US attorney-generals gang up on WTO gambling ruling

Attorney-generals from 29 US states have expressed serious concerns about the impact of the World Trade Organisation’s (WTO) landmark ruling on internet gaming.

In a letter sent last month to the US Ambassador to the WTO, the attorney-generals call for the US to take the unprecedented step of withdrawing the gaming sector from the country’s commitment to the General Agreement on Trade in Services (GATS).

The move follows the WTO’s ruling against the US in a dispute with the government of Antigua and Barbuda, in which the three-member panel ruled in favour of Antigua that US state restrictions on internet gaming were in breach of the US’s commitments under the GATS treaty.

The signatories, which include New York’s Eliot Spitzer, also expressed concern about the impact of the ruling on the right of US states to regulate in a range of service sectors beyond gambling. They called on the US to involve the states more fully in the ongoing GATS 2000 negotiations.

“We believe that, under our constitutional system of federalism, states should continue to have the flexibility and sovereign authority to determine whether, and under what conditions, gambling occurs within their borders, without such decisions being subject to second-guessing by WTO tribunals,” the letter states.

The letter is a further boost for Herbert Smith and its client Antigua, which took on the case despite widespread scepticism about its chances of success.

The letter states: “The recent WTO appellate body ruling on Antigua’s WTO challenge to the US internet gambling ban is quite troubling.

“It cannot be disputed that the panel’s ruling on several underlying issues raised in this dispute will have significance far beyond the trajectory of this individual case.”

Herbert Smith competition partner Craig Pouncey, who led on the case, said: “This letter puts it beyond doubt that there’s considerable concern about the US loss in this case.”