service suppliers receive less favourable treatment.  According to the United States, even if it 
were to be assumed that likeness could be estab lished between some remotely supplied gambling and 
betting services and service suppliers and non-re mote gambling and betting service and service 
suppliers, the United States may, nonetheless, mainta in a regulatory distinction between remote and 
non-remote supply of such services given that such  a distinction does not afford less favourable 
treatment to foreign suppliers on the basis of national origin.867   
2. Assessment by the Panel 
6.424  As a preliminary matter, the Panel is of the view that it needs to address the question of 
whether it should consider Antigua's Article XVII clai m.  This issue has arisen because, in its Panel 
request, Antigua claimed a violation, inter alia , of Article XVII of the GATS, noting that "the central, 
regional or local authorities of the United States allo w numerous operators of United States origin to 
offer all types of gambling and betting services in the United States. ...  There appears to be no 
possibility for foreign operators, however, to obtai n an authorization to supply gambling and betting 
services from outside the United States."868  In its submissions, however, Antigua has since 
questioned the need for the Panel to consider its Article XVII claim.  Antigua submits that the 
relationship between Articles XVI and XVII of the GATS is one of "practical hierarchy" in which Article XVI concerns regulation that affects market access whereas Article XVII concerns regulation 
that distorts competition in favour of domestic suppliers in cases where market access has been 
                                                      
865 Antigua's first written submission, para. 3; Antigua's second written submission, para. 39. 
866 United States' second written submission, paras. 28 et seq . 
867 United States' second written submission, paras. 59 et seq .  
868 Request for the Establishment of a Panel by Antigua and Barbuda, WT7DS285/2, p. 1.  WT/DS285/R 
 Page 229 
 
 
granted.  Antigua submits that, in this case, a findi ng by the Panel of violation of Article XVI obviates 
the need to assess whether Article XVII has also been violated.869 
6.425  In deciding whether to exercise judicial economy over Antigua's Article XVII claim, the 
Panel recalls that the principle of judicial economy is recognized in WTO law.870   
6.426  The Panel recalls that it has found that a nu mber of the challenged US measures are in 
violation of Article XVI.  We are of the view th at the Panel does not need to examine whether the 
challenged measures are also inconsistent with th e United States' national treatment obligations under 
Article XVII of the GATS in order to assist the parti es in resolving the dispute at issue.  We believe 
that the essence of Antigua's claims will be addressed by a finding on Article XVI alone.  Therefore, the Panel exercises judicial economy with regard to Antigua's claim under Article XVII. 
F. C
LAIMS OF VIOLATION UNDER ARTICLE  VI OF THE GATS  
1. Claims and main arguments of the parties 
6.427  Antigua argues that the United States has violat ed Article VI:1 of the GATS by failing to 
ensure that "all measures of general application affecting trade in services are administered in a 
reasonable, objective and impartial manner."  The United States maintains numerous laws and 
regulations prohibiting the supply of gambling a nd betting services unless specific authorization has 
been granted.  Antigua submits that it is im possible for foreign service suppliers to obtain 
authorization to supply services on a cross-border basis or even to a pply for such an authorization.  
However, exemptions from these laws have been gr anted to gambling operators of US origin, but not 
to foreign operators.  Antigua argues that this cons titutes a violation of Article VI:1 of the GATS.  
Antigua further argues that Article VI:3 implies that  a WTO Member is obliged to make authorization 
procedures that are open to domestic service supplie rs also available to suppliers from other WTO 
Members that may want to supply services for whic h a commitment has been made.  US domestic 
service providers can and do qualify for authorizat ion to offer gambling and betting services, but 
Antiguan providers cannot.  Antigua submits that gi ven that the cross-border supply of gambling and 
betting services is prohibited, Antigua fails to see why Antiguan operators would have filed any 
applications for authorization, much less under wh at authority such a filing could have been made.871 
6.428  The United States replies that Antigua's claim under Article VI of the GATS does not 
correspond to the text of this provision.  In partic ular, Antigua has failed to meet its burden of proof 
under Article VI:1 to show that particular measure s are not "administered in a reasonable, objective, 
and impartial manner".  According to the United States, Antigua has provided no evidence about the 
alleged flaws in the administration of any of the meas ures identified in its Panel request.  In fact, such 
measures apply equally to all services and service pr oviders, regardless of origin, and are routinely 
applied against domestic as well as foreign law-breakers.  The United States further argues that, as Antigua did not show that the United States has undertaken any commitments in gambling services in 
general and cross-border gambling services in pa rticular, Antigua cannot demonstrate that 
Article VI:3 is relevant in this dispute.  More over, Antigua has pointed to no occasions on which US 
authorities have failed to inform Antiguan suppliers  regarding decisions on their applications for 
authorization.  Indeed, Antigua has not demonstrat ed that its gambling and betting service suppliers 
have ever filed any relevant applications.  Acco rding to the United States, Antigua appears to be 
seeking something that Article VI:3 on its face do es not provide – namely, a requirement that the 
                                                      
869 Antigua's reply to Panel question No. 6.  
870 See paras. 6.15 - 6.18 above. 
871 Antigua's first written submission, paras. 196-199;  Antigua's first oral statement, paras. 104-106. WT/DS285/R 
Page 230  
 
United States give foreign suppliers the right to pr ovide services that even its domestic suppliers do 
not have a right to provide.
872 
2. Relevant GATS provisions 
6.429  Article VI (Domestic Regulation) pr ovides in relevant part as follows: 
"1. In sectors where specific commitme nts are undertaken, each Member shall 
ensure that all measures of general application affecting trade in services are 
administered in a reasonable, objective and impartial manner. 
[...] 3. Where authorization is required for the supply of a service on which a 
specific commitment has been made, the co mpetent authorities of a Member shall, 
within a reasonable period of time after th e submission of an application considered 
complete under domestic laws and regulations, inform the applicant of the decision 
concerning the application.  At the request of the applicant, the competent authorities 
of the Member shall provide, without undue delay, information concerning the status 
of the application. 
[...]" 
3. Assessment by the Panel 
6.430  For the reasons mentioned in Section VI.C above of our Report, we will confine our 
consideration of Antigua's claims under Article VI to  three US federal laws (namely the Wire Act, the 
Travel Act and the Illegal Gambling Business Act) and to the laws of eight US states (namely, Colorado: § 18-10-103 of the Colorado Revised Statutes; Louisiana: § 14:90.3 of the La. Rev. Stat. 
Ann.;  Massachusetts: § 17A of chapter 271 of M ass. Ann. Laws; Minnesota: §§ 609.75, Subdivisions 
2–3 and 609.755(1) of Minn. Stat. Ann; New Jersey: pa ragraph 2 of N.J. Const. Art. 4, Sec. VII and 
§ 2A:40-1 of the N.J. Code; New York: § 9 of Art. I of N.Y. Const. and § 5-401 of the N.Y. Gen. 
Oblig. L.; South Dakota: §§ 22-25A-1 - 22-25A-15 of the S.D. Codified Laws; and Utah: § 76-10-
1102 of the Utah Code Ann.) 
6.431  We will now turn to whether Antigua has me t its prima facie burden that these laws are 
inconsistent with Article VI, pa ragraphs 1 and 3, of the GATS. 
6.432  The Panel is of the view that Article VI:1 do es not apply to measures of general application 
themselves but, rather, to the administration  of these measures.  Article VI:3 imposes transparency 
and due process obligations with respect to the pro cessing of applications for authorization to supply 
in a sector where specific commitments have been undertaken.  Therefore, Articles VI:1 and VI:3 
contain disciplines of a procedural nature. 
6.433  The Panel also notes the very vague and general nature of the arguments advanced by Antigua 
in regard to the alleged violation under Article VI.  For instance, Anti gua refers to the "numerous laws 
and regulations" maintained by the United States.873  Antigua also asserts that the "United States 
domestic service providers can and do qualify for au thorization to offer gambling and betting services.  
                                                      
872 United States' first submission, paras. 104-107.  See also United States' first oral statement, para. 53 
and United States' second written submission, para. 70. 
873 Antigua's first written submission, para. 197.  WT/DS285/R 
 Page 231 
 
 
Yet, Antiguan service providers cannot."874  The Panel also notes that Antigua did not refer to any 
violation of Article VI in its second written s ubmission, nor in its second oral statement. 
6.434  In relation to its claim under Article VI:1, the Panel asked Antigua to specify "what 'measures 
of general application' are not begin 'administered in a reasonabl e, objective and impartial manner' 
and why".  Antigua responded 
"The general approach to gambling law in the United States is that all gambling and 
betting is prohibited unless a specific authorization has been given.  Thus, the United States first maintains its "measures of gene ral application"—the state and federal 
measures that act to prohibit the provision of gambling and betting services in the United States.  Overlaying the general prohi bitions are the state and federal measures 
that authorize certain persons to provide  certain gambling and betting services under 
a wide and disparate variety of situatio ns.  [footnote omitted]  By not providing a 
method by which Antiguan suppliers can obtain authorization to offer their services into the United States, the United States is in violation of Article VI:1."
875 
6.435  When asked by the Panel to identify and provide  details of instances when "authorization to 
supply" in the United States was refused, Antigua replied that: 
"[...]  What was meant here was not that  Antiguan operators had applied to supply 
gambling and betting services into the United States and were refused — the point was that under United States law, it is impossible for Antiguan suppliers to meet any authorization criteria.  [...]"
876 
6.436  The Panel also asked Antigua to specify what "authorization procedures" it was referring to in 
support of its claim of violation of Artic les VI:1 and VI:3, Antigua replied:   
"The answer to this question is the same as [in paragraph 6.435 above].  It is not 
possible for Antiguan service suppliers to obtain authorization to provide gambling 
and betting services into the United States.  This violates Article VI:1 of the GATS because the 'authorization procedures' by their very terms exclude Antiguan suppliers 
and thus cannot be considered 'administere d in a reasonable, obj ective and impartial 
manner'.  This violates Article VI:3 becau se the inability to apply for authorization 
makes it impossible for the United States to comply with the requirements of 
Article VI:3."
877 
6.437  Antigua's claims under Article VI:1 and under Article VI:3 are based on the premise that 
suppliers wishing to supply gambli ng and betting services in the United States require authorization to 
supply and that Antiguan suppliers are unable to obtain such authorization.  The Panel notes, 
however, that Antigua has not specifically identifi ed which "state and fede ral measures" and which 
provisions of those measures impose such authoriza tion requirements.  Nor has it demonstrated that 
its gambling and betting service suppliers have ever filed any applications to obtain such 
authorization.  In fact, paragraph 6.435 indicat es that Antiguan suppliers have never made such 
applications. Therefore, the Panel is of the view that Antigua has not made a prima facie 
demonstration that the measures at issue are inconsistent with Articles VI:1 and VI:3. 
                                                      
874 Antigua's first oral statement, para. 106. 
875 Antigua's reply to Panel question No. 28. 
876 Antigua's reply to Panel question No. 11. 
877 Antigua's reply to Panel question No. 27. WT/DS285/R 
Page 232  
 
G. C
LAIM UNDER ARTICLE  XI OF THE GATS  
1. Claims and main arguments of the parties 
6.438  Antigua submits that the United States maintain s measures that restrict international money 
transfers and payments relating to the cro ss-border supply of gambling and betting services.878  I n  
particular, Antigua points to the laws of the state of  New York that render contracts that are based on 
wagers or bets void879 as well as an example of an "enforce ment measure" taken by the New York 
Attorney General against a financial intermed iary that provides Internet payment services.880  I n  
Antigua's view, the purpose of these measures is to prevent foreign suppliers of gambling and betting 
services from offering their services on a cross-border basis.881  Antigua argues that, therefore, these 
measures violate Article XI:1 of the GATS. 
6.439  The United States submits that both the laws and the enforcement measure in the form of an 
agreement between a state Attorney General and a financial intermediary upon which Antigua relies 
are neutral regarding the destination of payments.882 With respect to Antigua's reliance upon an 
agreement between a state Attorney General and a fi nancial intermediary, this "measure" is contained 
in Section III of Antigua's Panel request and, th erefore, following the Panel's preliminary ruling, 
cannot be examined as a separate, autonomous measure.883  Further, according to the United States, 
Antigua has provided no evidence that the provis ions of the agreement in question result in 
restrictions on the movements of funds across bor ders.  The United States submits that, on the 
contrary, by the terms of the agreement, it applies without regard to whether the payments in question 
are destined for further transfer to a domestic or international destination.884  The United States further 
submits that, insofar as Antigua relies upon the agr eement in question as evidence of the application 
of the laws of the state of New York, the agreement is  not an application of those laws.  Rather, it is a 
mutual settlement between the relevant contracting parties.885 
2. Relevant GATS provisions 
6.440  Article XI of the GATS (Payments and Transfers) provides that: 
"1. Except under the circumstances envisaged in Article XII [Restrictions to 
Safeguard the Balance of Payments], a Member shall not apply restrictions on 
international transfers and payments for cu rrent transactions relating to its specific 
commitments. 
2. Nothing in this Agreement shall a ffect the rights and obligations of the 
members of the International Monetary Fund  under the Articles of Agreement of the 
Fund, including the use of exchange actions which are in conformity with the 
Articles of Agreement, provided that a Member shall not impose restrictions on any 
capital transactions inconsistently with its specific commitments regarding such 
transactions, except under Article XII or at the request of the Fund." 
                                                      
878 Antigua's first written submission, para. 200. 
879 Antigua's reply to Panel question No. 29. 
880 Antigua's first oral statement, para. 108; Antigua's reply to Panel question No. 29.  
881 Antigua's first oral statement, paras. 107–110.  
882 United States' second oral statement, para. 71. 
883 United States' second oral statement, para. 70. 
884 United States' first written submission, para. 110. 
885 United States' second oral statement, para. 71.  WT/DS285/R 
 Page 233 
 
 
3. Assessment by the Panel 
6.441  Article XI has not, as yet, been the subject of in terpretation or applicati on by either panels or 
the Appellate Body.  In light of this and taking into account the limited facts and arguments submitted 
by the parties with respect to Antigua's claim under Article XI, we believe that there is not sufficient 
material on record to enable us to undertake a meaningful analysis of this provision and its specific 
application to the facts of this case.  Moreover,  in our view, the findings of violation under 
Article XVI in Section VI.D above of our Report should allow the parties to settle this dispute, even 
in the absence of a ruling on Antigua's Article XI cl aim.  We will, therefore, exercise judicial 
economy and not rule on Antigua's claim under Article XI.886  
6.442  However, the Panel wants to emphasize that Ar ticle XI plays a crucial role in securing the 
value of specific commitments undertaken by Me mbers under the GATS.  Indeed, the value of 
specific commitments on market access and national treatment would be seriously impaired if Members could restrict international transfers a nd payment for service transactions in scheduled 
sectors.  In ensuring, inter alia , that services suppliers can receive payments due under services 
contracts covered by a Member's specific commitment, Article XI is an indispensable complement to 
GATS disciplines on market access and national treatment.  At the same time, the Panel is of the view 
that Article XI does not deprive Members from regula ting the use of financial instruments, such as 
credit cards, provided that these regulations are cons istent with other rele vant GATS provisions, in 
particular Article VI. 
H. D
EFENCE UNDER ARTICLE  XIV OF THE GATS  
1. Claims and main arguments of the parties 
6.443  The United States submits that, because the measur es that have been challenged by Antigua in 
this dispute serve important policy objectives that fall within Article XIV of the GATS, they benefit from the exceptions of Article XIV(a) and Article XI V(c).  Moreover, they are applied in a way that 
complies with the requirements of the chapeau of Article XIV of the GATS.
887 
6.444  In relation to its defence under Article XIV(a), the United States argues that the Wire Act, the 
Travel Act and the Illegal Gambling Business Ac t are necessary to protect "public morals" and 
"public order" within the meaning of Article XIV(a) because, inter alia , remote gambling is 
particularly vulnerable to use by minors who ar e prohibited from gambling or can be used for 
laundering the proceeds of organized crime.888  Antigua questions the United States' argument that the 
US measures prohibiting the remote supply of ga mbling and betting services are necessary to protect 
public morals and public order on the basis, inter alia , that the United States is a significant consumer 
of gambling and betting services and that state-sanctioned gambling opportunities are available in 
48 states.889 
6.445  With respect to its defence under Article XIV(c) , the United States argues that the Wire Act, 
the Travel Act and the Illegal Gambling Business Act serve as law enforcement tools to secure 
compliance with other WTO-consistent US laws, in particular, state gambling laws and criminal laws 
relating to organized crime.890  Antigua argues that the United States' defence under Article XIV(c) 
should fail because it has not submitted sufficient info rmation on the laws upon which it seeks to rely 
for its defence under Article XIV(c).  Antigua submits  that the burden on a defending party to identify 
                                                      
886 Concerning the lack of sufficient  facts for carrying out a legal anal ysis, see, for instance, Appellate 
Body Report on EC – Asbestos , paras. 78-83.  Concerning judicial economy, see our remarks in section 5 of the 
Introduction to this Report. 
887 United States' reply to Panel question No. 44. 
888 United States' second written submission, paras. 111-116. 
889 See Antigua's first written submission, paras. 80 and 108. 
890 United States' second written submission, paras. 95-106. WT/DS285/R 
Page 234  
 
such laws is, at the least, similar to that of a complaining party who seeks to challenge a measure in 
dispute settlement proceedings; both must establish th at "measures" with the alleged effect exist.
891  
The United States responds that Members' legislati on is presumed to be WTO-consistent, including all 
legislation invoked by the United States in support of its Article XIV defence.892 
2. Relevant GATS provisions  
6.446  Article XIV of the GATS provides in relevant part that: 
"Subject to the requirement that such me asures are not applied in a manner which 
would constitute a means of arbitrary or unjustifiable discrimination between 
countries where like conditions prevail, or a disguised restriction on trade in services, 
nothing in this Agreement shall be constr ued to prevent the adoption or enforcement 
by any Member of measures:  
(a) necessary to protect public morals or to maintain public 
order;5 
(footnote original) 5 The public order exception may be invoked only 
where a genuine and sufficiently serious threat is posed to one of the 
fundamental interests of society. 
...   (c) necessary to secure compliance with laws or regulations 
which are not inconsistent with the provisions of this Agreement 
including those relating to:  
(i) the prevention of deceptive and fraudulent practices or to 
deal with the effects of a default on services contracts;  
(ii) the protection of the privacy of individuals in relation to the 
processing and dissemination of person al data and the protection of 
confidentiality of individual records and accounts;  
(iii) safety;  
[...]" 
3. Assessment by the Panel 
(a) Introduction 
6.447  Since this is the first occasion on which Ar ticle XIV of the GATS has been invoked by a 
Member in a WTO dispute, the Panel is unable to  avail itself of prior jurisprudence under the GATS 
for possible guidance. 
6.448  However, in EC – Bananas III , the Appellate Body confirmed that jurisprudence under the 
GATT 1994 could be relevant for the interpretation of analogous provisions contained in the 
GATS.
893  Given the textual similarity between Artic le XX of the GATT 1994 and Article XIV of the 
GATS, and the similar purposes that both Articles are designed to serve, we consider that 
                                                      
891 Antigua's comments on the United States' reply to Panel question No. 45. 
892 United States' reply to Panel question No. 44. 
893 Appellate Body Report on EC – Bananas III , para. 231.  WT/DS285/R 
 Page 235 
 
 
GATT/WTO jurisprudence in relation to the former may be relevant and useful in the interpretation of 
the latter.  
6.449  In accordance with the Appellate Body's guidance in US – Gasoline894, US - Shrimp895 and 
Korea – Various Measures on Beef 896 in respect of Article XX of the GATT 1994, we believe that a 
measure found to be inconsistent with one or several  of the substantive obligations of the GATS must 
be subjected to a two-tiered analysis in order for it to  be justified under Article XIV.  Specifically, that 
a measure must: 
(a) fall within the scope of one of the recognized  exceptions set out in paragraphs (a) to 
(e) of Article XIV in order to enjo y provisional justification; and  
(b) meet the requirements of the introductory provisions of Article XIV, the so-called 
"chapeau". 
6.450  In US – Wool Shirts and Blouses , the Appellate Body stated that the burden of proof rests 
upon the party, whether complaining or defending, w ho asserts the affirmative of a particular claim or 
defence.897  Accordingly, a party seeking to invoke Article XIV of the GATS bears the burden of 
proof to demonstrate that the various elements comprising a defence under this Article have been 
fulfilled.  
6.451  We also note that the Appellate Body in EC – Hormones  stated that: 
"It is also well to remember that a prima facie case is one which, in the absence of 
effective refutation by the defending party, re quires a panel, as a matter of law, to rule 
in favour of the complaining party presenting the prima facie case."898 
We consider that this statement is equally applicable in respect of a defence invoked by a Member 
under Article XIV of the GATS.  More particularly, th e Panel is of the view that, if a defending party 
in a case has made a prima facie demonstration that a measure fulfils the requirements of Article XIV, in the absence of "effective refutation" by the compla ining party, a panel must rule in favour of the 
defending party.    
6.452  Finally, we recall that the Appellate Body has indicated that, when applying Article XX of the 
GATT 1994 in a given case, a balance needs to be struck between the ma rket access right of a 
Member to invoke an exception under Article XX a nd the duty of that same Member to respect the 
treaty rights of other Members.
899  In our view, this statement is eq ually applicable to the application 
of Article XIV of the GATS. 
(b) Measures at issue 
6.453  The United States seeks to defend, under Artic le XIV of the GATS, three of the federal 
statutes that have been challenged by Antigua in th is dispute, namely, the Wire Act, the Travel Act 
and the Illegal Gambling Business Act.  The United States has not sought to defend the state laws 
challenged by Antigua independently  of the Illegal Gambling Business Act.  However, throughout the 
present proceedings the United States has argued that the prohibition in the United States against the 
remote supply of gambling and betting services, rega rdless of whether enforced through state or 
federal laws, is based on the same policy concerns discu ssed hereafter.  We recall that, in this dispute, 
                                                      
894 See Appellate Body Report on US – Gasoline , p. 22. 
895 See Appellate Body Report on US – Shrimp , paras.  115–119 .  
896 See Appellate Body Report on Korea – Various Measures on Beef , para. 156. 
897 Appellate Body Report on US – Wool Shirts and Blouse , pp. 15-16. 
898 Appellate Body Report on EC – Hormones , para. 104. 
899 Appellate Body Report on US – Shrimp , para. 156.   WT/DS285/R 
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we are examining the Travel Act (when read together with the relevant state laws)
 and the Illegal 
Business Gambling Act (when read together with the relevant state laws).     
6.454  We have found above that the Wire Act, the Trav el Act (when read together with the relevant 
state laws) and the Illegal Gambling Business Act (when read together with the relevant state laws) are inconsistent with US obligations under Ar ticle XVI of the GATS by virtue of specific 
commitments the United States has undertaken in its GATS Schedule.  Accordingly, we will now 
examine whether these laws can be justified under Artic le XIV.  More specifically, we will examine 
first whether these laws can be provisionally jus tified under Article XIV(a) and Article XIV(c), the 
two provisions specifically invoked by the United States.  If provisionally justified, we will then consider whether the United States has successf ully met the requirements of the chapeau of 
Article XIV with respect to these measures.  In our  view, if we find the Travel Act and the Illegal 
Gambling Business Act are justified under Article XIV,  the relevant state laws that are otherwise 
inconsistent with US obligations under Article XVI shall also be deemed  to be justified under 
Article XIV, to the extent that they are enforced by and through th e Travel Act and/or the Illegal 
Gambling Business Act and for, inter alia  the same policy concerns.  
(c) Provisional justification under Article XIV(a) 
(i) The legal standard under Article XIV(a) 
6.455  Pursuant to the text of Article XIV(a), in  determining whether a challenged measure is 
provisionally justified under that Article, the Memb er invoking that provision must demonstrate two 
elements, namely:   
(a) the measure must be one designed to "prot ect public morals" or to "maintain public 
order"; and 
(b) the measure for which justification is claimed must be "necessary" to protect public 
morals or to maintain public order.  
6.456  The Panel will now proceed to exam ine these two elements in turn. 
Measures ... to "protect public morals" or to "maintain public order" 
6.457  The United States argues that the challenged measu res are necessary to protect public morals 
and to maintain public order under Article XIV(a).900  The United States submits that the remote 
supply of gambling and betting services raises signifi cant concerns relating to the maintenance of 
public order and the protection of public morals.  According to the United States, remote supply of 
gambling and betting services is, generally speaking, particularly vulnerable to various forms of 
criminal activity, especially organized crime.  Maintaining a society in which persons and their 
property exist free of the destructive influence of or ganized crime is both a matter of "public morals" 
and one of "public order".901  Protecting children from uncontrolle d gambling settings is certainly a 
matter of "public morals".902 
6.458  The United States argues that the term "public or der" refers to the familiar civil law concept 
denoted in French by the expression "ordre public " and its functional counterpart in common law 
systems, the concept of "public policy".  The Unite d States further submits that the term "public 
                                                      
900 United States' second written submission, paras. 111 et seq . 
901 United States' second written submission, paras. 108-110. 
902 United States' second written submission, para. 114.  WT/DS285/R 
 Page 237 
 
 
morals" refers to standards of right and wrong that can be descri bed as "belonging to, affecting, or 
concerning the community or nation."903  
6.459  The Panel will first examine the meaning of the terms "protect public morals" and "maintain 
public order" in an effort to understand their scope .  The Panel will interpret Article XIV(a) of the 
GATS in accordance with the ordinary meaning of th e words when read in their context and in light 
of the object and purpose of the GATS and the WTO Agreement   
6.460  The term "public morals" is used in Article XX(a) of the GATT 1994 but not defined and it 
has not been interpreted by any panel or the Appella te Body.  The term "public order" is likewise not 
specifically defined in the GATS, although the footnote  to Article XIV(a) indicates that the "public 
order" exception may be invoked only where a genuine and sufficiently serious threat is posed to one 
of the fundamental interests of society. 
6.461  We are well aware that there may be sensitiviti es associated with the interpretation of the 
terms "public morals" and "public order" in the co ntext of Article XIV.  In the Panel's view, the 
content of these concepts for Members can vary in time and space, depending upon a range of factors, 
including prevailing social, cultural, ethical and re ligious values.  Further, the Appellate Body has 
stated on several occasions that Members, in applying similar societal concepts, have the right to 
determine the level of protection that they consider appropriate.904  Although these Appellate Body 
statements were made in the context of Article  XX of the GATT 1994, it is our view that such 
statements are also valid with respect to the protection of publ ic morals and public order under 
Article XVI of the GATS.  More particularly, Me mbers should be given some scope to define and 
apply for themselves the concepts of "public morals" and "public order" in their respective territories, 
according to their own systems and scales of values. 
6.462  This being said, the Panel considers that, d espite the inherent difficulties and sensitivities 
associated with interpretation of the terms "public  morals" and "public order" in the context of 
Article XIV(a), we must nonetheless give meaning to these terms in order to apply them to the facts of in this case.
905  Indeed, the principle of effective treaty interpretation requires us to do so .  
6.463  In determining the ordinary meaning of the term s "public morals" and "public order", we turn 
to the Shorter Oxford English Dictionary .  "Public" is defined therein as: 
"Of or pertaining to the people as a whole;  belonging to, affecting, or concerning the 
community or nation."906 
The Panel believes that a measure that is sought to be  justified under Article XIV(a) must be aimed at 
protecting the interests of the people within a comm unity or a nation as a whole.  This is the case 
whether the measure is asserted to  be necessary to "protect public morals" or to "maintain public 
order" since both terms contain the word "public".    6.464  The word "morals" (noun, pl.) is defined therein as: 
"[...] habits of life with regard to right and wrong conduct."
907 
                                                      
903 United States' second written submission, para. 108. 
904 See Appellate Body Reports on Korea – Various Measures on Beef  , para. 176 and EC – Asbestos , 
para. 168. 
905 We recall the Appellate Body's instructions in the context of the interpretation of Article XX of the 
GATT 1994 in US – Shrimp , para. 155 
906 The Shorter Oxford English Dictionary , 2002.  
907 The Shorter Oxford English Dictionary , 2002. WT/DS285/R 
Page 238  
 
6.465  The Panel considers the term "public morals " denotes standards of right and wrong conduct 
maintained by or on behalf of a community or nation. 
6.466  The dictionary definition of the word "order" th at appears to be relevant in the context of 
Article XIV(a) reads as follows: 
"A condition in which the laws regula ting the public conduct of members of a 
community are maintained and observed; th e rule of law or constituted authority; 
absence of violence or violent crimes."
908 
6.467  We recall that drafters of the GATS clarified in footnote 5 that "[t]he public order exception 
may be invoked only where a genuine and sufficien tly serious threat is posed to one of the 
fundamental interests of society".  Hence, in our vi ew, the dictionary definition of the word "order", 
read together with footnote 5, suggests that " public order" refers to the preservation of the 
fundamental interests of a society,  as reflected in public policy and la w.  These fundamental interests 
can relate, inter alia , to standards of law, security and morality.  
6.468  Based on the dictionary definitions referred to above and taking into account the clarification 
added by the drafters of the GATS in footnote 5, we  believe that "public mo rals" and "public order" 
are two distinct concepts under Article XIV(a) of the GATS.  Nevertheless, to the extent that both 
concepts seek to protect largely similar values, some overlap may exist.   
6.469  For example, in this case, it could be argued that the prevention of underage gambling and the 
protection of pathological gamblers  relates to public morals, while th e fight against organized crime is 
rather a matter of public order.  The preven tion of money laundering and of fraud schemes could 
arguably relate to both public morals  and public order.  However, we are of the view that, in this 
dispute, it is not necessary to qualify various polic y considerations relied upon by the United States as 
relating either to "public mora ls" or to "public order".   
6.470  The following supplementary means of interpre tation may also be instructive.  Judge 
Lauterpacht, the elder, referred to "public order"  as the "fundamental national conceptions of law, 
decency and morality."  He further stated that "the protection of the interest of minors ... falls 
naturally within the notion of ordre public."909   
6.471  Examples of WTO Members that have relied on "public moral" grounds to justify certain 
restrictions include Israel and the Philippines.  In this regard, the 1999 Trade Policy Review of Israel 
observed that Israel maintained an import prohibitio n on "[t]ickets or publicity items for lottery or 
gambling" and identified the reason for this prohibition as "[p]ublic morals."910  Similarly, the 1999 
Trade Policy Review of the Philippines listed limita tions on foreign ownershi p of gambling operations 
(e.g., racetracks) under a heading that referred, inter alia,  to limitations "for reasons of ... risk to 
health and morals."911   
6.472  A historic example of the use of "moral" grounds to restrict certain activities was raised in the 
context of the Economic Committee of the League of  Nations, where a draft convention had been put 
forward that included an exception for "[p]rohib itions or restrictions imposed for moral or 
humanitarian reasons or for the suppression of imprope r traffic, provided that the manufacture of and 
                                                      
908 The Shorter Oxford English Dictionary , 2002.  
909 Case Concerning the Application of the Convention of 1902 Governing the Guardianship of Infants 
(Netherlands v. Sweden), 1958 I.C.J. 55, 90 (Judgme nt of 28 November) (sep. op. of J. Lauterpacht). 
910 Trade Policy Review - Israel - Report by the Secretariat , WT/TPR/S/58, table III.8 (1999). 
911 Trade Policy Review - The Philippine s - Report by the Secretariat , WT/TPR/S/59, table III.11 
(1999). The document does not specify precisely which reason is associated w ith the gambling ownership 
restriction, but from the context of the document it is reas onable to infer that the restriction is based on "morals" 
or "health and morals."  WT/DS285/R 
 Page 239 
 
 
trade in the goods to which the prohibitions relate are also prohibited or restricted in the interior of the 
country."912  It is reported that in the debate over th e proposed exception, the representative of Egypt 
asked whether a prohibition on the importation of fo reign lottery tickets would be covered by the 
moral exception.  The president of the conference stated that such prohibitions would be covered by the exception for measures adopted fo r "moral or humanitarian reasons."
913 
6.473  Other jurisdictions have accepted that gambli ng activities could be limited or prohibited for 
public policy considerations, in derogation of general treaty or legislative rules.914   
6.474  In light of the above, the Panel concludes that measures prohibiting gambling and betting 
services, including the supply of those services by the Internet, could fall within the scope of Article XIV(a) if they are enforced in pursuance of policies, the object and purpose of which is to 
"protect public morals" or "to maintain public order".  
Measures "necessary" to protect public mo rals or to maintain public order 
6.475  With respect to the requirement, under Article  XIV(a) of the GATS, that a measure be 
"necessary", the Panel notes that the Appellate Body in Korea – Various Measures on Beef  
established various parameters within which a dete rmination of whether a measure is "necessary" 
                                                      
912 See Abolition of Import and Export Prohibitions and Restriction, Commentary and Preliminary 
Draft International Agreement drawn up by the Economic  Committee of the League of  Nations to serve as a 
Basis for an International Diplomatic Conference, League of Nations Doc. C.E.1.22. 1927 II.13. pp. 10, 15 
(1927). 
913 International Conference for the Abolition of Im port and Export Prohibitions and Restrictions, 
Proceedings of the Conference, p. 110, League of Nations Doc. C.21.M.12. 19 28 II.7, p. 110 (1928). 
914 For instance, the European Court of Justice (ECJ) determined that national legislation which 
prohibits, subject to specified exceptions, the holding of  lotteries in a Member State and which, thus, wholly 
precludes lottery operators from other Member States from promoting their lotteries and selling their tickets, whether directly or through independent agents, in the Me mber State which enacted that  legislation, restricts the 
freedom to provide services, even though it is applicable without distinction.  However, the court considered 
that the particular features of lotte ries justify national authorities having a sufficient degree of latitude to 
determine what is required to protect the players and, more generally, in the light of the specific social and 
cultural features of each Member State,  to maintain order in society as re gards the manner in which lotteries are 
operated, the size of the stakes, and the allocation of prof its they yield and to decide  whether to restrict or 
prohibit them: Case C-275/92, Her Majesty's Customs and Excise v. Gerhart Schindler and Jörg Schindler , (24 
March 1994).  Further, in a more r ecent decision, the ECJ held that nati onal legislation which authorized the 
operation and playing of games of chance or gambling solely in casinos, in permanent or temporary gaming areas created by decree-law and which wa s applicable without distinction to its own nationals and nationals of 
other Member States constituted a barrier to the freedom to  provide services.  However, the ECJ found that this 
legislation was compatible with the EC Treaty in view of the concerns of social policy and the prevention of fraud which justified it.  The court noted, inter alia , that the considerations unde rlying the legislation at issue 
concerned "the protection of consumers, who are recipients of the services and the maintenance of order in 
society": Case C-6/01 – Associação Nacional de Operadores de Máquinas Recreativas (Anomar) and Others  
(11 September 2003).  We also note that the The River City Group reported that in virtually all parts of the 
world, gambling activities, when not prohibited entirely, have traditionally been subject to strict regulation, 
involving civil and criminal laws.  In view of technological developments, a number of countries have 
developed – or are in the process of developing – special legal framework for Internet gambling for instance, 
Australia, Austria, Belgium, Brazil, Denmark, Finla nd, Iceland, Italy, The Netherlands, Sweden, United 
Kingdom.  Other countries currently apply to Internet gambling the laws and regulations developed for 
traditional gambling [for instance, Canada, France.  The regulations targeting Internet gambling appear to us to 
be as stringent, if not more, that regulations applying to traditional forms of gambling.  Some countries seem to 
restrict drastically or even prohibit entirely Internet  gambling for instance, Esto nia, Hong Kong, Iceland, 
Norway, Uruguay: See Internet Gambling Report – Sixth Edition , Mark Balestra (Ed.), The River City Group, 
United States, 2003.    WT/DS285/R 
Page 240  
 
within the meaning of Article XX(d) of the GATT 1994
915 must be made.  Specifically, the Appellate 
Body noted that: 
"[T]he reach of the word 'necessary' is not limited to that which is 'indispensable' or 
'of absolute necessity' or 'inevitable'.  Measures which are indispensable or of 
absolute necessity or inevit able to secure compliance certainly fulfil the requirements 
of Article XX(d).  But other measures, too, may fall within the ambit of this 
exception.  As used in Article XX(d), the term 'necessary' refers, in our view, to a 
range of degrees of necessity.  At one end of this continuum lies 'necessary' understood as 'indispensable';  at the other end, is 'necessary' taken to mean as 
'making a contribution to'.  We consider that a 'necessary' measure is, in this 
continuum, located significantly closer to the pole of 'indispensable' than to the 
opposite pole of simply 'making a contri bution to'."  [original footnote omitted]
916  
The Panel is of the view that these statements are e qually applicable in the context of Article XIV of 
the GATS, including Article XIV(a).  
6.476  The Appellate Body in the same case articulat ed a "weighing and balancing" test as the basis 
for making a determination as to whether a me asure is "necessary" within the meaning of 
Article XX(d) of the GATT 1994.  In particular, the Appellate Body stated that a determination of 
whether a measure is necessary within the meaning of Article XX(d) of the GATT 1994:  
"[I]nvolves in every case a process of weighing and balancing a series of factors 
which prominently include the contributi on made by the compliance measure to the 
enforcement of the law or regulation at i ssue, the importance of the common interests 
or values protected by that law or regulation, and the accompanying impact of the law or regulation on imports or exports."
917   
6.477  On the basis of the articulation of the guiding principles for the "weighing and balancing" test 
by the Appellate Body in Korea – Various Measures on Beef  and, subsequently, in EC – Asbestos918, 
we believe that, in the context of Article XIV(a), we must assess the following in determining whether 
a measure is "necessary" to protect public  morals or to maintain public order: 
(a) the importance of interests or values that  the challenged measure is intended to 
protect.  (With respect to this requirement, the Appellate Body has suggested that, if the value or interest pursued is considered important, it is more likely that the measure is "necessary".)
919 
(b) the extent to which the challenged measure contributes to the realization of the end 
pursued by that measure.  (In relation to this requirement, the Appellate Body has suggested that the greater the extent to  which the measure contributes to the end 
pursued, the more likely that the measure is "necessary".)
920 
(c) the trade impact of the challenged measure.   (With regard to this requirement, the 
Appellate Body has said that, if the measure has a relatively slight trade impact, the 
more likely that the measure is "necessary" . The Appellate Body has also indicated 
                                                      
915 Article XX(d) of the GATT 1994 is textually anal ogous to Article XIV(c) of the GATS, which we 
consider below. 
916 Appellate Body Report on Korea – Various Measures on Beef , para. 161.  
917 Appellate Body Report on Korea – Various Measures on Beef , paras. 164-166.   
918 Appellate Body Report on Korea – Various Measures on Beef , para. 178;  Appellate Body Report on 
EC – Asbestos , para. 172. 
919 Appellate Body Report on Korea – Various Measures on Beef , para. 162. 
920 Appellate Body Report on Korea – Various Measures on Beef , para. 163.  WT/DS285/R 
 Page 241 
 
 
that whether a reasonably available WTO-cons istent alternative measure exists must 
be taken into consideration in applying this requirement.)921   
(ii) Applying the legal standard under Article XIV(a) to the facts of this case 
6.478  The Panel will consider in this section whet her the prohibition of the remote supply of 
gambling and betting services imposed by the three relevant US federal laws – namely, the Wire Act, 
the Travel Act (when read together with the rele vant state laws) and the Illegal Gambling Business 
Act (when read together with the relevant state laws) – are "necessary" to "protect public morals" 
and/or to "maintain public order." 
Are the challenged measures so as to "protect public morals" or to "maintain public order" 
within the meaning of Article XIV(a)? 
6.479  The United States argues that the remote supply of gambling and betting services raises 
significant concerns relating to the maintenance of public order and the protection of public morals.922  
According to the United States, the remote suppl y of gambling poses threats related to organized 
crime, money laundering, fraud and other criminal act ivities; risks to children given the availability of 
remotely supplied gambling and betting services to child ren; and particular health risks.  The United 
States submits that it is for these reasons that it places stringent restrictions on the ability of any 
operator to offer gambling and betting services by re mote supply, regardless of whether such services 
are supplied from the territory of another Member or from within the territory of the United States.923 
6.480  Antigua points to a 2001 report prepared by the United States Department of Defense 
evaluating the social impact of readily availa ble gambling machines, which concluded that the 
presence of military casinos did not have a negative e ffect on the morale or fi nancial stability of the 
United States forces, their family members and ot her persons – including foreign nationals – who 
gambled at the government-owned facilities.924  Antigua also submits that countries such as the 
United Kingdom have seen no insupe rable public interest issues fl owing from the move towards the 
online supply of gambling and betting services but, rather, have embraced it in a regulated context.925   
6.481  In the Panel's view, the eviden ce adduced establishes that the Wi re Act, the Travel Act (when 
read together with the relevant state laws) and th e Illegal Gambling Business Act (when read together 
with the relevant state laws) are measures to protect  "public morals or public order", for the following 
reasons. 
6.482  A 1961 report by the House of Representative on th e Wire Act issued shortly before its entry 
into force states that: 
"The purpose of the bill is to assist the various  States and the District of Columbia in 
the enforcement of their laws pertaining to gambling, bookmaking, and like offenses 
and to aid in the suppression of organized  gambling by prohibiting the use of wire 
communication facilities which are or will be used for the transmission of bets or wagers and gambling information in interstate and foreign commerce."
926 
 
6.483  With respect to the Travel Act, during heari ngs before the Judiciary Committee regarding the 
Attorney General's Programme to Curb Organized  Crime and Racketeering, the then Attorney 
                                                      
921 Appellate Body Report on Korea – Various Measures on Beef , paras. 163 and 166. 
922 United States' second written submission, para. 111. 
923 United States' first oral statement, para. 10. 
924 Antigua's first written submission, para. 86. 
925 Antigua's first written submission, para. 19. 
926 House of Representatives Report No. 87-967, pp. 1-2 (1961) contained in Exhibit US-30.   WT/DS285/R 
Page 242  
 
General, Robert F. Kennedy, stated that his prog ram, which included the Travel Act as well as the 
Wire Act, enabled the federal government to "take effective action against the racketeer who conducts 
an unlawful business but lives far from the scene in comfort and safety."
927 
6.484  We also note that during 2003 hearings befo re the Subcommittee on Crime, Terrorism and 
Homeland Security regarding the yet to be enact ed Unlawful Internet Gambling Funding Prohibition 
Act,  which , if passed, will prohibit Internet gambli ng in a similar way to the Wire Act and the Travel 
Act, reference was made to the threat of mone y laundering, organized crime, fraud and risks to 
children (i.e underage gambling) a nd health (i.e. pathological gambling) that are associated with 
Internet gambling.928  
6.485  With respect to the Illegal Gambling Business Ac t, in the statement of findings made in 
advance of enactment of that Act, Congress articulated a number of reasons justifying its enactment.  
In particular, reference was made to the fact that gambling income is the "lifeline of organized crime" 
and the means by which other illegal activities are fi nanced.  Further, Congress stated that gambling 
"preys upon society", especially the poor.  Fina lly, Congress stated that, from a law enforcement 
standpoint, "gambling is more susceptible than most organized crime activities to detection and 
prosecution."929  The United States has also indicated that US courts have confirmed that the Illegal 
Gambling Business Act is a measure against organized crime.930 
6.486  In our view, these Congressional statements re garding the respective purposes underlying the 
Wire Act, the Travel Act and the Illegal Gambling Business Act indicate that various arms of the government of the United States consider these Acts were adopted to address concerns such as those 
pertaining to money laundering, organized crim e, fraud, underage gambling and pathological 
gambling.  We consider that, insofar as the stat e gambling laws are enforced through the Illegal 
Gambling Business Act, those state laws ma y be considered to be enforced for, inter alia , the same 
purpose as the Illegal Gambling Business Act. 
6.487  In light of the above, we conclude that the c oncerns which the Wire Act, the Travel Act and 
the Illegal Gambling Business Act seek to address fa ll within the scope of "public morals" and/or 
"public order" under Article XIV(a).  In other words,  we find that the Wire Act, the Travel Act (when 
read together with the relevant state laws) and th e Illegal Gambling Business Act (when read together 
with the relevant state laws) are measures that ar e designed to "protect public morals" and/or "to 
maintain public order" in the United States within the meaning of Article XIV(a).   
Are the challenged measures "necessary" to protect public morals or to maintain public order? 
6.488  We now consider whether the Wire Act, the Travel Act and the Illegal Business Act (when 
read together with the relevant states laws) are "nece ssary" to protect public morals and/or to maintain 
public order.  In this regard, we recall that  we must assess taking into account the relevant 
jurisprudence of the Appellate Body referred to in paragraph 6.477 above: 
(a) the importance of the interests or values that these Acts are intended to protect;   
(b) the extent to which these Acts contribute to the realization of the ends respectively 
pursued by these Acts;  and   
(c) the respective trade impact of these Acts.   
                                                      
927 Testimony of Attorney General Robert Kennedy, Hearings Before the Senate Judiciary Committee 
on the Attorney General's Program to Curb Organized Crime and Racketeering, 87th Cong., 1st Sess., p. 4 
(1961) p. 15, Exhibit US-24. 
928 Exhibit US-5.  See, for example, pp. 1, 6, 10-11, 13. 
929 Congressional Record H9711contained in Exhibit US-32. 
930  See United States v. Box, 530 F.2d 1258, 1264-65 (5th Cir. 1976) contained in Exhibit US-31.  WT/DS285/R 
 Page 243 
 
 
Importance of interests or values protected 
6.489  The Congressional statements identified above in  paragraphs 6.482-6.485 indicate that these 
Acts are intended to protect society against the th reat of money laundering, organized crime, fraud 
and risks to children (i.e underage gambling) an d to health (i.e. pathological gambling).   
6.490  We again note comments made in 1961 by the then  Attorney General Robert F. Kennedy to 
describe the overall intended effect of the Attorney  General's Program to Curb Organized Crime and 
Racketeering, of which the Wire Act and the Travel Act were part:   
"These [hoodlums and racketeers who have b ecome so rich and so powerful] use 
interstate commerce and interstate communi cations with impunity in the conduct of 
their unlawful activities.  If we could curt ail their use of interstate communications 
and facilities, we could inflict a telling blow  to their operations.  We could cut them 
down to size. 
Mr. Chairman, our legislation is mainly  concerned with effectively curtailing 
gambling operations.  And we do this, Mr. Chairman, because profits from illegal gambling are huge and they are the primary source of the funds which finance 
organized crime, all throughout the country.
931 
6.491  In the Congressional statement of findings prefatory to the Illegal Gambling Business Act, 
Congress described the threat posed by organized crime which was the impetus for the enactment of 
that Act, in the following terms: 
"(1) organized crime in the United States is a highly sophisticated, diversified, and 
widespread activity that annually drains billions of dollars from America's economy 
by unlawful conduct and the illegal use of for ce, fraud, and corruption;  (2) organized 
crime derives a major portion of its powe r through money obtained from such illegal 
endeavors as syndicated gambling, loan sharking, the theft and fencing of property, the importation and distribution of narco tics and other dangerous drugs, and other 
forms of social exploitation; (3) this money and power are increasingly used to 
infiltrate and corrupt legitimate business a nd labor unions and to subvert and corrupt 
our democratic processes;  (4) organized cr ime activities in the United States weaken 
the stability of the Nation's economic system, harm innocent investors and competing organizations, interfere with free competition,  seriously burden interstate and foreign 
commerce, threaten the domestic security, and undermine the general welfare of the Nation and its citizens."
932 
6.492  On the basis of the foregoing, it is clear to us  that the interests and values protected by the 
Wire Act, the Travel Act (when read together with  the relevant state laws) and the Illegal Gambling 
Business Act (when read together with the relevant state laws) serve very important societal interests 
that can be characterized as "vital and important in the highest degree" in a similar way to the 
characterization of the protection of human life and h ealth against a life-threatening health risk by the 
Appellate Body in EC – Asbestos .933   
                                                      
931 Testimony of Attorney General Robert Kennedy, Hearings Before the Senate Judiciary Committee 
on the Attorney General's Program to Curb Organized Crime and Racketeering, 87th Cong., 1st Sess., p. 4 
(1961), p. 11 contained in Exhibit US-24.  
932 Congressional Statement of Findings and Purpose, Note on 18 USC § 1961, p. 812 contained in 
Exhibit US-35. 
933 Appellate Body Report on EC – Asbestos , para. 172. WT/DS285/R 
Page 244  
 
6.493  We accept that a Member may judge that stri ct controls may be needed to protect the 
above-mentioned societal interests.  However, in the process of "weighing and balancing" this factor 
against the others to which we must have regard, we consider that it is important to bear in mind that 
these interests – to protect society against the threat of money launde ring, organized crime, fraud and 
risks to children (i.e underage gambling) and health  (i.e. pathological gambling) – also exist in the 
context of the non-remote supply of gambling and be tting services.  Neither party has disputed this.
934  
Yet, in contrast to its treatment of the remote  supply of gambling and betting services, the United 
States does not prohibit outright the non-remote supply of gambling and betting services.  We acknowledge that there may be particular aspects associated with remote supply of gambling and 
betting services that may justify a difference in tr eatment as compared to the non-remote supply of 
such services.  However, reference must be ma de to the evidence at hand to determine whether 
particular aspects associated with the remote supply of gambling and betting services will justify a prohibition, particularly in light of the tolerant a ttitude displayed in some parts of the United States to 
the non-remote supply of such services.  We cons ider this issue in further detail below in our 
discussion of whether or not a WTO-consistent a lternative is reasonably available to the United 
States.
935 
Contribution to ends pursued 
6.494  As for the extent to which the Wire Act, the Tr avel Act (when read together with the relevant 
state laws) and the Illegal Gambling Business Act (when read together with the relevant state laws) contribute to the realization of the ends pursued by  those laws, we recall our finding above that these 
laws seek to address concerns pertaining to mone y laundering, organized crime, fraud, underage 
gambling and pathological gambling.
936  Given that the Wire Act and the Travel Act prohibit  the 
remote supply of gambling and betting services, wh ich has been associated  with each of these 
concerns937, these Acts must contribute, at least to some  extent, to addressing these concerns.  Further, 
the Illegal Gambling Business Act prohibits  conducting, financing, mana ging, supervising, directing 
or owning all or part of an "illegal gambling bus iness" which is defined as a gambling business which 
violates the law of a state (or political subdivision) of  the United States.  We consider that the Illegal 
Gambling Business Act must contribute, at least  to some extent, to addressing these concerns. 
Trade impact 
6.495  With respect to the trade impact of the Wire Ac t, the Travel Act (when read together with the 
relevant state laws) and the Illegal Gambling Business Act (when read together with the relevant state 
laws), Antigua argues that the effect of these laws  is total prohibition, which is the most trade-
restrictive approach possible.938  We have no doubt that these Acts have a significant restrictive trade 
impact.  Indeed, the United States has admitted as much  when arguing that a Member has "the right to 
                                                      
934 The United States submits that it "maintains and applies a regulatory distinction between remotely 
supplied gambling services and other gambling services, with the former subject to even tighter restrictions than 
the latter.  This distinction arises from numerous distinguishing law enforcement, consumer protection, and 
health concerns associated with the remote supply of gambling": United States' second written submission, 
para. 45.  The United States implicitly acknowledges in  this statement that la w enforcement, consumer 
protection, and health concerns also exist in the context of the non-remote s upply of gambling and betting 
services.  Antigua also submits that underage gambling, pathological gambling, money laundering, crime, fraud and consumer protection concerns exist in the cont ext of the non-remote supply of gambling and betting 
services: Antigua's first oral statement, paras. 70–87.  
935 See paras. 6.499-6.521 below. 
936 See para. 6.486 above. 
937 See paras. 6.499-6.521 below. 
938 Antigua's second oral statement, para. 71.  WT/DS285/R 
 Page 245 
 
 
heavily restrict a highly risky service (in this case,  gambling by remote suppl y) while allowing the use 
of a less risky service [in this case, gambling by non-remote means]".939   
6.496  In the assessment of the trade im pact, the Appellate Body in Korea – Various Measures on 
Beef referred to the GATT panel on US – Section 337  where the panel made clear that a Member must 
first explore and exhaust all GATT/WTO compa tible alternatives before resorting to WTO-
inconsistent alternatives.  940  In examining whether a reasonably available WTO-consistent alternative 
measure existed, the Appellate Body in Korea – Various Measures Affecting Beef examined the 
means that had been used by Kor ea to address the prevention of fra udulent conduct in relation to the 
sale of other food products.   
6.497  Recalling the Appellate Body's reasoning in Korea – Various Measures Affecting Beef, we 
need to consider whether the United States has, in other contexts, used measures other than a 
prohibition to address similar concerns to those that ar e alleged to be the basis for its justification in 
this case of the prohibition on the remote supply of gambling and betting services.  The only other 
relevant context to which reference has been ma de in this dispute is gambling and betting services 
supplied by non-remote means.   
6.498  In this dispute, and for the reasons discussed he reafter, the Panel considers that some of the 
concerns the United States has identified are speci fic only to the remote supply of gambling and 
betting services.  Therefore, it would be inappropriate to attempt to compare that treatment of these specific concerns with the treatment of whatever concerns the United States has with the non-remote 
supply of these services.  We examine below each concern invoked by the United States. 
6.499  With respect to money laundering , the United States argues that the volume, speed and 
international reach of remote gambling transactions  combined with the offshore locations of most 
remote suppliers and the virtual anonymity of such transactions mean that the "layering and 
integration" stages of money laundering are effec tively facilitated.  More particularly, the United 
States submits that the remote supply of gambling a nd betting services is particularly well-suited to 
concealing and disguising the true nature, sour ce and ownership of the ill-gotten gains of crime.941 
6.500  The United States General Accounting Offi ce Report to Congressional Requestors entitled 
"Internet Gambling: An Overview of the Issues" refers to these concerns.942   
6.501  In addition, we have before us a 2001 Repor t on Money Laundering Typologies prepared by 
the Financial Action Task Force on Money Laundering.  That report tends to confirm the existence of 
the concerns identified by the United States in th e context of the remote supply of gambling and 
betting services that relate to the audit trail of remo te transactions.  In particular, the report states: 
"Despite attempts to deal with the poten tial problems of Internet gambling by 
regulating it, requiring licences in order to operate, or banning such services outright, 
a number of concerns remain in addition to  the inability to track ... Internet links ... 
                                                      
939 United States' second written submission, para. 93. 
940 The Appellate Body in Korea – Various Measures on Beef  at para. 165 referred to the GATT panel 
US – Section 337  which stated: "It was clear to the Panel that  a contracting party cannot justify a measure 
inconsistent with another GATT provision as "necessary" in terms of Article XX(d) if an alternative measure 
which it could reasonably be expected to employ and whic h is not inconsistent with other GATT provisions is 
available to it.  By the same token, in cases where a measure consistent with other GATT provisions is not reasonably available, a contracting party is bound to us e, among the measures reasonably available to it, that 
which entails the least degree of inconsistenc y with other GATT provision": Panel Report on US – Section 337 ,  
para. 5.26.   
941 United States' first written submission, paras. 12 et seq ; United States' second oral statement, 
paras. 59-60. 
942 Exhibit AB-17, p. 35. WT/DS285/R 
Page 246  
 
For example, transactions are primarily performed through credit cards, and the 
offshore placement of many Internet ga mbling sites makes locating and prosecuting 
the relevant parties more difficult if not impossible.  Furthermore, gambling transactions, the records of which might be needed as evidence, are conducted at the 
gambling site and are software-based; this may add to the difficulty of collecting and 
presenting such evidence."
943 
6.502  Along similar lines, in 2002, the Deputy Assistant Attorney General made the following 
statement in a special briefing on "Money Launde ring and Payment Systems in Online Gambling": 
"The anonymous nature of the Internet and the use of encryption makes it difficult to 
trace the transactions.  The gambling business may also not maintain the transaction 
records, in which case tracing may be impossible.  While regulators in the United 
States can visit physical casinos, observe their operations, and examine their books and records to ensure compliance with regulations, this is far more difficult, if not impossible, with virtual casinos."
944 
6.503  Similar statements have been made during a 2003 Hearing before the Subcommittee on 
Crime, Terrorism, and Homeland Security of the Co mmittee on the Judiciary on the Unlawful Internet 
Gambling Funding Prohibition Act and the Internet  Gambling Licensing and Regulation Commission 
Act.945  The concern expressed by the United States regarding the anonymity of transactions is also 
reflected in several of the recommendations made in the 2001 Report on Money Laundering Typologies that are aimed at addressing the speci fic difficulties associated with remote gambling 
transactions.  In particular, the report recommends that Internet Service Providers be required to 
maintain reliable subscriber registers wi th appropriate identification information.
946   
6.504  The concern expressed by the United States rega rding the international reach of remote 
supply gambling and betting transactions appears to be  confirmed in an example referred to in the 
2001 Report on Money Laundering Typologies where mone y flows were detected in many parts of 
the world.947   
6.505  Antigua has not pointed to any evidence that calls  into question the specific concerns referred 
to above.  Rather, Antigua points to evidence indicati ng that money laundering is at least as grave a 
concern in relation to the supply of non-remote gambling and betting services as in the case of the remote supply of such services.
948  The United States does not dispute that casino gambling can be 
used, among other things, to launder the cash proceeds of crime during the placement stage of money laundering.
949  In any event, it is our view that, the fact  that money laundering may exist in the context 
of the non-remote supply of gambling and betting services does not mean that the United States is not 
entitled to address differently the aspects of this c oncern that are specific to the remote supply of 
gambling and betting services, namely, the volume, speed and international reach of remote gambling transactions combined with the offshore locations of  most remote suppliers and the virtual anonymity 
of such transactions.   
                                                      
943 Exhibit US-7, p. 6. 
944 Exhibit AB-86, p. 4.  A similar statement was made by the same Deputy Assistant Attorney General 
before the Subcommittee on Crime, Terrorism, and Homeland Security: Exhibit AB-85, p. 3. 
945 See Exhibit US-5. 
946 Exhibit US-7, p. 8. 
947 Exhibit US-7, Example 1, pp. 6-7. 
948 See, for example, Exhibit AB-79; Exhibit AB-147;  Exhibit AB-149; Exhibit AB-150; 
Exhibit AB-154. 
949 United States' first written submission, paras. 12 et seq ; United States' second oral statement, 
paras. 59-60.  WT/DS285/R 
 Page 247 
 
 
6.506  With respect to fraud , the United States submits that the risk of fraud is heightened in the case 
of the remote supply as compared to the non-remo te supply of gambling and betting services because 
the barriers to establishing an online gambling opera tion are low so that unscrupulous operators can 
appear and disappear within minutes.950   
6.507  We have seen evidence that tends to support th e United States' concern that low barriers to 
entry in the context of the remote supply of gambling and betting services heightens the risk of fraud.  
Indeed, in 2002, the Deputy Assistant Attorney Ge neral made the following statement in a special 
briefing on "Money Laundering and Payment Systems in Online Gambling": 
"Although there are certainly legitimate companies who are either operating or who 
want to operate on-line casinos in an honest manner, the potential for fraud connected 
with casinos and bookmaking operations in the virtual world is far greater than in the 
physical realm. Start-up costs are relatively low and cheap servers and unsophisticated software are readily-ava ilable.  On-line casinos and bookmaking 
establishments operate in many countr ies where effective regulation and law 
enforcement is minimal or non-existent.  Like scam telemarketing operations, on-line 
gambling establishments appear and disappear with regularity, collecting from losers 
and not paying winners, and with little fear  of being apprehended and prosecuted."
951 
6.508  Similar statements are contained in the National Gambling Impact Study Commission Final 
Report.952 
6.509  Antigua has pointed to evidence indicating that the non-remote supply of gambling and 
betting services may be as susceptible to fraud as is the remote supply of these services.953  However, 
we do not consider that this evidence refutes the existence of the specific fraud concerns that the 
United States maintains exist in the context of the remote supply of gamb ling and betting services, 
namely that because the barriers to establishing an online gambling operation are low, unscrupulous 
operators can appear and disappear within minutes. 
6.510  The essence of the United States' health concerns  in relation to the remote supply of gambling 
and betting services relate to the isolated environm ent in which gamblers may operate, which protects 
them from social stigma and enables them to ga mble without interruption for extended periods of 
time. 954   
6.511  The evidence tends to support the existence of  the United States' concerns regarding the 
isolated environment of consumers of remotely su pplied gambling and betting services.  In particular, 
in 2003, the Deputy Assistant Attorney General stat ed before the Subcommitt ee on Crime, Terrorism, 
and Homeland Security that: 
"Unlike on-site gambling, on-line gambling is readily available to anyone with an 
Internet connection at all hours of the day or  night.  This present a particular danger 
for compulsive gamblers.  As was recently pointed out by the American Psychiatric Society: "Internet gambling, unlike many other forms of gambling activity, is a 
solitary activity, which makes it even  more dangerous; people can gamble 
uninterrupted and undetected for unlimited periods of time."  Indeed, the problems associated with pathological and problem gamblers, a frighteningly-large percentage 
                                                      
950 United States' second written submission, para. 51. 
951 Exhibit AB-86, p. 2.  
952 Exhibit AB-10, p. 5-11.  See also Exhibit AB-159, p. 2. 
953 See Exhibit AB-156, which is a document prepared by Antigua entitled "Fraud within the United 
States gambling industry". 
954 United States' second oral statement, para. 30. WT/DS285/R 
Page 248  
 
of which are young people, are well-establishe d and can be measured in the ruined 
lives of both the gamblers themselves and their families."
955 
6.512  Similar statements are contained in the National Gambling Impact Study Commission Final 
Report.956 
6.513  The concern regarding the relative anonymity associated with remote gambling, which 
protects consumers from social stigma, is acknowle dged in a statement made by two professors from 
the International Gaming Research Unit, Division of Psychology, in Nottingham Trent University, 
United Kingdom entitled "Is Internet gambling more a ddictive and/or problematic than other forms of 
gambling?", which is relied upon by Antigua.  In pa rticular, it states that "Another concern that has 
been noted concerns the relative anonymity of Inte rnet gambling, which may lead to disinhibition and 
increased levels of gambling."957  The authors of the statement conclude, inter alia , that: 
"There are a number of factors that ma ke online activities lik e Internet gambling 
potentially seductive and/or addictive.  Su ch factors include anonymity, convenience, 
escape, dissociation/immersion, accessib ility, event frequency,  interactivity, 
disinhibition, simulation, and asociability."958 
6.514  Antigua has argued that there is no evidence that cross-border gambling results in higher 
levels of pathologies than non-remote gambling.959  However, in our view, the United States is not 
submitting that remote gambling may result in a higher  incidence of pathological gambling.  Rather, 
the United States argues that remote ga mbling presents "special health risks"960 associated with the 
isolated and anonymous environment in which such  gambling takes place.  We do not consider that 
Antigua's evidence disproves the exis tence of this specific concern. 
6.515  With respect to underage gambling , the United States argues that there is no means to prevent 
minors from gaining access to remotely supplied gambling and betting services comparable to the 
means available in connection with the non-re mote supply of gambling services in the United 
States.961 
6.516  The evidence tends to support the United States ' assertion that age verification is a specific 
concern with respect to the remote supply of gambli ng and betting services.  In particular, in 2003, the 
                                                      
955 Exhibit AB-85, p. 2. 
956 Exhibit AB-10, p. 5-5.  See also Exhibit AB-159, p. 2. 
957 Exhibit AB-80, p. 8.  The statement refers to a 2003 paper written by one of the co-authors of the 
statement that suggests that remote gamblers are, perhaps, not as anonym ous as they would think because of, 
inter alia , the existence of the ability of Internet gambling operators to collect data about gamblers.  However, 
nowhere does the statement point to ev idence to suggest that gamblers are aware that their anonymity is being 
compromised by this facility. 
958 Exhibit AB-80, p. 12. 
959 In this regard, Antigua refers to a statement prepared by two of its consultants for this dispute, 
namely Professor Mark Griffiths and Dr Richard Wood , entitled "Is Internet gambling more addictive and/or 
problematic than other forms of gambling?" contained in Exhibit AB-80.  The statement concludes that "there is no greater risk of a pathological response as a result of  exposure to Internet-based gambling opportunities, than 
as a result of exposure to other forms of gambling opportunity": Exhibit AB-80, p. 2.  Antigua also relies upon a 
statement by another of its consultants in this dispute, namely, Dr Howard Shaffer, who concludes that "health 
risks associated with Internet base d gambling are not meaningfully different from other electronic gambling": 
Exhibit AB-185, p. 8.   
960 In para. 30 of its first oral statement, the United States submits that: "Remote gambling also presents 
special health and youth protection risks  in part because it is available to anyone, anywhere – including 
compulsive gamblers and children – who can gamble 24 hours a day with a mere 'click of the mouse'.  Isolation and anonymity compound the danger.  In the words of a gambling addict interviewed on the videotape we have 
provided, 'nobody has to see you do it' and 'nobody has to know.'" 
961 United States' first written submission, para. 99.  WT/DS285/R 
 Page 249 
 
 
Deputy Assistant Attorney General stated befo re the Subcommittee on Crime, Terrorism, and 
Homeland Security that: 
"On-line gambling also makes it far more difficult to prevent minors from gambling.  
Unlike traditional physical casinos and Off-T rack-Betting parlors, the operators of 
gambling websites cannot look at their cu stomers to assess their age and request 
photo identification. Currently, Internet gambling businesses have no reliable way of 
confirming that gamblers on their website are not minors who have gained access to a credit card.  Although some companies are developing software to try to detect 
whether a player is old enough to gamble or whether that player is from a legal 
jurisdiction, such software has not been perfected and would, of course, be subject to 
the same types of flaws and vulnerabilities that could be exploited by hackers."
962 
6.517  Similar statements were made during a 2003 Hearing before the Subcommittee on Crime, 
Terrorism, and Homeland Security of the Judici ary Committee on the Unlawful Internet Gambling 
Funding Prohibition Act and the Internet Ga mbling Licensing and Regulation Commission Act963 and 
are contained in the National Gambling Impact Study Commission Final Report.964 
6.518  The evidence indicates that credit card gatewa ys are the primary means of verifying age 
online.965  However, despite suggestions to the contrary by Antigua966, the evidence suggests that 
credit cards have proved to be an inadequate means to restrict children's access to Internet gambling 
and betting web sites.  In particular, in his test imony before the Commission on Online Protection in 
2000, the Senior Vice President for Public Policy of Visa USA stated: 
"The Child Online Protection Act ... is desi gned to prevent a person who is a minor 
from accessing materials that are 'harmful to  minors' over the Internet.  Under the 
Act, a defendant can assert an affirmat ive defense to prosecution under the Act by 
showing that the defendant has made a good fa ith effort to restrict access by persons 
under the age of 17 to obscene materials on th e defendant's Internet site.  One way for 
the defendant to assert this affirmative defen se is to show that the defendant required 
use of a credit card or a debit card to access the Internet site.  In providing so, the Act 
basically assumes that only adults have access to a credit card or debit card. 
To the contrary, it is important for the Commission to understand that this assumption 
simply is not correct. Access to a credit card or a debit card is not a good proxy for 
                                                      
962 Exhibit AB-85, p. 2.  See also Exhibit AB-17, pp. 17 et seq , Exhibit AB-164 and Exhibit US-18. 
963 See Exhibit US-5, p. 1. 
964 Exhibit AB-10, p. 5-4. 
965 See, for example, the Article entitled "Why Online Age Checks Don't Work" contained in Exhibit 
US-28.  The Article states that "The credit card gateway as age verification standard has been in place ever since 
the late 1990's."  Antigua submits as much when it states that the US Congress has legi slated to provide that the 
use of credit cards is an effective way to keep children from engaging in potentially harmful behaviour on the Internet: Antigua's second oral statement, para. 59. 
966 See Exhibit AB-158, which is a document prepared by Antigua entitled "Youth Gambling".  This 
document states, inter alia , that "United States legislation recognizes that the use of credit cards is an effective 
means to prevent underage access".  We also note that Antigua has submitted evidence in Exhibits AB-163, 
AB-165 and AB-166 to suggest that underage gambling and betting occurs when the relevant services are supplied through non-remote means in the United States.  However, in our view, this does not indicate that the 
United States' concerns with respect to the remote supply of gambling and betting services do not exist.  Antigua 
has also submitted evidence in Exhibits AB-167, AB-168, AB-169, AB-170 and AB-171 that "younger people" are the target of marketing strategies of non-remote su ppliers of gambling and betting services.  However, there 
is no indication that the reference to "younger people" in the exhibited documents means "minors" or "underage 
gamblers".  Therefore, we will disregard this evidence. WT/DS285/R 
Page 250  
 
age. The mere fact that a person uses a credit card or a debit card in connection with a transaction does not mean that this person is an adult. 
Many individuals under the age of 17 have legitimate access to, and regular use of, 
credit cards and debit cards. For example, parents may designate their child as an 
'authorized user' of the parent's credit car d or debit card.  This actually is quite 
common, particularly for credit cards.  Wh enever this occurs, the child will have 
access to the parent's credit card number or debit card number and can use that card number to access materials deemed "harmful to minors" on the Internet. 
In addition, many children under the ag e of 17 have their own deposit accounts and 
may have access to a debit car d that accesses such account. 
... 
Thus, although the [Child Online Protectio n] Act assumes that only adults have 
access to a credit card or a debit card, it is important for the Commission to understand that this assumption is simply not true.  As a result, the Commission may want to focus its attention on more suitable methods of verifying age."
967  
6.519  In relation to organized crime , in essence, the United States argues that the remote supply of 
gambling and betting services is cause for graver co ncern than is the case for the non-remote supply 
of such services because of the amount of money and manipulability inherent in Internet gambling; the opportunity to use gambling by remote m eans of supply as a clearinghouse through which 
organized crime bookmakers in the United States can "lay off" their bets; and the opportunity for organized criminals to more easily hide their invo lvement in gambling and evade law enforcement by 
operating beyond the intense scrutiny of regulators a nd law enforcement officials in the gambler's 
jurisdiction.
968   
6.520  The evidence we would have expected to see in  proving the existence of the particular 
organized crime concerns referred to by the Unite d States would have been evidence demonstrating, 
inter alia , that the "inherent manipulability" of the Internet makes it more attractive to participants in 
organized crime and that organized criminals find it easier to hide their bets, thereby evading the 
scrutiny of law-enforcement officers.  We have not seen  any concrete evidence of this nature.  Rather, 
the United States has pointed us to instances of organized crime involvement and prosecution in connection with the remote supply of gambling and betting services.
969  The non-remote supply of 
gambling and betting services is permitted in much of the United States, although it also gives rise to concerns in respect of organized crime.
970  In the absence of evidence demonstrating the nature and 
extent of the risks of organized crime presented by remote gambling and betting, we are not fully 
satisfied that the United States has demonstrated th at it could not guard against those risks through 
means that are WTO-consistent.  
6.521  To sum up, the United States has certain concer ns with respect to money laundering, fraud, 
health and underage gambling that, in our view, are specific  to the remote supply of gambling and 
betting services.  Therefore, the measures used by  the United States to address its concerns with 
                                                      
967 Exhibit US-27, pp. 2-4.  In addition, the Un ited States General Accounting Office Report to 
Congressional Requestors entitled " Internet Gambling: An Overview of the Issues" indicates that efforts aimed 
at restricting the use of credit cards fo r Internet gambling have been hampered, inter alia , by Internet gambling 
sites that attempt to disguise their transactions to avoid them being blocked by banks: Exhibit AB-17, p. 4.  See 
also Exhibit AB-159, p. 2. 
968 United States' second written submission, paras. 46 et seq . 
969 See, for example, Exhibit US-3; Exhibit US-4; Exhibit US-5; Exhibit US-6; Exhibit US-14; 
Exhibit US-22; Exhibit US-23. 
970 See, for example, Exhibit AB-145.  WT/DS285/R 
 Page 251 
 
 
respect to money laundering, fraud, health and unde rage gambling in the context of the non-remote 
supply of gambling and betting services cannot be compared and examined as WTO-consistent 
alternatives that the United States could have used to address the specific concerns it has with regard 
to the remote supply of gambling and betting services. 
6.522  In our consideration of whether the United States has explored and exhausted reasonably 
available WTO-consistent alternatives, we note, importantly, that Antigua has asserted that it has in 
place a regulatory regime that is sufficient to  address the specific concern s identified by the United 
States  with respect to the remote supply of gambling and betting services.  These include measures 
aimed at countering money laundering that meet international standards971, requirements for identity 
verification, fraud prevention and gambling addiction972, and that under-age gambling is expressly 
prohibited by Antiguan law973.   
6.523  Antigua further submits that it has offered to c onsult with the United States with a view to 
meeting any specific concerns that may remain , notwithstanding the Antiguan regulatory regime .  
Antigua claims that the United Stat es has refused to engage in such consultations.  Antigua also points 
to lack of collaboration and consultation effo rts by the United States through a Mutual Legal 
Assistance Treaty that exists between the two countri es to address concerns of the type raised by the 
United States.  Antigua submits that during consultati ons with the United States in the context of this 
dispute, Antigua again expressed its willingness to co operate with the United States to find a mutually 
agreeable regulatory scheme.  However, according to Antigua, the United States has on all occasions 
refused to engage in consultation or cooperation.  Antigua claims that the United States' refusal to 
engage in consultations with Antigua is  contrary to Article XIV of the GATS.974   
                                                      
971 Antigua's first written submission, paras. 34, 35, 43 and 45 et seq .  See also Exhibit AB-5.  
972 Antigua's first written submission, para. 43.  In  particular Antigua refers to a CFATF Report 
(contained in Exhibit AB-8) which states that "the government of Antigua and Barbuda has shown a clear 
commitment to a regulatory anti-money laundering regime th at meets international standards" and that "Antigua 
and Barbuda's new institutional anti money laundering fram ework is adequate and compliant with international 
standards and is being enforced."  Antigua adds that in  practice as well as by requirement of Antiguan law,  
winnings and the balance of deposits are transmitted b ack to the account from which the initial deposit came or, 
if the deposit was by credit card, someti mes by credit back to the same cred it card.  In some cases, amounts are 
paid to players by cheque. In addition to satisfying Antig ua's regulatory requirements for identity verification, 
anti-fraud prevention motivates operat ors to ensure identification, a number of operators use commercially 
available databases where large amounts of information on persons can be found, including dates of birth and 
employment, criminal record s, credit history and residential addresse s.  Antigua submits that each Antiguan 
operator maintains an "anti-fraud" department with the objective of preventing abuses of the gaming systems, collusion among players, financial fraud and credit card abuse, under-age playing and other occurrences which 
can result in financial losses to the operator.  See also Exhibit AB-6. 
973 Antigua's first written submission, paras. 45 et seq .  In particular Antigua submits that under-age 
gambling is expressly prohibited by Antiguan law.   According to Antigua, experience has shown that under-age 
gambling with Antiguan operators is relatively rare for several reasons.  The first obstacle to gambling and 
betting by minors is the age verification that forms a part of the identification process.  A second material obstacle is the need to f und an account before any wagering can co mmence, which requires access to financial 
instruments such as cheques and a funded bank account, the ability to send funds by wire transfer from a funded 
bank account or access to a valid credit card.  Also, in practice, many Antiguan oper ators provide direct links 
from their web sites to parental control providers such as "Cybersitter".  Antigua submits that it is a requirement 
of Antiguan law that operators display on their sites a warning of the addiction possibilities of gambling and information to assist compulsive gamblers .  Moreover, most operators appear to be able to detect patterns of 
problem gamblers either at the sign-up stage (where the operators refuse to authorize funding of or playing on 
an account) or later on during the cour se of the relationship with the player , in which event th e person's account 
will often be closed and the balance returned to the player.  See also Exhibit AB-6. 
974 Antigua's first oral statement, para. 4; Antigua 's second oral statemen t, para. 81; Antigua's 
comments on the United States' reply to Panel question No. 43. WT/DS285/R 
Page 252  
 
6.524  The United States submits that it has had significant interactions with Antigua on law 
enforcement issues.  The United States also subm its that it has made clear that it would welcome 
Antigua's continued assistance in the investigati on and prosecution of mone y launderers and others 
who violate US law.  The United States asserts that  it was not aware of any effort by the government 
of Antigua to pursue such cooperation but, in any ev ent, Antigua's position in this dispute has made it 
clear that Antigua is unwilling to recognize the existence of specific US regulatory concerns 
surrounding remote supply of gambling.
975  The United States adds that, while it is not true that the 
United States has "refused" to pursue international requests for assistance as suggested by Antigua, 
there is a basis for its reluctance to do so since th is case involves Internet gamblers.  For example, the 
United States points to the fact that Antigua publicly took a position contrary to the United States in 
the prosecution of an Antigua-based remote supplie r of gambling and betting services, Jay Cohen, by 
filing an amicus brief in support of Mr. Cohen in the US Supreme Court.  In addition, the United 
States is troubled by the fact that a convicted fel on, William Scott, was license d as an Internet supplier 
of gambling and betting services in Antigua.  Acco rding to the United States, these matters suggest 
that requests for assistance would not be fruitful.976   
6.525  Antigua also claims that the United States' failure to respond to Antigua's invitation to 
engage in international cooperation as to how to deal with the specific concerns  the United States has 
with the remote supply of gambling and betting servi ces is inconsistent with the United States' WTO 
obligations.977  Antigua submits that international regula tory cooperation in the gambling sector is 
possible and is already taking place.978  The United States responds that, as a legal matter, nothing in 
the text of the GATS requires such action.  Furt her, as a factual matter, the absence of any US 
domestic regulatory regime that permits the remote supply of gambling services makes it 
unreasonable for Antigua to expect the United States to seek negotiations to permit such a regime for 
its cross-border suppliers.979   
6.526  We recall that Members are obliged to consider all reasonably available WTO-consistent 
alternatives before imposing a WTO-inconsistent me asure (which may be justified by the relevant 
WTO exceptions provisions).  In this regard, the Panel notes the following statements made by the 
panel in US – Tuna (Mexico)  in its un-adopted report: "The United States had not demonstrated to the 
Panel – as required of the party invoking an Articl e XX exception – that it had exhausted all options 
reasonably available to it to pursue its dolphin pr otection objectives through m easures consistent with 
the General Agreement, in particular through the ne gotiation of international cooperative arrangements, 
which would seem to be desirable in view of the fact that dolphins ro am the waters of many states and 
the high seas."980  We understand that the Appellate Body has recognized that there may be situations 
where unilateral measures are justified under Article XX of the GATT.981  On the other hand, we note 
that the Appellate Body has also insisted that "'as far as possible', a multilateral approach is strongly 
"preferred".982  
                                                      
975 United States' reply to Panel question No. 43. 
976 United States' reply to Panel question No. 43; United States' closing statement at the Panel's second 
substantive meeting with the parties, para. 9. 
977 Antigua's second oral statement, paras. 81-82. 
978 Antigua's second oral statement, para. 82.   
979 United States' second written submission, para. 120. 
980 Panel Report on US – Tuna (Mexico) , para. 5.28.  With regard to the legal value of an unadopted 
GATT panel report, we recall that the Appellate Body in Japan – Taxes on Alcoholic Beverages  stated at 
page 15: "[W]e agree that a panel could nevertheless find useful guidance in the reasoning of an unadopted 
panel report that it considered to be relevant". 
981 Appellate Body Report on US – Shrimp  (Article 21.5 – Malaysia ), para. 124. 
982 The Appellate Body in US – Shrimp  (Article 21.5 – Malaysia ), at para. 124 of its Report added that: 
"[I]t is one thing to  prefer a multilateral approach in th e application of a measure that  is provisionally justified 
under one of the subparagraphs of Article XX of the GA TT 1994;  it is another to require the conclusion of a  WT/DS285/R 
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6.527  During the course of these Panel proceedings, we  have concluded that the United States has 
made a full market access commitment in its  Schedule for gambling and betting services for 
mode 1.983  The principle of effective treaty interpretati on requires that meaning and effect be given to 
this commitment, regardless of the motivation behind  that commitment (even if the commitment may 
have been undertaken inadvertently).  In our view , a full commitment in respect of market access in a 
Member's schedule for a particular mode of supply creates legitimate trade expectations and, thus, 
obligations with respect to the committed sector. 
6.528  Article XIV allows Members to derogate fro m their obligations under GATS (including any 
specific commitments they may have undertaken) subject  to the conditions stipulated in that Article.  
Under Article XIV(a), the challenged measures must be "necessary" to protect public morals and/or 
public order.  Based on Appellate B ody decisions, we believe that a key element of the application of 
the "necessity" test of Article XIV in this disput e is whether the United States has explored and 
exhausted reasonably available WT O-consistent alternatives to the US prohibition on the remote 
supply of gambling and betting services that woul d ensure the same level of protection. 
6.529  In our view, it is in the context of assessing whether or not reasonably available WTO-
consistent alternatives exist and ha ve been explored by the United States that Antigua's invitation to 
the United States to engage in cons ultations and/or negotiations on the particular concerns associated 
with the remote supply of gambling and betting servi ces identified by the United States is relevant.  
Through bilateral and multilateral consultations and negotiations, Memb ers may be able to determine 
whether their concerns can be adequate ly addressed in a WTO-consistent manner.984  In this case, we 
note that a Mutual Legal Assistance Treaty exists between Antigua and the United States, that could 
be the framework within which such consultations could take place.  
6.530  We do not overlook the possibility that, given the circumstances surrounding this case, the 
United States may have been convinced that its sp ecific concerns could not have been adequately 
addressed through such consultations  and/or negotiations.  Indeed, with respect to the possibility of 
participating in international cons ultations and negotiations in this case, the United States suggested 
that consultations would not have been "fruitful".985   
6.531  Even if the United States is of the view that no such alternative curre ntly exists, the United 
States cannot prejudge that the situatio n will remain unchanged in the future.986  The United States' 
obligation to consult with Anti gua before and while imposing its  prohibition on the cross-border 
                                                                                                                                                                     
multilateral agreement as a condition of avoiding 'arbitrar y or unjustifiable discrimination' under the chapeau of 
Article XX.  We see, in this case, no such requirement." 
983 We recall that Article XVI:4 of the WTO Agreemen t provides that "Each Me mber shall ensure the 
conformity of its laws, regulations and administrative proc edures with its obligations as provided in the annexed 
Agreement." 
984 The Panel recalls in this regard that Article 4.2 of the DSU states that: "Each Member undertakes to 
accord sympathetic consider ation to and afford adeq uate opportunity for consultation regarding any 
representation made by any Member concerning measures affecting the operation of any covered agreement 
taken within the territory of the former." 
985 In particular, the United States submitted that: "While it is not true that the United States has 
'refused' to pursue international requests  for assistance as suggested ... there is  a basis for a reluctance to do so if 
the case involves Internet gamblers.  For example, Antigua publically took a position contrary to the United 
States in the prosecution of Jay Cohen by filing an amicus brief in support of Mr. Cohen in the US Supreme 
Court.  In addition, its licensing of  William Scott, a convicted felon, is troubling.  These matters suggest that 
requests for assistance would not be fruitful if the investigation involves or is related to an Internet gambler" : United States' closing remarks for the se cond oral statement, para. 9.   
986 In this regard, we note that a number of jurisdictions in the world have legalized Internet gambling.  
See, for example, Exhibit AB-2, p. 3; Exhibit AB-10, p. 5-10; Exhibit AB-17, p. 3 and 18 et seq , Exhibit AB-36, 
pp. 13 et seq  and 42 et seq .  We also note that suggestions have been made in US literature as to how the 
concerns that have been raised in the United States regarding the remote supply of gambling and betting services 
may be addressed: Exhibit AB-159, pp. 6–7 and Exhibit AB-160, p. 9. WT/DS285/R 
Page 254  
 
supply of gambling and betting services derives from the fact that it has undertaken a specific market 
access commitment for mode 1.  More specifically, it is because of the existence of this specific 
market access commitment with respect to cross-border trade of gambling and betting services that the United States remains obliged to  consider WTO-consistent altern atives, including those that may 
be suggested by Antigua and other Members, befo re and while maintaining its prohibition on the 
cross-border supply of gambling and betting services.  In rejecting Antigua's invitation to engage in 
bilateral or multilateral consultati ons and/or negotiations, the Unite d States failed to pursue in good 
faith a course of action that could have been used by it to explore the possibility of finding a reasonably available WTO- consistent alternative.
987  
"Weighing and Balancing" 
6.532  Having identified and evaluated each of the el ements that we must assess in determining 
whether the Wire Act, the Travel Act (when read toge ther with the relevant state laws) and the Illegal 
Gambling Business Act (when read together with the relevant state laws) are "necessary" to protect public morals and/or to maintain public order, we  must now "weigh and balance" those elements.   
6.533  As stated above, we conclude that the interests protected by the Wire Act, the Travel Act 
(when read together with the relevant state laws ) and the Illegal Gambling Business Act (when read 
together with the relevant state laws) protect very important societal interests in the United States.  
We also conclude that the Wire Act, the Travel Ac t (when read together with the relevant state laws) 
and the Illegal Gambling Business Act (when read toge ther with the relevant state laws) contribute to 
the realization of the ends pursued by those laws in the United States.  On the other hand, as stated 
above in paragraph 6.495, we also find that the measures in question have a significant impact on 
trade.  In this regard, we find that, while the Un ited States has legitimate specific concerns with 
respect to money laundering, fraud, health and unde rage gambling that are specific to the remote 
supply of gambling and betting services, which suggests that the measures in question are "necessary" within the meaning of Article XIV(a), the United Stat es has declined Antigua's invitation to engage in 
bilateral and/or multilateral consulta tions and/or negotiations to dete rmine whether there is a way of 
addressing its concerns in a WTO-consistent manner.   
6.534  We consider that, given the circumstance of th is case and for the reasons explained above in 
paragraphs 6.526-6.530, th e United States, before imposing a WT O inconsistent measure, was obliged 
to explore these options in a good faith manner with a view to exhausting WTO-consistent 
alternatives, even if it considered that the measures in question were "indispensable".   
Overall conclusion on whether the Wire Act,  the Travel Act and the Illegal Gambling 
Business Act are provisionally justified under Article XIV(a)  
6.535  In sum, we conclude that, for the reasons expl ained above, the United States has not been able 
to provisionally justify, under Article XIV(a) of the GATS, that the Wire Act, the Travel Act (when 
read together with the relevant state laws)988 and the Illegal Gambling Business Act (when read 
                                                      
987 We note that the United States has submitted that "the absence of any US domestic regulatory 
regime that permits the remote supply of gambling services makes it unreasonable for Antigua to expect the 
United States to engage in international negotiations toward the establishment of such a regime for its cross-
border suppliers":  United States' reply to Panel question No. 43.  Further as noted above in paragraph 6.524, the 
United States submitted that "while it is not true that the United States has 'refused' to pursue international 
requests for assistance [in the investigation and prosecution of money launderers and others who violate US 
law] ... there is a basis for a reluctance to do so if the cas e involves Internet gamblers. ...  These matters suggest 
that requests for assistance would not be fruitful if the investigation involves or is related to an Internet gambler":  United States' closing statement at the Panel's second substantive meeting with the parties, para. 9. 
988 We recall that the "relevant state laws" for the purposes of the Travel  Act are state laws that prohibit 
a "business enterprise involving gambling".  Such state laws would include but are not limited to § 14:90.3 of  WT/DS285/R 
 Page 255 
 
 
together with the relevant state laws)989 are necessary to protect public morals and/or public order 
within the meaning of Article XIV(a).  We, noneth eless, acknowledge that such laws are designed so 
as to protect public morals or maintain public order. 
(d) Provisional justification under Article XIV(c)  
(i) The legal standard under Article XIV(c) 
6.536  Pursuant to the text of Article XIV(c), in  determining whether a challenged measure is 
provisionally justified under that Article, three elem ents must be demonstrated by the Member who 
invokes Article XIV(c), namely: 
(a) the measure for which justification is claimed must "secure compliance" with other 
laws or regulations; 
(b) those other "laws or regulations" must not be inconsistent with the WTO Agreement; 
and 
(c) the measure for which justification is claimed must be "necessary" to secure 
compliance with those other laws or regulations. 990 
6.537  We note that, textually, Article XIV(c) is very  similar to Article XX(d) of the GATT 1994.  
Accordingly, on the basis of the comments made by  the Appellate Body to which we have referred 
above regarding the applicability of ju risprudence under the GATT 1994 to the GATS991, we will 
refer to and rely upon such jurisprudence to the exte nt to which it is applicable and relevant in our 
interpretation of Article XIV(c). 
Measures to "secure compliance" with laws or regulations 
6.538  With respect to the first element, the Pane l notes that, in determining whether a measure 
"secures compliance" with laws and regulations, the GATT panel in EEC –  Parts and Components  
found that such phrase in Article XX(d) of the GATT 1994 is meant "to enforce obligations under 
laws and regulations" rather than "to ensure th e attainment of the objectives of the laws and 
regulations".992  We consider such a finding useful in th e context of Article XIV(c) of the GATS in 
two respects.  First, it indicates that the referenc e to "secure compliance" in Article XIV means that 
the measures for which justification is sought must  "enforce" the relevant laws and regulations.  
Second, it indicates that the measures for which jus tification is sought must enforce "obligations" 
                                                                                                                                                                     
the Louisiana Rev. Stat. Ann., § 17A of chapter 271 of Massachusetts Ann. Laws, § 22-25A-8 of the South 
Dakota Codified Laws, and § 76-10-1102(b) of the Utah Code. 
989 We recall that the "relevant state laws" for the purposes of the Illegal Gambling Business Act are 
state laws that prohibit a "gambling business ".  Such state laws would include but are not limited to § 14:90.3 of 
the Louisiana Rev. Stat. Ann., § 17A of chapter 271 of Massachusetts Ann. Laws, § 22-25A-8 of the South 
Dakota Codified Laws, and § 76-10-1102(b) of the Utah Code. 
990 We recall that the Appellate Body in Korea –Various Measures on Beef  framed the analysis under 
Article XX(d) of the GATT 1994 in terms of two require ments.  Specifically, the Appellate Body stated that:  
"For a measure, otherwise inconsistent with GATT 1994, to be justified provisionally under paragraph (d) of 
Article XX, two elements must be shown.  First, the m easure must be one designed to 'secure compliance' with 
laws or regulations that are not themselves inconsistent with some provision of the GATT 1994.  Second, the measure must be 'necessary' to secure such compliance.  A Member who invokes Article XX(d) as a justification 
has the burden of demonstrating that these two re quirements are met."  Appellate Body Report on Korea – 
Various Measures on Beef , para. 157.  We believe that our findings hereafter, which follow a three stage 
analysis, are compatible with the Appellate Body's guidance in Korea –Various Measures on Beef .  
991 See para. 6.448 above. 
992 Panel Report on EEC – Parts and Components , paras. 5.14-5.18.  WT/DS285/R 
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contained in the laws and regulations rather than merely ensure attainment of the objectives of those 
laws and regulations. 
6.539  As for the degree to which a measure must " secure compliance" with obligations under other 
laws and regulations, we note that the panel in Korea – Various Measures on Beef recognized that a 
measure need not be designed exclusively  to "secure compliance" with th e justifying law.  Rather, the 
panel in that case accepted that it was sufficien t if a measure was put in place, at least in part , in order 
to secure compliance with the justifying legislation.
993 
"Laws or regulations which are not inconsiste nt with the provisions of this Agreement" 
6.540  As for the second element, we note that Article XIV(c) provides a non-exhaustive list of laws 
or regulations "which are not inconsistent with the provisions of this Agreement".  The list refers to 
laws and regulations for the prevention of deceptiv e and fraudulent practices or to deal with the 
effects of a default on services contracts;  the protecti on of the privacy of indivi duals in relation to the 
processing and dissemination of personal data; and the protection of confidentiality of individual 
records and accounts; and safety.  Accordingly, laws and regulations other than those that fall within 
the list may be relied upon in justifying a GATS-in consistent measure under Article XIV(c) provided 
that those other laws and regulations are WTO-consistent.   
Measure "necessary" to secure compliance with laws or regulations 
6.541  With respect to the third element, the Pane l recalls the "weighing and balancing" test  
articulated by the Appellate Body in Korea – Various Measures on Beef  as the basis for making a 
determination as to whether a measure is "necessar y" within the meaning of Article XX(d) of the 
GATT 1994.   
6.542  On the basis of the articulation of the "weighing and balancing" test by the Appellate Body in 
Korea – Various Measures on Beef  and, subsequently, in EC – Asbestos994, we believe that, in the 
context of Article XIV(c), we must assess: 
(a) the importance of interests or values that th e laws or regulations to be enforced are 
intended to protect.  
(b) the extent to which the enforcement measure  contributes to the realization of the end 
pursued, that is, to the securing of compliance with the laws or regulations to be enforced. 
(c) the trade impact of the enforcement measure.   
(ii) Applying the legal standard under Article XIV(c) to the facts of this case 
What are the "laws and regulations" relied upon by the United States? 
6.543  As noted above, the measure for which justifi cation is claimed must secure compliance with 
"other laws or regulations". The United States su bmits that the US Congress designed the Wire Act, 
the Travel Act and the Illegal Gambling Business Act in large part to serve as law enforcement tools 
to secure compliance with other WTO-consistent US  laws, namely, state gambling laws and criminal 
laws related to organized crime.995   
                                                      
993 Panel Report on Korea – Various Measures on Beef , para. 658.   
994 Appellate Body Report on Korea – Various Measures on Beef , para. 178;  Appellate Body Report on 
EC – Asbestos , para. 172. 
995 United States' second written submission, paras. 95-106.  WT/DS285/R 
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6.544  With respect to the state gambling laws , the United States argues that the Wire Act, the 
Travel Act and the Illegal Gambling Business Act secu re compliance with state laws that prohibit or 
restrict gambling.996  The United States notes that the substan ce of most of the relevant state laws are 
included in one of Antigua's exhibits.997   
6.545  The United States argues that a Member's laws a nd regulations are presume d to be consistent 
with WTO rules unless proven to be otherwise.  According to the United States, although Antigua 
challenges some of the state laws upon which the United States seeks to rely in its defence under 
Article XIV(c), Antigua has not shown th at any are inconsistent with the GATS.998 Antigua submits 
that, to the extent that US state gambling laws are inconsistent with the GATS, they cannot be 
invoked as the basis for a defence under Article XIV(c).999   
6.546  The Panel recalls that the United States must de monstrate that the Wire Act, the Travel Act 
and the Illegal Gambling Business Act are necessar y to secure compliance with the state gambling 
laws.1000   
6.547  The United States has noted that most of the state gambling laws upon which it relies in 
justifying the Wire Act, the Travel Act and the Illegal Gambling Business Act under Article XIV(c) 
are those challenged by the Antigua in its Panel re quest.  However, the United States has provided us 
with no specific discussion of why and how the various  state laws are WTO-consistent other than to 
say that Antigua has failed to make out a prima facie case with respect to those laws and that, 
therefore, their WTO-consistency can be presumed.1001  In the Panel's view, this assertion is not 
enough to discharge the United States' obligation to demonstrate that it complied with the 
requirements of Article XIV(c) .1002  This failure is particularly significant in light of the fact that we 
have concluded above that, of the state laws upon which the United States  seeks to rely, the state laws 
of Louisiana, Massachusetts, South Dakota and Utah are inconsistent with US commitments in its 
Schedule under Article XVI of the GATS.  Accordi ngly, we conclude that the United States is not 
entitled to rely upon state gambling laws  in its defence under Article XIV(c). 
6.548  In relation to the criminal laws related to organized crime , the United States submits that the 
Wire Act, the Travel Act and the Illegal Gambling Business Act are measures "against organized 
crime".  The United States argues that, as measures ag ainst organized crime, the Wire Act, the Travel 
Act and the Illegal Gambling Business Act secure co mpliance with US laws and regulations that 
define and/or prohibit organized crime, as well as laws and regulations that  prohibit the criminal 
activity that, when committed in certain ways, constitu tes organized crime.  In this regard, the United 
States specifically refers to the Racketeer Infl uenced and Corrupt Organizations statute ("RICO 
                                                      
996 United States' reply to Panel question No. 45. 
997 Namely, in Exhibit AB-99. 
998 United States' reply to Panel question No. 45. 
999 Antigua's second oral statement, para. 70. 
1000 See our discussion in paras. 6.448-6.451 above. 
1001 United States' second written submission, para. 98. 
1002 Despite a question from the Panel requesting the United States to "clearly and specifically identify 
the provisions of laws and regulations with which it says the challenged measures secure compliance under 
Article XIV(c)", the United States merely referred in a f ootnote to the provisions of two state laws by way of 
example.  The footnote did not contain the text of those provisions: United States' reply to Panel question No. 45. Specifically, the United States referred to Utah Code Ann. § 76-10-1102; Hawaii Rev. Statutes 
§§ 712-1221 through 712-1223.  The te xt that accompanied this footnote was:  "State laws restricting gambling 
include the laws by which a number of states prohibit some or all gambling."  We note that, when discussing the relevant state gambling in its second written submission, th e United States did refer the Panel through a footnote 
to Exhibit US-34.  However, that Exhibit does not specifically identify obligations in the relevant state laws.  
Rather, it merely contains examples of state gambling policies for six US states. WT/DS285/R 
Page 258  
 
statute"), the Organized Crime Control Act of 1970 findings that contain a definition of "organized 
crime", and Attorney General Order 1386-89, which also contains a definition of organized crime.
1003 
6.549  With respect to the criminal laws relating to organized crime upon which the United States 
also seeks to rely in making its defence under Ar ticle XIV(c), Antigua has not questioned their WTO-
consistency.  Therefore, since Members'  laws are presumed to be WTO-consistent1004, the Panel 
considers that we are entitled to assume that these laws are WTO-consistent.   
6.550  Antigua has argued with respect to these laws, however, that the United States has not 
submitted sufficient information on them and that it merely cites a number of specific laws by way of 
example but does not try to give a comprehensive overview of the main state and federal laws at 
issue.1005  We note that the United States has made sp ecific reference to the RICO statute, the 
Organized Crime Control Act of 1970 "findings", an d Attorney General Order 1386-89 in arguing that 
criminal laws relating to organized crime justif y the Wire Act, the Travel Act and the Illegal 
Gambling Business Act.  We consider that the Unit ed States has submitted sufficient information in 
relation to the RICO statute.  In particular, it has named it, explained it and provided the text 
containing the relevant provisions.1006  Accordingly, we will confine our attention to the RICO statute 
in considering the United States' defence under Ar ticle XIV(c) but will make reference to the 
Organized Crime Control Act of 1970 "findings " and Attorney General Order 1386-89 for the 
definition of organized crime to the extent  that such reference is necessary.   
6.551  In summary, the Panel finds that the United States may not rely upon state gambling laws in 
making its defence under Article XIV(c) because th e laws of four US states upon which the United 
States seeks to rely have been found to be inconsis tent with US obligations under the GATS in these 
proceedings. With respect to the other state laws , the Panel finds that the United States has not 
discharged its obligation to specifically identify th e state gambling laws upon which it seeks to rely 
and the obligations contained therein.   In relation to criminal laws relating to organized crime, we find 
that the United States may rely upon the RICO statute in asserting a defence under Article XIV(c). 
Do the challenged measures secure co mpliance with the RICO statute? 
Existence of a measure that "secures compliance" with the RICO statute  
6.552  According to the United States, the Wire Act aids  in the enforcement of the RICO statute.  
The Wire Act is part of an essential enforcement strategy insofar as it places restrictions on major 
sources of funds for organized crime.1007  The United States submits that local law officials seeking to 
enforce such laws are often powerless to act without the aid and assistance of the federal 
government.1008 The United States submits that the Travel Ac t, similarly, aids in the enforcement of 
the RICO statute.  The United States argues more par ticularly that the Travel Act enables the federal 
government to "take effective action against th e racketeer who conducts an unlawful business but 
lives far from the scene in comfort and safety."1009 The United States also submits that US courts have 
confirmed that the Illegal Gambling Business Act provides an enforcement tool in cases where local 
officials fail to prosecute illegal gambling.1010  
                                                      
1003 United States' reply to Panel question No. 45.  
1004 Appellate Body Report on US – Carbon Steel , para. 115 
1005 Antigua's comments on the United States' reply to Panel question No. 45. 
1006 See the United States' reply to Panel question No. 45, Exhibit US-35 and Exhibit US-42. 
1007 United States' second written submission, para. 103. 
1008 United States' second written submission, paras. 74 et seq . 
1009 United States' second written submission, para. 80. 
1010 United States' second written submission, para. 85.  WT/DS285/R 
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6.553  The Panel notes that the United States has provi ded it with the text of the RICO statute1011, 
which defines "racketeering activity" to include "any act or threat involving ... gambling ... which is chargeable under State law".  The statute further provides in relevant part that: 
"It shall be unlawful for any person who has re ceived any income derived, directly or 
indirectly, from a pattern of racketeering activity or through collection of an unlawful 
debt in which such person has participated as a principal ... to use or invest, directly 
or indirectly, any part of such income, or the proceeds of such income, in acquisition 
of any interest in, or the establishment or operation of, any enterprise which is 
engaged in, or the activities of which aff ect interstate or foreign commerce ..." 
6.554  Given that the Wire Act prohibits suppliers  of betting and wagering services from using a 
wire communication facility for, inter alia , the transmission in interstate or foreign commerce of bets 
or wagers, we consider that it assists in enforcing, at least in part, the RICO statute.  In particular, it 
helps to curb organized crime operations that might rely upon the use of wire communication 
technologies for the supply of gambling and betting services across state and international borders. 
Therefore, we find that the Wire Act "secures compliance" with the RICO statute. 
6.555  The Travel Act prohibits the supply of gambling services through mail or "any facility" in 
interstate or foreign commerce.  We consider that th is Act assists in enforcing, at least in part, the 
RICO statute.  In particular, it helps to curb orga nized crime operations that might rely upon the use 
of mail or other "facilities" for gambling across state a nd international borders.  Thus, we find that the 
Travel Act "secures compliance" with the RICO statute. 
6.556  Finally, we find that the Illegal Gambling Business Act assists in enforcing the RICO statute 
because it prohibits conducting, financ ing, managing, supervising, dir ecting or owning all or part of 
an "illegal gambling business", which ma y have links to organized crime. 
"Necessity" of the measure taken to secure compliance 
6.557  Having found that the Wire Act, the Travel Ac t and the Illegal Gambling Business Act are all 
used to secure compliance with the RICO statut e, we now turn to whether these measures are 
"necessary" to secure compliance with  the RICO statute.  In this regard, based on Appellate Body 
decisions, we must assess: 
(a) the importance of the interests or values that the RICO statute is intended to protect;   
(b) the extent to which the Wire Act, the Tr avel Act and the Illegal Gambling Business 
Act contribute to the realization of the end pursued, that is, to secure compliance with 
the RICO statute; and   
(c) the trade impact of the Wire Act, the Tr avel Act and the Illegal Gambling Business 
Act.   
6.558  With respect to the importance of the interests or valu es protected by the RICO statute , the 
United States argues that organized crime poses an "acute" danger to the United States and that the 
RICO statute seeks to address that danger.1012  The Panel notes that the Congressional Statement of 
Findings and Purpose for the RICO statute refers to  organized crime as a significant  drain on the US 
economy, a source of interference with free comp etition and a threat to democratic processes, 
domestic security and the general welfare of the na tion.  The Congressional Statement also refers to 
links between organized crime and the illegal use of force, fraud, corruption and syndicated 
                                                      
1011 Exhibit US-35. 
1012 United States' second written submission, paras. 74 et seq . WT/DS285/R 
Page 260  
 
gambling.
1013  It is clear to us from this statement that the interests protected by the RICO statute are 
very important societal interests that can be characterized as "vital and important in the highest degree" in a similar way to the characterization of  the protection of human life and health against a 
life-threatening health risk by the Appellate Body in EC – Asbestos .
1014   
6.559  As for the extent to which the Wire Act, the Travel Act and th e Illegal Gambling Business Act 
contribute to the realization of the end pursued , namely to secure of compliance with the RICO 
statute, the United States argues that these Acts ma ke an essential contribution to the enforcement of 
this law. The United States submits that the Wire Act aids in suppressing organized gambling in pursuance of the organized crime laws because, in  its absence, the use of wire communications 
technologies for the dissemination of gambling inform ation frustrate local law-enforcement efforts 
aimed at combating organized crime.
1015  The United States submits that, similarly, the Travel Act 
aids in suppressing organized gambling in pursuance of the organized crime laws because, in its 
absence, local law-enforcement efforts aimed at combating organized crime are frustrated.1016  With 
respect to the Illegal Gambling Business Act, the Unite d States refers to a statement by one legislator 
who observed that the Illegal Gambling Business Ac t provides "an impetus for effective and honest 
local law enforcement, but also by making availabl e to assist local effort s the expertise, manpower, 
and resources of the Federal agencies which un der existing Federal antigambling statutes have 
developed high levels of special competence for dealing with gambling and corruption cases."1017  
6.560  The Panel does not consider that the issue of  the possible of involvement of Antigua's 
gambling industry in organized crime is relevant in  deciding whether or not the Wire Act, the Travel 
Act and the Illegal Gambling Business Act contri bute to securing compliance with criminal laws 
dealing with organized crime, such as the RICO stat ute.  Rather, it is our view that our examination 
should entail an objective assessment of whether and, if  so, the extent to which, these Acts play a role 
in enforcing the laws and regulations in question.  We find that, in fact, the Wire Act does make a 
significant contribution to ensuring that local law enfo rcement efforts to enforce criminal laws against 
organized crime, including the RICO statute, are not undermined, given that the Act applies to the 
supply of betting and wagering services by wire co mmunication across intersta te and international 
borders.  The Panel also finds that the Travel Ac t makes a significant contribution to ensuring that 
local law enforcement efforts to enforce criminal laws against organized crime, including the RICO 
statute, are not undermined, given that it appli es to the supply of betting and wagering services by 
mail and other "facilities" across interstate and intern ational borders.  Finally, the Panel finds that the 
Travel Act and the Illegal Gambling Business Act make a significant contribution in ensuring that 
local law enforcement efforts to enforce criminal laws against organized crime, including the RICO 
statute, are not undermined.  In making certa in gambling activity illegal under federal law by 
reference to what is illegal under state law, they  allow federal resources to be used to combat 
organized crime. 
6.561  With respect to the trade impact of the Wire Act, the Travel Act and the Illegal Gambling 
Business Act , Antigua argues that the effect of, inter alia , the Wire Act, the Travel Act and the Illegal 
Gambling Business Act is total prohibition, which is  the most trade-restrictive approach possible.1018 
Indeed, the United States has admitted as much when arguing that a Member has "the right to heavily 
restrict a highly risky service (in this case, gambling by remote supply) while allowing the use of a less risky service [in this case, gambling by non-remote means]".
1019   
                                                      
1013 Exhibit US-35, pp. 812-813. 
1014 Appellate Body Report on EC – Asbestos , para. 172. 
1015 United States' second written submission, paras. 78 et seq . 
1016 United States' second written submission, paras. 78 et seq . 
1017 Congressional Record H9712 contained in Exhibit US-32. 
1018 Antigua's second oral statement, para. 71. 
1019 United States' second written submission, para. 93.  WT/DS285/R 
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6.562  As to whether there are any WTO-consistent alternatives to the prohibition imposed by the 
Wire Act, the Travel Act and the Illegal Gambling Business Act that are reasonably available to the United States, we note the submission by the United St ates that the Wire Act, the Travel Act and the 
Illegal Gambling Business Act are "indispensable" to defeating organized crime.
1020  However, it 
cannot be enough that the United States believes and ma intains that a measure is  "indispensable".  The 
onus lies on the United States to show that it has explor ed WTO-consistent altern atives.  As we stated 
above in paragraphs 6.522-6.531, we believe that the United States should have engaged in good faith 
bilateral or multilateral consultations  and/or negotiations with Antigua  when invited to do so, with a 
view to exploring whether there were any ways of  meeting its concerns with regard to organized 
crime in a WTO-consistent manner.  
6.563  Having identified and evaluated each of the el ements that we must assess in determining 
whether the Wire Act, the Travel Act and the I llegal Gambling Business Act are "necessary" to secure 
compliance with the RICO statute, we will now "weigh and balance"  our assessment of those 
elements.   
6.564  In the Panel's view, the interests protected by the RICO statute are important. Further, in our 
view, the Wire Act, the Travel Act and the Illegal Gambling Business Act make a significant 
contribution to ensuring that local law enforcemen t efforts to enforce criminal laws relating to 
organized crime, including the RICO statute are not  undermined.  On the other hand, the measures in 
question have a significant impact on trade and the United States has not explored and exhausted WTO-consistent alternatives in the form of consu ltations and/or negotiations  to determine whether 
there is a way of ensuring that its organized crim e concerns can be addressed in a WTO-consistent 
manner.  In our view, the United States is required to  do so in order to demons trate that the challenged 
measures are "necessary" within the meaning Article XIV(c). 
Overall conclusion on whether the Wire Act,  the Travel Act and the Illegal Gambling 
Business Act are provisionally justified under Article XIV(c)  
6.565  In sum, we conclude that, for the reasons expl ained above, the United States has not been able 
to provisionally justify that the Wire Act, the Travel  Act (when read together with the relevant state 
laws)1021 and the Illegal Gambling Business Act (when r ead together with the relevant state laws)1022 
are necessary within the meaning of Article XIV( c) of GATS to secure compliance with the RICO 
statute, but which we, nonetheless, acknowledge are impor tant to enforce US criminal laws relating to 
organized crime. 
(e) The chapeau of Article XIV 
6.566  Given that the Panel has reached the conclusion that the United States has not been able to 
provisionally justify the Wire Act, the Travel Act (w hen read together with the relevant state laws) 
and the Illegal Gambling Business Act (when read together with the relevant state laws) under 
Article XIV(a) nor under Article XIV(c) of the GATS,  logically, it is not necessary for us to proceed 
to consider whether the requirements of the chapeau of Article XIV have been met.  However, since 
important arguments have been made by the parti es on key issues discussed below, we have decided 
to address them so as to assist the parties in resolving the underlying dispute in this case. 
                                                      
1020 United States' second written submission, para. 105. 
1021 We recall that the "relevant state laws" for the purposes of the Travel Act are state laws that 
prohibit a "business enterprise involving gambling".  Such state laws would include but are not limited to § 14:90.3 of the Louisiana Rev. Stat. Ann., § 17A of chapter 271 of Massachusetts Ann. Laws, § 22-25A-8 of the 
South Dakota Codified Laws, and § 76-10-1102(b) of the Utah Code. 
1022 We recall that the "relevant st ate laws" for the purposes of the Illegal Gambling Business Act are 
state laws that prohibit a "gambling business ".  Such state laws would include but are not limited to § 14:90.3 of 
the Louisiana Rev. Stat. Ann., § 17A of chapter 271 of Massachusetts Ann. Laws, § 22-25A-8 of the South 
Dakota Codified Laws, and § 76-10-1102(b) of the Utah Code. WT/DS285/R 
Page 262  
 
6.567  The United States claims that the Wire Act, th e Travel Act and the Illegal Gambling Business 
Act meet the requirements of the chapeau of Ar ticle XIV, as none of these measures discriminate on 
the basis of nationality.  The United States submit s that these measures reflect authentic societal 
concerns and were enacted long be fore the existence of the Internet and before the GATS came into 
force.  The United States further submits that this  is evidence that protectionist motivations are 
absent.
1023   
6.568  Antigua argues that the manner in which th e US measures are applied constitutes both 
"arbitrary and unjustifiable discrimination" and a "d isguised restriction on trade in services" within 
the meaning of the chapeau of Article XIV.1024   
(i) The legal standard under the chapeau of Article XIV 
6.569  The chapeau of Article XIV reads as follows: 
"Subject to the requirement that such me asures are not applied in a manner which 
would constitute a means of arbitrary or unjustifiable discrimination between 
countries where like conditions prevail, or a disguised restriction on trade in services, 
nothing in this Agreement shall be constr ued to prevent the adoption or enforcement 
by any Member of measures ..."  
6.570  The chapeau requires that the measures in question are not applied  in a manner that would 
constitute a means of arbitrary or unjustifiable discrimination between countries where like conditions 
prevail, or a disguised restriction on trade in services.  
6.571  The Panel notes that the chapeau of Article XI V is textually similar to the chapeau of 
Article XX of the GATT 1994.  On the basis of th e comments made by the Appellate Body referred to 
above regarding the applicability of jurisprudence under the GATT 1994 to the GATS1025, we will 
refer to such jurisprudence to the extent to which it is applicable and relevant in interpreting and 
applying the chapeau to Article XIV in this case. 
6.572  We begin by recalling several principles relevant  to the interpretation and application of the 
chapeau of Article XIV of the GATS on the basis of  jurisprudence in respect of Article XX of the 
GATT 1994. 
6.573  First, we recall jurisprudence in which the A ppellate Body identified some broad parameters 
within which exceptions under the GATT 1994 may be  relied upon.  In the specific context of 
Article XX of the GATT 1994, the Appellate Body in US – Gasoline stated that: 
"The burden of demonstrating that a measure  provisionally justified as being within 
one of the exceptions set out in the individual paragraphs of Article XX does not, in 
its application, constitute abuse of su ch exception under the chapeau, rests on the 
party invoking the exception.  That is, of necessity, a heavier task than that involved 
in showing that an exception, such as Ar ticle XX(g), encompasses the measure at 
issue."1026 
6.574  The Appellate Body in US – Gasoline also stated that the chapeau  to Article XX of the GATT 
1994 has been worded to prevent the abuse  of exceptions under that Article: 
                                                      
1023 United States second written submission, para. 119. 
1024 Antigua's second oral statement, paras. 80-83. 
1025 See para. 6.448 above. 
1026 Appellate Body Report on US – Gasoline , p. 22.  WT/DS285/R 
 Page 263 
 
 
"The chapeau by its express terms addresses, not so much the questioned measure or its specific contents as such, but rather  the manner in which that measure is 
applied.
1027  It is, accordingly, important to underscore that the purpose and object of 
the introductory clauses of Article XX is generally the prevention of 'abuse of the 
exceptions of [what was later to become] Article [XX].'1028  This insight drawn from 
the drafting history of Article XX is a valu able one.  The chapeau is animated by the 
principle that while the exceptions of Artic le XX may be invoked as a matter of legal 
right, they should not be so applied as to frustrate or defeat the legal obligations of the holder of the right under the substantive rules of the General Agreement .  If those 
exceptions are not to be abused or misu sed, in other words, the measures falling 
within the particular exceptions must be a pplied reasonably, with due regard both to 
the legal duties of the party claiming the exception and the legal rights of the other parties concerned."
1029 
6.575  The Appellate Body in US – Shrimp  elaborated on the notion of preventing abuse or misuse 
of the exceptions under Article XX of the GATT 19 94.  The Appellate Body found that "a balance 
must be struck between the right  of a Member to invoke an exception under Article XX and the duty 
of that same Member to respect the treaty rights of the other Members".1030  The Appellate Body then 
linked the balance of rights and obligations under the chapeau of Article XX to the general principle 
of good faith: 
"The chapeau of Article XX is, in fact, but one expression of the principle of good 
faith.  This principle, at once a general principle of law and a general principle of 
international law, controls the exercise of rights by states.  One application of this 
general principle, the application widely known as the doctrine of  abus de droit , 
prohibits the abusive exercise of a state' s rights and enjoins that whenever the 
assertion of a right 'impinges on the field covered by [a] treaty obligation, it must be exercised bona fide, that is to say, reasonabl y'.  An abusive exercise by a Member of 
its own treaty right thus results in a breach of the treaty rights of the other Members 
and, as well, a violation of the treaty obligation of the Member so acting.  Having said this, our task here is to interpret th e language of the chapeau, seeking additional  
interpretative guidance, as appropriate, from the general principles of international 
law."
1031 
6.576  It is on the basis of this obligation of good faith and because it had negotiated with some 
Members but not with others, that the Appellate Bo dy concluded that the United States was acting 
inconsistently with the chapeau of  XX of the GATT in that dispute.1032   
                                                      
1027 (original footnote ) This was noted in the Panel Report on United States – Imports of Certain 
Automotive Spring Assemblies , BISD 30S/107, para. 56;  adopted on 26 May 1983. 
1028 (original footnote ) EPCT/C.11/50, p. 7;  quoted in Analytical Index:  Guide to GATT Law and 
Practice, Volume I, p. 564 (1995). 
1029 Appellate Body Report on US – Gasoline , p. 22. 
1030 Appellate Body Report on US – Shrimp , para. 156. 
1031 Appellate Body Report on US – Shrimp , para. 158.  In the following paragraph 159, the Appellate 
Body added:  "The task of interpreting and applying the chapeau is, hence, essentially the delicate one of 
locating and marking out a line of equilibrium between th e right of a Member to invoke an exception under 
Article XX and the rights of the other Members under varying substantive provisions (e.g., Article XI) of the 
GATT 1994, so that neither of the competing rights will cancel out the other and thereby distort and nullify or 
impair the balance of rights and obligations constructed by the Members themselves in that Agreement.  The 
location of the line of equilibrium, as expressed in the chapeau, is not fixed and unchanging; the line moves as 
the kind and the shape of the measur es at stake vary and as the fact s making up specific cases differ." 
1032 Appellate Body Report on US – Shrimp (Article 21.5 – Malaysia) , paras. 119-123. WT/DS285/R 
Page 264  
 
6.577  The Appellate Body has also provided certain guidance on the meaning of the terms "arbitrary 
or unjustifiable discrimination between countries where like conditions prevail" and "disguised 
restriction", which are used in the chapeau to both Article XX of the GATT 1994 and Article XIV of 
the GATS. 
6.578  With respect to the meaning of "arbitrary or unjustifiable discrimination between countries 
where like conditions preva il", the Appellate Body in US – Shrimp stated that: 
"In order for a measure to be applied in a manner which would constitute "arbitrary or 
unjustifiable discrimination between countri es where the same conditions prevail", 
three elements must exist.  First, the application of the measure must result in discrimination .  As we stated in United States – Gasoline , the nature and quality of 
this discrimination is different from the di scrimination in the treatment of products 
which was already found to be inconsistent with one of the substantive obligations of 
the GATT 1994, such as Articles I, III or XI.
1033  Second, the discrimination must be 
arbitrary  or unjustifiable  in character.  We will  examine this element  of arbitrariness  
or unjustifiability  in detail below.  Third, this discrimination must occur between 
countries where the same conditions prevail .  In United States – Gasoline , we 
accepted the assumption of the participants in  that appeal that such discrimination 
could occur not only between different exporting Members, but also between 
exporting Members and the importing Member concerned.  Thus, the standards embodied in the language of the chapeau ar e not only different from the requirements 
of Article XX(g);  they are also different from the standard used in determining that 
Section 609 is violative of the substantive rules of Article XI:1 of the 
GATT 1994."
1034  
6.579  The Appellate Body in US – Gasoline provided certain guidance on the term "disguised 
restriction" on international trade: 
"'Arbitrary discrimination', 'unjustifiable discr imination' and 'disguised restriction' on 
international trade may, accordingly, be read  side-by-side;  they impart meaning to 
one another.  It is clear to us that 'disguised restriction' includes disguised 
discrimination  in international trade.  It is equally clear that concealed  or 
unannounced  restriction or discrimination in international trade does not exhaust the 
meaning of 'disguised restriction'.  We cons ider that 'disguised restriction', whatever 
else it covers, may properly be read as embr acing restrictions amounting to arbitrary 
or unjustifiable discrimination in interna tional trade taken under the guise of a 
measure formally within the terms of an exception listed in Article XX.  Put in a 
somewhat different manner, the kinds of c onsiderations pertinent in deciding whether 
the application of a particular measure amounts to 'arbitrary or unjustifiable discrimination', may also be taken into account in determining the presence of a 
'disguised restriction' on international trade.   The fundamental theme is to be found in 
the purpose and object of avoiding abuse or illegitimate use of the exceptions to substantive rules available in Article XX."
1035 
6.580  We understand from the Appellate Body's comments in US – Gasoline  that there is a certain 
degree of overlap between, on the one hand, what may be considered as  "arbitrary or unjustifiable 
discrimination" in the context of the chapeau a nd, on the other, what may be considered as a 
                                                      
1033 (original footnote ) In US – Gasoline , adopted 20 May 1996, WT/DS2/AB/R, p. 23, we stated:  
"The provisions of the chapeau cannot logically refer to the same standard(s) by which a violation of a substantive rule has been determined to have occurred." 
1034 Appellate Body Report on US – Shrimp , para. 150. 
1035 Appellate Body Report on US – Gasoline , p. 25.   WT/DS285/R 
 Page 265 
 
 
"disguised restriction on trade".  This is so because a "disguised restriction" includes disguised 
discrimination  in international trade and a "disguised restriction" may be read as embracing 
restrictions amounting to arbitrary or unjustifiable di scrimination in international trade.  Accordingly, 
we consider that the manner in which a measure is applied may simultaneously lead to the conclusion 
that such an application constitutes arbitrary or unj ustifiable discrimination and a disguised restriction 
on trade within the meaning of the chapeau of Article XIV.   
6.581  To sum up these interpretive principles, th e chapeau of Article XX of the GATT 1994 
addresses not so much a challenged measure or its specific content, but rather the manner in which 
that measure is applied, with a view to ensuring th at the exceptions of Article XX are not abused.  In 
order to do so, the chapeau of Article XX identifies three standards which may be invoked in relation 
to the same facts: arbitrary discrimination, unjus tifiable discrimination and disguised restriction on 
trade.  In our view, these principles would also be a pplicable in relation to Article XIV of the GATS.   
6.582  With these general interpretative principles in mind, the Panel now proceeds to consider the 
parties' arguments as to whether the US measures in  question are consistent with the requirements of 
the chapeau of Article XIV.  More particularly, in light of Antigua's challenge, we will consider 
whether there is evidence that the manner in which the United States applies the Wire Act, the Travel 
(when read together with the relevant state la ws) Act and the Illegal Gambling Business Act (when 
read together with the relevant state laws) c onstitutes "arbitrary and unjustifiable discrimination 
between countries where like conditions prevail" and/or a "disguised restriction on trade".   
(ii) Application of the legal standard under the chapeau of Article XIV to the facts of this case 
6.583  The Panel notes that the United States did not argue and develop its defence under 
Article XIV until it made its second written submissi on.  It only affirmatively invoked Article XIV 
during the Panel's second substantive meeting with th e parties in response to a question posed by the 
Panel.   
6.584  Antigua did not advance much argumentation in response to the submissions made and 
evidence adduced by the United States in support of  its defence under Article XIV.  However, we 
consider that a number of the factual arguments ma de by Antigua in the context of Article XVII are 
relevant in deciding whether or not the measures in  question are applied in a manner that constitutes 
"arbitrary and unjustifiable discrimination between countries where like conditions prevail" and/or a 
"disguised restriction on trade".  More particularly, we  consider that they are relevant in determining 
whether or not the United States is consistent in  prohibiting the remote supply of gambling and 
betting services.  In our view, the absence of consiste ncy in this regard may lead to a conclusion that 
the measures in question are applied in a manne r that constitutes "arbitrary and unjustifiable 
discrimination between countries where like conditions  prevail" and/or a "disguised restriction on 
trade".  Below, we evaluate all the evidence presen ted to the Panel that we consider relevant in 
determining whether the United States has been ap plying and enforcing domestically its prohibition 
on the remote supply of gambling and be tting services in a consistent manner.  
Enforcement against local suppliers 
6.585  Antigua submits that, although large-scale Intern et operators in the United States are offering 
betting services via the Internet, the United States does not take enforcement action against them.1036 
Antigua submits that several US-based compani es, namely, Youbet.com, TVG, Capital OTB and 
Xpressbet.com, have been providing telephone or online gambling and betting services for some 
time.1037  Antigua argues that, in contrast, in the case of United States v. Jay Cohen, an operator of an 
Internet sportsbook service based in Antigua was prosecuted and ultimately convicted under the Wire 
                                                      
1036 Antigua's first oral statement, para. 94. 
1037 Antigua's first written submission, para. 118;  Antigua's reply to Panel question No. 19. WT/DS285/R 
Page 266  
 
Act even though that operator had modelled his business on that of Capital OTB, a US company that has been offering interstate betting by telephone for more than 20 years as well as more recently by 
the Internet without prosecution under the Wire Act.
1038   
6.586  The United States submits that it applies its pr ohibition on the remote supply of gambling and 
betting services equally as regards domestic companies and those supplying such services from 
abroad.1039  In support, the United States refers to  statistics from the Organized Crime and 
Racketeering Section of the Department of Justice that show that it approved 90 racketeering prosecutions from 1992 to 2002 allegi ng violations of the Wire Act, the Illegal Gambling Business 
Act or both.  The United States submits that th e vast majority of these 90 cases involved purely 
domestic betting activity, not cross-border gambling.  The United States also refers to statistics from 
the Department of Justice that show that 125 cases were filed under the Wire Act and 951 cases were 
filed under the Illegal Gambling Business Act be tween 1992 and September 2003.  The Department 
of Justice confirmed that only a handful of th ese cases involved supply of gambling from outside the 
United States.
1040 
6.587  According to the United States, while Youbet.co m states on its website that it is in "full 
compliance with all applicable state and federal law"1041, Youbet.com disclosed in its 2002 annual 
report that "the United States Justice Department is in the process of taking action against selected 
companies that it deems to be operating without pr oper licensing and regulatory approval"  and that 
Youbet.com "faces the risk" of criminal proceedings and penalties brought by the government, and the United States agrees with that risk assessment.
1042 The United States further submits that there have 
been many reported court cases representing just a small fraction of all prosecutions in which the 
Department of Justice used the federal gambling la ws that are challenged by Antigua to prosecute 
illegal wagering on horseracing.1043  The United States points to arrest figures for illegal gambling in 
support of its argument that the Department of Justice considers illegal gambling a serious crime 
meriting active investigation and prosecution.1044 
6.588  In relation to the enforcement of the US prohi bition on the remote supply of gambling and 
betting services against domestic  suppliers of such services, the Panel notes indications by the United 
States that prosecution proceedings against Youbet.com1045 are currently pending and, more generally, 
                                                      
1038 Antigua's reply to Panel question No. 12.  In addition, we note that, while Antigua has submitted 
evidence in Exhibits AB-163, AB-165 and AB-166 to suggest that underage gambling and betting occurs when 
the relevant services are supplied through non-remote means in the United States, Antigua has not suggested 
that the United States does not enforce its laws to pr ohibit such underage gambling and betting in the United 
States.  Therefore, we do not deal with this argument here. 
1039 United States' first written submission, para. 101. 
1040 United States' second oral statement, paras. 62–66. 
1041 United States' reply to Panel question No. 21. 
1042 United States' second oral statement, paras. 66–67 .  The United States refers to Youbet.com, Inc., 
U.S. Securities and Exchange Commission Form 10 K An nual Report under Section 13 or 15(d) of the 
Securities Exchange Act of 1934 fo r the fiscal Year Ended December 31 , 2001, Commission File Number: 33 
13789LA (April 15, 2002), available at http://www.sec.gov/Archives/edgar/data/814055/000102140802005310/ 
0001021408 02 005310.txt. 
1043 United States' second oral statement, para. 65.  The United refers in particular to Erlenbaugh v. 
United States, 409 U.S. 239 (1972);United States v. Southard, 700 F.2d 1 (1st Cir. 1983), cert. denied, 464 U.S. 
823 (1987); United States v. Denton, 556 F.2d 811 (6th Cir.), cert. denied, 434 U.S. 892 (1977); United States v. 
O'Neill, 497 F.2d 1020 (6th Ci r. 1974; United States v. Sacco, 491 F.2d 995 (9th Cir. 1974);  United States v. 
Swank, 441 F.2d 264 (9th Cir. 1971); United States v. Bergland, 318 F.2d 159 (7th Cir. 1963), cert. denied, 375 U.S. 861 (1963);United States v. Athanas, 362 F. Supp. 411 (E.D. Mo. 1973); United States v. Yaquinta, 204 F. 
Supp. 276 (N.D.W.Va. 1962). 
1044 United States' first written submission, paras. 23 et seq ; United States' closing remarks, second oral 
statement, para. 9. 
1045 Exhibit AB-42 indicates that Youbet.com supplies services by remote means relating to wagering 
on horse racing only.  WT/DS285/R 
 Page 267 
 
 
that it applies and vigorously enforces its proh ibition on the cross-border supply of gambling and 
betting services against domestic and foreign suppliers alike.1046  We have no evidence as to the 
enforcement action, if any, that the United States is taking against other remote suppliers of gambling 
and betting services, including TVG, Capital OTB and Xpressbet.com.1047  With respect to 
enforcement of the US prohibition on the remote  supply of gambling and betting services against 
suppliers of such services from other Members , we have evidence of the prosecution of one Antiguan 
operator for having failed to abide by the prohib ition against the remote supply of gambling and 
betting services under the Wire Act.1048    
6.589  In our view, the foregoing evidence is inconclusi ve.  We, therefore, find that the United States 
has failed to demonstrate that the manner in which it enforced its prohibition on the remote supply of 
gambling and betting services against TVG, Capital OTB and Xpressbet.com is consistent with the 
requirements of the chapeau.   
Video lottery terminals  
6.590  Antigua refers to a number of US states where video lottery terminals are legal1049 and notes 
that state lotteries market and sell their products through computers and electronic connections to the 
source of the lotteries.1050  Antigua submits these operations involve "remote" gambling because the 
gambler does not need to physically go to the lottery to play.1051 The United States argues that, with 
respect to the video lottery terminals, the service consumer must present himself or herself in person at an authorized lottery distribution location.  Thus, the supply of the service by these means is non-
remote.
1052   
6.591  The Panel recalls that the United States has defined the "remote" supply of gambling and 
betting services as follows: 
"By remote supply, the United States means situations in which the gambling service 
supplier (whether foreign or domestic) and the service consumer are not physically 
together.  In other words, the consumer of a remotely supplied service does not have 
to go to any type of outlet, be it a reta il facility, a casino, a vending machine, etc.  
Instead, the remote supplier has no point of presence but offers the service directly to 
the consumer through some means of dist ance communication.  Non-remote supply 
means that the consumer presents himself or herself at a supplier's point of presence, thus facilitating identification of the individual, age verification, etc."
1053 
6.592  According to this definition, the United St ates defines non-remote supply as instances where 
the consumer presents himself or herself at a supp lier's point of presence to facilitate, amongst other 
things, identification of the individual and age verification.   
                                                      
1046 In addition to the evidence pointed to by the United States in paragraph 6.586 above, we note that 
the National Gambling Impact Study Commission Final Report states that "The federal government has been 
active in the area of Internet gambling.  Thus far, DOJ has investigated and brought charges of violating the 
Wire Communications Act.  All the defendants operated th eir businesses offshore and maintained that they were 
licensed by foreign governments": Exhibit AB-10, p. 5-9.  
1047 The Panel has evidence that indicates that at l east TVG and Capital OTB are supplying services by 
remote means relating to wagering on horse racing only: Exhibits AB-43, AB-44 and AB-123.  We note that 
Exhibit AB-44 indicates that Capital OTB supplies services relating to lotteries as well as wagering on horse 
racing but there is no suggestion in the eviden ce that these services are supplied remotely.  
1048 Exhibit AB-83. 
1049 Antigua's first written submission, para. 123. 
1050 Antigua's first oral statement, paras. 92-93. 
1051 Antigua's second oral statement, paras. 62-63. 
1052 United States' second written submission, para. 65. 
1053 United States' reply to Panel question No. 42. WT/DS285/R 
Page 268  
 
6.593  In our view, Antigua has not effectively refuted the United States' submission that 
identification and age verification do not occur when lottery tickets are purchased through video 
lottery terminals.  We note that the evidence suggest s that the video lottery terminals are located on 
shop counters, suggesting that they are, in fact, manned.
1054  Consequently, the Panel is not convinced 
that the sale of lottery tickets through video lottery terminals can be categorized as "remote" supply.   
6.594  Therefore, the Panel concludes that, based on the evidence presented to  the Panel regarding 
video lottery terminals, the United States has demons trated that the manner in which it applies the US 
federal prohibition on the remote supply of gambling and betting services domestically is not 
inconsistent with the requirements of the chapeau  of Article XIV of GATS as regards video lottery 
terminals. 
Interstate Horseracing Act 
6.595  Antigua submits that the Interstate Horseraci ng Act ("IHA") permits the remote supply of 
gambling and betting services for horse races.1055  Antigua argues that the federal laws that prohibit 
the use of remote communication to supply gamb ling and betting services do not apply to horse race 
betting because the IHA effectively "exempts" such betting from the application of the relevant 
federal laws.1056  According to the United States, the IHA does not provide legal authority for any 
form of Internet gambling.1057  The United States submits that the IHA did not repeal the pre-existing 
federal laws making such activity illegal.1058 
6.596  The Panel recalls that the United States must su bmit evidence sufficient to substantiate its 
assertion that the provisions of the IHA do not au thorize interstate pari -mutuel wagering over the 
telephone or other modes of electronic communication, including the Internet. 
6.597  The United States has submitted that the IHA is a civil statute for which the federal 
government has no enforcement role.  The United Stat es also submits that, in  December 2000, when 
the definition of the term "interstate off-track wage r" in the IHA was amended, Congress, did not also 
amend pre-existing criminal statutes, which prohibit cross border gambling.1059 Further, the United 
States refers us to a statement made by the then President William J. Clinton after the bill containing 
the amendment to the IHA was passed by Congress,  which suggests that the amendment to the IHA 
was not intended to legalize common pool and inters tate wagering, including "via telephone or other 
electronic media".1060  The statement indicates that the IHA wa s not intended to repeal the Wire Act, 
the Travel Act and the Illegal Gambling Business Ac t, which are specifically referred to in the 
statement.   
6.598  In its submissions, Antigua refers us to the defi nition of "interstate off-track wager" in the 
IHA, which was amended in December 2000 to provide as follows:  
"[T]he term ... 'interstate off-track wager'  means a legal wager placed or accepted in 
one State with respect to the outcome of a horserace taking place in another State and 
                                                      
1054 See Exhibits AB-190 and AB-191.  We note that Antigua has also made reference in its reply to 
Panel question No. 19 to interstate lottery games for whic h lottery tickets are purchased through retail terminals.  
However, in our view, in its reply, Antigua does not demonstrate that the terminals in question are not manned 
so as to facilitate identification and age verification. 
1055 Antigua's first written submission, para. 116. 
1056 Antigua's first oral statement, para. 92. 
1057 United States' first written submission, paras. 33-35; United States' second written submission, 
para. 63.  
1058 United States' reply to Panel question No. 21. 
1059 United States' reply to Panel question No. 21. 
1060 Statement on Signing the Departments of Commerce,  Justice, State, the Judiciary, and Related 
Agencies Appropriation Act (21 December 2000) contained in Ex hibit US-17, pp. 3155-3156.  WT/DS285/R 
 Page 269 
 
 
includes pari-mutuel wagers, where lawful in each State involved, placed or transmitted by an individual in one State via telephone or other electronic media and accepted by an off-track betting system in the same or another State, as well as the combination of any pari-mutuel wagering pools." 
6.599  We agree with Antigua that the text of the re vised statute does appear, on its face, to permit 
interstate pari-mutuel wagering over the telephone or other modes of electronic communication, 
which presumably would include the Internet, as long  as such wagering is legal in both states.  
Antigua also refers us to a statement made by a Member of the US Congress during the parliamentary 
debates regarding the amendment, which suggests th at the amendment to the IHA has the effect of 
legalizing interstate horse race gambling over the Internet.
1061   In our view, even if the IHA did not 
repeal the Wire Act, the Travel Act and the Ille gal Gambling Business Act as has been submitted by 
the United States, there is ambiguity as to the re lationship between, on the one hand, the amendment 
to the IHA and, on the other, the Wire Act, the Travel Act and the Illegal Gambling Business Act.  
We consider this relationship to be critical in dete rmining whether, in fact, the amendment to the IHA 
permits wagering on horse racing by means of electronic communication. 
6.600  Given the conflicting interpretations put forwar d by Antigua and the United States regarding 
the interpretation of the IHA and since it is for th e United States to demonstrate that it has complied 
with the requirements of the chapeau of Article XIV,  we find that the evidence presented to the Panel 
is inconclusive and that the United States has not demonstrated that the IHA, as amended, does not 
permit interstate pari-mutuel wa gering for horse racing over the tele phone or using other modes of 
electronic communication, including the Internet.1062  
Nevada 
6.601  Antigua argues that Nevada bookmakers offer th eir services to home-users via the Internet 
and the telephone.1063  The United States submits that the services provided by Nevada bookmakers 
that are referred to by Antigua are not offered on the publicly accessible Internet, but on a local private network.
1064 In response, Antigua submits that the so-called private network is a security 
technology used over the internet, not a separate local network.1065  Further, in response to a question 
posed by the Panel relating to a reference in th e Bear Stearns Report to proposals for Internet 
gambling in the state of Nevada, the United States s ubmits that Nevada's plans for Internet gambling 
are on hold and that Nevada has been informed by th e Department of Justice that US federal law does 
not permit Internet transmission of a bet or wager.  According to the United States, Nevada officials 
have assured federal officials that no operation license d in Nevada has been approved or authorized to 
use any wagering system that operates over the Internet.1066 
6.602  The only evidence that we have before us with  regard to Antigua's allegation that Nevada 
bookmakers currently offer their services to home-u sers via the Internet and the telephone is an 
advertisement for the supply of services by a Nevada bookmaker.1067  On the basis of this evidence, 
                                                      
1061 Congressional Record H11230-03 contained in Exhibit AB-124, p. 5. 
1062 In forming this conclusion, we have also had regard to Exhibit AB-17, Appendix II, Exhibit AB-39, 
p. 5, Exhibit AB-54, pp. 7 and 29, Exhibit AB-70, p. 7, Exhibit AB-124 and Exhibit AB-125, page 3. 
1063 Antigua's first written submission, para. 122. 
1064 United States' first written submission, paras. 36-37. 
1065 Antigua's first oral statement, para. 7. 
1066 United States' reply to Panel question No. 23. 
1067 Exhibit AB-47.  We note that we have also had regard to evidence that suggests that Internet 
gambling is currently legal or may be legalized in Nevada in the future: See, for example, Exhibit AB-10, p. 5-7, 
Exhibit AB-36, pp. 34-35, Exhibit AB-73 and Exhibit AB-199, p. 4.  However, as noted previously, in response to question No. 23 posed by the panel, the United States indicated that Nevada's plans for Internet gambling are 
on hold and that Nevada officials have assured federal o fficials that no operation licensed in Nevada has been 
approved or authorized to use any wagering  system that operates over the Internet. WT/DS285/R 
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the Panel is not convinced that Nevada bookmakers supply services to home-users via the Internet and 
the telephone.   
6.603  Therefore, the Panel believes that, based on th e evidence presented to the Panel regarding the 
situation in Nevada, the United States has demons trated that the manner in which it applies the 
prohibition on the remote supply of gambling and betting services as regards Nevada is not 
inconsistent with the requirements of the chapeau of Article XIV of GATS. 
Letters from the President of the North Amer ican Association of State and Provincial 
Lotteries 
6.604  Antigua refers to two letters of the president of an association of state lotteries in the United 
States (the "NASPL"), noting that both letters state that the NASPL "does not take a position on 
Internet gambling, per se " but that it is the position of the NASPL "that each individual state should 
be permitted to legislate and regulate the forms of  gaming conducted within its borders, as well as the 
methods by which gaming is offered to the citizens of the state."  Antigua submits that these letters 
clearly indicate that US states fear that Internet gambling will undermine their ability to determine the conditions of competition in the gambling sector in view of the economic benefits accruing to the 
state and its local operators.  Antigua submits that this  demonstrates that the United States' "total ban" 
on the remote supply of gambling and betting servi ces from Antigua is "a disguised restriction on 
trade in services."
1068 
6.605  The Panel has reviewed the letters in question.1069  We note that both letters explicitly state 
that the NASPL "does not take a position on Internet gambling per se ".  Both letters go on to state that 
each individual US state should be permitted to le gislate and regulate the forms of gaming conducted 
within its borders, as well as the methods by which ga ming is offered to citizens of the state.  We 
consider that these letters pertain primarily to the states' concerns regarding their ability to 
autonomously regulate Internet gambling within thei r borders and do not demonstrate the existence of 
an intent to restrict the remote supply of gambling and betting services from abroad.   
6.606  Therefore, the Panel believes that the eviden ce adduced from these letters from the President 
of the North American Association of State and Provincial Lotteries does not indicate that the manner 
in which the United States applies its prohibitio n on the remote supply of gambling and betting 
services is inconsistent with the requirements of the chapeau of Article XIV of GATS.  
Conclusion 
6.607  In summary, on the basis of evidence provi ded to the Panel relating to the domestic 
enforcement of the US prohibition on the remote  supply of wagering services for horse racing against 
TVG, Capital OTB and Xpressbet.com and in light  of the ambiguity relating to the Interstate 
Horseracing Act, which pertains to wagering services for horse racing, we believe that the United States has not demonstrated that it applies its prohibition on the remote supply of these services in a consistent manner as between tho se supplied domestically and those that are supplied from other 
Members.  Accordingly, we believe that the Unite d States has not demonstrated that it does not apply 
its prohibition on the remote s upply of wagering services for horse racing in a manner that does not 
constitute "arbitrary and unjustifiable discriminati on between countries where like conditions prevail" 
and/or a "disguised restriction on trade" in acco rdance with the requirements of the chapeau of 
Article XIV. 
                                                      
1068 Antigua's second oral statement, para. 83 
1069 The letters are contained in Exhibit AB-207.  WT/DS285/R 
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(f) Overall conclusion on Article XIV 
6.608  In sum, in light of the particular circumst ances of this case and for the reasons explained 
above, we find that the United States has not been able to provisionally justify the Wire Act, the 
Travel Act (when read together with the relevant state laws)1070 and the Illegal Gambling Business Act 
(when read together with the relevant state laws)1071 under the provisions of Article XIV(a) and 
Article XIV(c) of the GATS.  While this conclusi on did not require us to proceed further to an 
examination of the consistency of these measur es with the requirements of the chapeau of 
Article XIV, we nonetheless did so to assist the par ties in resolving the underlying dispute in this case .  
We conclude that the United States has not demons trated that it does not apply its prohibition on the 
remote supply of wagering services for horse racing in a manner that does not constitute "arbitrary 
and unjustifiable discrimination between countries where like conditions prevail" and/or a "disguised 
restriction on trade" in accordance with the re quirements of the chapeau of Article XIV. 
VII. CONCLUSIONS, CONCLUDING REMARKS AND RECOMMENDATIONS 
A. CONCLUSIONS  
7.1 The Panel recalls that the following US laws were  determined to be the measures at issue in 
this dispute:   
(a) Federal laws: 
(i) the Wire Act (18 USC § 1084);   (ii) the Travel Act (18 USC § 1952); and  (ii) the Illegal Gambling Business Act (18 USC § 1955).  
(b) State laws: 
(i) Colorado: § 18-10-103 of the Colorado Revised Statutes; 
(ii) Louisiana: § 14:90.3 of the La. Rev. Stat. Ann.;   
(iii) Massachusetts: § 17A of chapter 271 of Mass. Ann. Laws; 
(iv) Minnesota: §§ 609.75, Subdivisions 2 – 3 and 609.755(1) of Minn. Stat. Ann; 
(v) New Jersey:  paragraph 2 of N.J. Const. Art. 4, Sec. VII and § 2A:40-1 of the 
N.J. Code; 
(vi) New York: § 9 of Art. I of N.Y. Const. and § 5-401 of the N.Y. Gen. 
Oblig. L.;  
(vii) South Dakota: §§ 22-25A-1 - 22-25A-15 of the S.D. Codified Laws; and 
(viii) Utah: § 76-10-1102 of the Utah Code Ann. 
                                                      
1070  That is, state laws that prohibit a "business enterprise involving gambling".  Such state laws would 
include but are not limited to § 14:90.3 of the Louisiana Rev. Stat. Ann., § 17A of chapter 271 of Massachusetts 
Ann. Laws, § 22-25A-8 of the South Dakota Codified Laws, and § 76-10-1102(b) of the Utah Code. 
1071 That is, state laws that prohibit a "gambling busi ness ".  Such state laws would include but are not 
limited to § 14:90.3 of the Louisiana Rev. Stat. Ann., § 17A of chapter 271 of Massachusetts Ann. Laws, § 22-
25A-8 of the South Dakota Codified Laws, and § 76-10-1102(b) of the Utah Code. WT/DS285/R 
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7.2 For the reasons set out in this Report, the Panel concludes as follows: 
(a) the United States' Schedule under the GA TS includes specific commitments on 
gambling and betting services under sub-sector 10.D; 
(b) by maintaining the following measures, whic h, on their face, prohibit one, several or 
all means of delivery included in mode 1, contrary to its specific market access 
commitments for gambling and betting services for mode 1, the United States fails to 
accord services and service suppliers of Antigua treatment no less favourable than 
that provided for under the terms, limitati ons and conditions agreed and specified in 
its Schedule, contrary to Article XVI :1 and Article XVI:2 of the GATS: 
(i) Federal laws 
(1) the Wire Act; 
(2) the Travel Act (when read together with the relevant state laws);
 1072 
and 
(3) the Illegal Gambling Business Act (when read together with the 
relevant state laws).1073 
(ii) State laws: 
(1) Louisiana: § 14:90.3 of the La. Rev. Stat. Ann.; 
(2) Massachusetts: § 17A of chapter 271 of Mass. Ann. Laws; 
(3) South Dakota: § 22-25A-8 of the S.D. Codified Laws; and 
(4) Utah: § 76-10-1102(b) of the Utah Code. 
(c) Antigua has failed to demonstrate that the measures at issue are inconsistent with 
Articles VI:1 and VI:3 of the GATS; 
(d) The United States has not been able to demons trate that the Wire Act, the Travel Act 
(when read together with the relevant st ate laws) and the Illegal Gambling Business 
Act (when read together with the relevant state laws): 
(i) are provisionally justified under Articles XIV(a) and XIV(c) of the GATS;  
and 
(ii) are consistent with the requirements of the chapeau of Article XIV of the 
GATS; 
(e) The Panel decided to exercise judicial ec onomy with respect to Antigua's claims 
under Articles XI and XVII of the GATS. 
                                                      
1072  That is, state laws that prohibit a "business enterprise involving gambling".  Such state laws would 
include but are not limited to § 14:90.3 of the Louisiana Rev. Stat. Ann., § 17A of chapter 271 of Massachusetts 
Ann. Laws, § 22-25A-8 of the South Dakota Codified Laws, and § 76-10-1102(b) of the Utah Code. 
1073 That is, state laws that prohibit a "gambling busi ness ".  Such state laws would include but are not 
limited to § 14:90.3 of the Louisiana Rev. Stat. Ann., § 17A of chapter 271 of Massachusetts Ann. Laws, § 22-
25A-8 of the South Dakota Codified Laws, and § 76-10-1102(b) of the Utah Code.  WT/DS285/R 
 Page 273 
 
 
B. CONCLUDING REMARKS BY THE PANEL  
7.3 The Panel wishes to note that it is well aware of  the sensitivities associat ed with the subject-
matter of this dispute, namely gambling and betting services.  Our conclusions are directly linked to 
the particular circumstances of this dispute.  We no te in this regard that the United States may well 
have inadvertently undertaken specific commitments  on gambling and betting services.  However, it is 
not for the Panel to second-guess the intentions of  the United States at the time the commitment was 
scheduled.  Rather, our role is to interpret and apply the GATS in light of the facts and evidence 
before us.    
7.4 We also wish to emphasize what we have not decided in this case.  We have not decided that 
WTO Members do not have a right to regulate, including a right to prohibit, gambling and betting 
activities.  In this case, we came to the conclusi on that the US measures at issue prohibit the cross-
border supply of gambling and betting services in th e United States in a manner inconsistent with the 
GATS.  We so decided, not because the GATS deni es Members such a right but, rather, because we 
found, inter alia , that, in the particular circumstances of  this case, the measures at issue were 
inconsistent with the United States' scheduled co mmitments and the relevant provisions of the GATS. 
C. RECOMMENDATIONS  
7.5 The Panel recommends  that the Dispute Settlement Body requests the United States to bring 
the measures identified in paragraph 7.2(b) above into conformity with its obligations under the 
GATS. 
 
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