UNITED STATES – MEASURES AFFECTING THE CROSS-BORDER SUPPLY OF GAMBLING AND BETTING SERVICES
Document: Notification of Other Appeal by Antigua and Barbuda under Article 16.4 and Article 17 of DSU, and under Rule 23(1) of the Working Procedures for Appellate Review
Date: 16 February 2005
Document codes: WT/DS285/7
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

Notification of Other Appeal by Antigua and Barbuda
under Article 16.4 and Article 17 of DSU, and under Rule 23(1) of the Working Procedures for
Appellate Review

 The following notification, dated 19 January 2005, from the Delegation of Antigua and
Barbuda, is being circulated to Members.

Pursuant to Rule 23(1) of the Working Procedures for Appellate Review , Antigua and
Barbuda ("Antigua") hereby notifies the Dispute Se ttlement Body (the "DSB ") of the World Trade
Organisation (the "WTO") of its decision to appeal to the Appella te Body as an Other Appellant
certain issues of law covered in the Report of the Panel in () (the "Final Report").

1. Antigua seeks review of the Panel’s legal conc lusion that Antigua was not entitled to rely on
what was referred to in the Final Report as the "total prohibition" as a "measure" under
Article XXVIII(a) of the General Agreement on Trad e in Services (the "GATS") and Article 6.2 of
the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes (the
"DSU").
1 The Panel erred when it concluded that Antigua had not identified the "total prohibition" in
its Panel request. In making this finding, the Panel misinterpreted Antigua’s Panel request and
incorrectly interpreted and applied DSU Arti cle 6.2 and GATS Articles I:1, I:3(a), XXIII
and XVIII(a).

2. Antigua seeks review of the Panel’s legal conc lusion that, even if Antigua had identified the
"total prohibition" as a "measure" in its Panel request , Antigua was not entitled to rely upon the "total
prohibition" as a measure.
2 In coming to this conclusion, the Panel developed and applied a three-part
test that is both unsupported by a nd inconsistent with DSU Article 6.2 and GATS Articles I:1, I:3(a)
and XXVIII(a). The Panel also erred by failing to objectively assess and ascr ibe any significance to
the United States’ admission that it maintained a "t otal prohibition" on the cross-border provision of
gambling and betting services, contrary to DSU Article 11.

3. In the event the Appellate Body were find in favour of the United States in the review sought
by the United States pursuant to the third numbered paragraph of the United States’ Notice of Appeal
dated 7 January 2005 and reverse the conclusion of th e Panel in paragraph 7.2(b) of the Final Report,
Antigua seeks review of the Panel’s legal conclusion that GATS Article XVI:1 is limited by GATS

1See Final Report, paras. 6.171, 6.169, 6.170 and 6.177. See also id., paras. 6.156 and 6.157.
2See id., paras. 6.171, 6.175–6.185. See also id., para. 197.

Article XVI:2.
3 In making this determination, the Panel adopted a legally incorrect interpretation of
GATS Article XVI.

4. Antigua seeks review of the Panel’s legal c onclusion that measures that prohibit consumers
from using the gambling services offered by Antigua n operators through cr oss-border supply do not
violate GATS Articles XVI:2(a) and XVI:2(c).
4 In making this determination, the Panel adopted a
legally incorrect interpretation of GATS Articles XVI:2(a) and XVI:2(c).

5. Antigua seeks review of the Panel’s decision to consider the claimed defence of the United
States under GATS Article XIV, which was affirmatively raised by th e United States only at the last
session of the second substantive meeting of the Panel with the parties–too late in the proceeding to
allow for a fair opportunity by Antigua to re but the defence and for proper assessment and
adjudication of the claim by the Panel.
5 Additionally, the Panel in essence constructed and completed
the GATS Article XIV on behalf of the United States, thus relieving the United States of its burden of
proof. The consideration by the Panel of the Ar ticle XIV defence submitted by the United States at
such a late date in the proceeding, as well as the construction and completion of such defence by the
Panel on behalf of the United States, is contrary to the requirements of due process, the principle of
equality of arms and the terms of DSU Articles 3.10 and 11.

6. In the event the Appellate Body determ ines that the United States’ GATS Article XIV
defence was properly before the Panel, Antigua seeks review of the Panel’s application and
assessment of GATS Article XIV(a) to the defen ce, which was erroneous in a number of respects,
6
including without limitation (i) failure to properly consider the text of GATS Article XIV; (ii)
improper analysis and application of the t est developed by the Appellate Body in Korea – Measures
Affecting Imports of Fresh, Chilled and Frozen Beef, WT/DS161/AB/R (" Korea – Beef "); and (iii)
failure to make an objective assessment of the matter s before it, including the facts, contrary to DSU
Article 11.

These errors are illustrated, for example, by:

(A) The failure of the Panel to take into consideration footnote 5 of GATS
Article XIV(a), which was mentione d in paragraphs 6.467 and 6.468 of the Final Report, but never
applied to the facts of the case nor mentioned again in the Final Report.

(B) The Panel giving total deference to the fi ndings of United States authorities in making
its assessment of (i) whether the applicable measures are measures d esigned to protect public morals
or to maintain public order and (ii) the "necessary" test set out in Korea – Beef, and in each case not
examining the actual facts before it in making the asse ssments. With respect to (i), in its assessment
of the point, contained in paragraphs 6.479 through 6.487 of the Final Report, the Panel cites no
evidence to support its conclusions other than findi ngs or statements of the United States or its
authorities. With respect to (ii), first, in its assessment of the "importance of the interests or values
that the measures were designed to protect" aspect of the Korea – Beef test, contained in
paragraphs 6.489 through 6.492 of the Final Re port, the Panel cites no evidence to support its
conclusions other than findings or statements of the United States or its authorities and second, in its
apparent differentiation of "remote" gambling services from "non-remote" gambling services,
contained in paragraphs 6.498 through 6.521 of the Final Report, substantially all of the evidence

3See id., paras. 6.298, 6.299 and 6.318.
4See id., paras. 6.382, 6.383, 6.397, 6.398, 6.401, 6.402, 6.405 and 6.406.
5See id., paras. 6.444, 6.583 and 6.584.
6See id., paras. 6.467–6.469, 6.474. 6.479–6.521, 6.533 and 6.535.

cited by the Panel in support of its conclusions ar e findings or statements of the United States or its
authorities7 and a number of the findings are not supported by any evidence at all.

(C) The Panel, in its assessment of the "necessary" test set out in Korea – Beef, reaching
its conclusions regarding the "importance of the interests or values" and the differentiation of
"remote" gambling services based solely upon appa rent "concerns" of the United States without
requiring evidence–and without making any findin g–that the "concerns" we re justified under the
circumstances of this case. The United States submitted no evidence associated with Antiguan
8 cross-
border supply of gambling and betting services of, inter alia (i) money laundering; (ii) fraud; (iii)
health concerns; (iv) underage gambling; or (v) organised crime (collectively, the "Five Concerns").

(D) The failure of the Panel to make an objec tive assessment of the extent to which the
measures at issue actually contributed to the e nds ostensibly pursued by the measures. In
paragraph 6.494 of the Final Report, the Panel dismissed this prong of the Korea – Beef test by
concluding that because the United States measur es prohibited the cross-border supply of gambling
services, the measures "must contribute, at least to some extent, to addressing those concerns."
However, the Panel failed to make any factual in quiry at all as to whether the measures actually
contribute to addressing the Five Concerns.

(E) The Panel ignoring or misapplying factua l evidence presented by Antigua. Antigua
submitted substantial third-party evidence regarding th e existence of the Five Concerns in the United
States domestic gambling market, regulatory schemes and other contexts in which goods or services
are provided on a cross-border or Internet-delivered basis.
9 Very little of this evidence was taken into
consideration by the Panel. The Pa nel erred by failing to consider this evidence (i) in the context of
determining exactly how material the "concerns " of the United States are regarding problems
associated with the Five Concerns; (ii) to assess th e United States’ tolerance of problems associated
with the Five Concerns in its regulated domestic i ndustry; (iii) to determine whether any basis exists
for the differentiation of "remote" gambling ser vices from "non-remote" gambling services in respect
of the Five Concerns; (v) whether reasonable altern atives to prohibition were available to the United
States; or (vi) in contrast to the complete lack of similar evidence adduced by the United States in the
context of the provision of cross-border gambling services.

7. In the event the Appellate Body determ ines that the United States’ GATS Article XIV
defence was properly before the Panel, and furthe r in the event the Appe llate Body upholds the
"three-part" measure identification test developed by the Panel in paragraphs 6.215 through 6.249 of
the Final Report, Antigua seeks review of the Pane l’s finding that the United States had sufficiently
identified the United States’ "RICO" statute
10 for consideration under GATS Article XIV(c). 11 The
Panel’s finding is not supported by analysis unde r the "three-part" test, is not supported by any
evidence and is contrary to DSU Article 11.

8. In the event the Appellate Body determ ines that the United States’ GATS Article XIV
defence was properly before the Panel, Antigua seeks review of the Panel’s application and

7The only other evidence considered by the Panel in this discussion is an out-of-context reference to
some language in a report prepared for Antigua by certain experts (Final Report, para. 6.513) and extracts from
a statement made by a credit card company executive before the United States Congress (id., para. 6.518).
8Nor was any evidence submitted by the United States pertaining to any other jurisdiction.
9Note that this evidence was not presented in the context of GATS Article XIV due to the failure of the
United States to raise its GATS Article XIV defence until after all written submissions had been made, and was
extrapolated by the Panel from Antigua’s discussion of GATS Article XVII. See Final Report, para. 6.584. See
also paragraph 5 above.
1018 U.S.C. §§ 1961–1968.
11See Final Report, paras. 6.548-6.551.

assessment of GATS Article XIV(c) to the defence, which was legally erroneous in a number of
respects,
12 including without limitation (i) in assessing the RICO statute, the Panel failed to properly
apply GATS Article XIV(c) as the Panel had already determined that the state statutes upon which the
RICO statute itself relies were not properly before the Panel; 13 (ii) in assessing the RICO statute, the
Panel failed to properly apply GATS Article XIV(c) as the Panel had already determined that with
respect to the one "concern" addressed by the RICO statute, organised crime, the United States had
not been able to demonstrate it was a spec ific concern related to "remote" gambling; 14 (iii) in
application of the "necessary" test under Korea – Beef , the Panel failed to make an objective
assessment of the matters before it, including the facts, contrary to DSU Article 11.

These errors are illustrated, for example, by:

(A) The Panel giving total deference to the fi ndings of United States authorities in making
its assessment of (i) whether the applicable measu res secure compliance with the RICO statute and
(ii) the "necessary" test set out in Korea – Beef , and in each case not examining the actual facts
before it in making the assessments. With respect to (i), in its assessment of the point, contained in
paragraphs 6.552 through 6.556 of the Final Repo rt, the Panel cited no evidence to support its
conclusions other than findings or statements of the United States or its authorities. With respect
to (ii), in its assessment of the "importance of the interests or values that the measures were designed
to protect" aspect of the Korea – Beef test, contained in paragraph 6.558 of the Final Report, the Panel
cited no evidence to support its conclusions other than findings or statements of the United States or
its authorities.

(B) The failure of the Panel to make an objec tive assessment of the extent to which the
measures at issue actually contributed to the ends pur sued by the RICO statute. In paragraphs 6.559
and 6.560 of the Final Report, the Panel not only re lied solely on findings or statements of the United
States or its authorities in reaching its conclusions, but also failed to require or consider any evidence
that organised crime is a legitimate concern in the context of cross-border gambling services provided
from Antigua or that the measures actually contribu te to the suppression of organised crime and to
what extent they do so.

9. In the event the Appellate Body determ ines that the United States’ GATS Article XIV
defence was properly before the Panel, Antigua seeks review of the Panel’s application and
assessment of the "chapeau" of GATS Article XIV, which was erroneous in a number of respects, 15
including without limitation (i) the Panel’s determin ation to apply the chapeau in the absence of a
finding of a "preliminary justification" in favour of the United States under GATS Article XIV; (ii)
the Panel’s determination to examine only certain narrow segments of the gambling industry in its
assessment of the "discrimination" pr ong of the chapeau test set forth in United States – Import
Prohibition of Certain Shrimp and Shrimp Products , WT/DS58/AB/R (" US – Shrimp "); and (iii) the
Panel’s failure to make an objective assessment of th e matters before it, including the facts, contrary
to DSU Article 11.

These errors are illustrated, for example, by:

(A) In the discussion regarding video lottery terminals in paragraphs 6.590 through 6.594
of the Final Report, the Panel (i) made a conclusion regarding "identification and age verification" in
connection with purchases at video lottery terminals that is not supported by any evidence; (ii)

12See id., paras. 6.550, 6.553–6.557, 6.560, 6.562 and 6.564.
13Id., para. 6.547.
14Id., para. 6.520.
15Id., paras. 6.567, 6.585–6.607.

ignored significant Antiguan evidence to the contrary; and (iii) shifted the burden of proof to Antigua
to "refute" the unproven claim of the United States as to "identification and age verification."

(B) In the discussion regarding Nevada bookmaker s in paragraphs 6.601 through 6.603 of
the Final Report, the Panel (i) made a conclusi on regarding the provision of gambling and betting
services through the Internet in Nevada that is not supported by any evidence; (ii) ignored Antiguan
evidence to the contrary; and (iii) shifted the burden of proof to Antigua to refute the unproven claim
of the United States that Nevada bookmakers do not provide services via the Internet.

(C) The discussion regarding the letters from a state lottery association is without any
context at all.