UNITED STATES – MEASURES AFFECTING THE CROSS-BORDER SUPPLY OF GAMBLING AND BETTING SERVICES
Document: Recourse to Article 21.5 of the DSU by Antigua and Barbuda Request for Consultations
Date: 12 June 2006
Document codes: WT/DS285/17
Complainant: Antigua and Barbuda
Respondent: U.S.
Third parties: Canada, Taiwan, EU, Japan, Mexico, China
Dispute stage: Implementation & Compliance
Agreements cited: Art. VI, VIII, XVI, XVII, XI  Services (GATS)

UNITED STATES – MEASURES AFFECTING THE CROSS-BORDER SUPPLY
OF GAMBLING AND BETTING SERVICES

Recourse to Article 21.5 of the DSU by Antigua and Barbuda

Request for Consultations

 The following communication, dated 8 June 2006, from the delegation of Antigua and
Barbuda to the delegation of the United States and to the Chairman of the Dispute Settlement Body, is
circulated pursuant to Article 21.5 of the DSU.

 Antigua and Barbuda is pleased to submit this re quest for consultations with the United States
pursuant to paragraph 1 of the "Agreed Procedur es under Article 21 and 22 of the Dispute Settlement
Understanding Applicable to the WTO Dispute (WT/DS285)."

Background

 On 21 July 2003, the Dispute Settlement Body (the "DSB") of the
(the "WTO") established a panel at the request of Antigua and Barbuda in this dispute ("DS285").
Both the panel and the Appellate Body in DS285 found certain measures of the United States to be
inconsistent with certain of the obligations of the United States under the WTO's General Agreement
on Trade in Services (the "GATS"). On 20 April 2005, the DSB adopted the report of the panel, as
modified by the report of the Appellate Body. The resulting DSB recommendations and rulings
include, inter alia , the recommendation that the United States bring the measures found to be
inconsistent with the GATS into conformity with its obligations under that agreement.
1

 On 6 June 2005, Antigua and Barbuda communicated a request to the DSB that the
determination of a reasonable period of time for compliance by the United States with the
recommendations and rulings of the DSB be the subj ect of binding arbitration, in accordance with
Article 21.3(c) of the WTO's Understanding on Rules and Procedures Governing the Settlement of
Disputes (the "DSU").

 On 19 August 2005, the award of the arbitrator determined that the reasonable period of time
for the United States to implement the recommend ations and rulings of the DSB in DS285 was
11 months and two weeks from 20 April 2005. This period of time expired on 3 April 2006.

1 WT/DS285/AB/R, para. 374.

 On 10 April 2006 the United States submitted a status report to the DSB regarding
implementation of the DSB recommendations and rulings.
2 The United States informed the DSB that,
in its opinion, it was in compliance with the recommendations and rulings of the DSB based on the
following statement (the "DOJ Statement") purportedly made by a representative of the United States
Department of Justice to a subcommittee of the United States House of Representatives:

"The Department of Justice views the existing criminal statutes as prohibiting the
interstate transmission of bets or wage rs, including wagers on horse races. The
Department is currently undertaking a ci vil investigation relating to a potential
violation of law regarding this activity. We have previously stated that we do not
believe that the Interstate Horse Racing Act, 15 U.S.C. §§ 3001-3007, amended the
existing criminal statutes.
In view of these circumstances, the Un ited States is in compliance with the
recommendations and rulings of the DSB in this dispute."
The United States Has Failed to Comply with the Recommendations and Rulings of the DSB

 Antigua and Barbuda disagrees that th e United States has complied with the
recommendations and rulings of the DSB in DS285 a nd believes that the United States remains out of
compliance with the United States' obligations under the GATS with respect to the provision of cross-
border gambling and betting services from Antigua and Barbuda to consumers in the United States.

 No Federal Legislation

 First, Antigua and Barbuda considers that the United States has taken no measures to comply
with the recommendations and rulings of the DSB. In DS285, Antigua and Barbuda established the
existence of three federal statutes which serve to prohibit companies from Antigua and Barbuda from
providing cross-border gambling and betting services to consumers located in the United States in
violation of the United States' obligations under the GATS. These three federal statutes are (i) the
Wire Act of 1961, 18 U.S.C. §1084 (the "Wire Act"); (ii) the Travel Act, 18 U.S.C. §1952 (the
"Travel Act"); and (ii) the Illegal Gaming Busi ness Act, 18 U.S.C. §1955 the ("IGBA"). The DSB
recommended that the United States bring these three measures in conformity with its obligations
under the GATS.

 Neither during the reasonable period of time nor to date has the United States introduced,
much less passed, any legislation that would amend or effect the Wire Act, the Travel Act or the
IGBA in such a manner as to make those statut es WTO-consistent. Furthermore, two bills which
have been introduced in the current United States' Congress – H.R. 4777 and H.R. 4411 – are
expressly contrary to the recommendations and ruli ngs of the DSB in DS285, as each would further
institutionalise the discriminatory effect of the th ree United States statutes. The United States has
therefore failed to bring these federal statutes into conformity with its obligations to Antigua and
Barbuda under the GATS.

 No Other Measures

 Second, as noted above, despite having insisted to the Article 21.3(c) arbitrator that the United
States would pursue a legislative remedy to bring itself into conformity with the recommendations
and rulings of the DSB in DS285, the United States asserted it was in compliance on 10 April 2006 by
reference to the DOJ Statement. The DOJ Statemen t is, however, nothing more that a restatement of
the position taken by the United States during th e course of DS285 that was ultimately found

2 WT/DS285/15/Add.1.

unpersuasive by both the panel and the Appellate Bo dy. Assuming, arguendo, that a statement by an
unidentified government employee can constitute a "measure" for purposes of the DSU, Antigua and
Barbuda does not believe that a simple restatement of a legal position taken by a party to a dispute
during its regular course can be considered a "mea sure taken to comply with the recommendations
and rulings" of the DSB within the meaning of Article 21.5 of the DSU.

 The United States Remains Out of Compliance with its GATS Obligations

 Third, regardless of whether the DOJ Statement constitutes a "measure" for purposes of the
DSU or whether it can be considered a "measure ta ken to comply" within the meaning of Article 21.5
of the DSU, the DOJ Statement does not bri ng the United States into compliance with the
recommendations and rulings of the DSB in DS285. In this regard Antigua and Barbuda notes that,
inter alia:

 (1) As Antigua and Barbuda had observed to both the panel and the Appellate Body,
there are a number of reasonable alternative measures available to the United States other
than prohibition to address the concerns of the United States with respect to the provision of
remote gambling and betting services. Since th e adoption of the panel and Appellate Body
reports by the DSB, even more alternatives have become available.

 (2) Since the adoption of the recommendati ons and rulings of the DSB in DS285, not
only have there been no prosecutions of or enforcement actions brought against domestic
remote gambling and betting service providers operating pursuant to the Interstate
Horseracing Act, but in fact there has been significant growth in and expansion of domestic
remote gambling and betting services generally in the United States.

 (3) The position of the United States as reflect ed in the DOJ Statement is not supported
by the bulk of United States legal authority.

Nonetheless, licensed, regulated providers of cross-border gambling and betting services from
Antigua and Barbuda to the United States remain su bject to prosecution by United States authorities
3,
contrary to the obligations of the United States under the GATS.

Request for Consultations

 On 23 May 2006, Antigua and Barbuda a nd the United States concluded an "Agreed
Procedures under Articles 21 and 22 of the Dispute Settlement Understanding Applicable to the WTO
Dispute (WT/DS285)" (the "Agreed Procedures").

 In light of the Agreed Procedures, and without prejudice to its other rights under the DSU, the
GATS and the other WTO agreements with respect to compliance by the United States with the
recommendations and rulings of the DSB in DS2 85 or otherwise, Antigua and Barbuda hereby
requests consultations with the United States over th e subject matters raised by this request. As the
Agreed Procedures stipulate that "[i]f Antigua and Barbuda deems it appropriate to invoke
Article 21.5 of the DSU, Antigua and Barbuda will request consultations, which the Parties agree to
hold within 15 days from the date of circulation of the request," Antigua and Barbuda respectfully
requests that the delegation of the United Stat es advise the delegation of Antigua and Barbuda

3 On 17 May 2006, an indictment was unsealed in which the United States Department of Justice
indicted a number of companies and individuals, including the former holder of a gambling and betting license
issued by Antigua and Barbuda, for various alleged violations of United States laws, including the Wire Act,
simply by the provision of those services to consumers in the United States.

promptly of the possible dates during the next w eek or two on which United States' representatives
will be available in order to fix a mutually acceptable date and venue for consultations.