The United States will no longer have to open itself to foreign providers of betting services, a move the National Thoroughbred Racing Association said will strengthen the online pari-mutuel industry.
The World Trade Organization Dispute Settlement Body on May 22 adopted the decision of a WTO arbitration panel after the U.S. government said it had taken steps to formally withdraw its global trade commitment to open the U.S. market to foreign providers of gambling services. The commitment was made to the WTO during the Clinton administration as part of the General Agreement on Trade in Services.
“This is a great day for the pari-mutuel industry,” said Alex Waldrop, NTRA president and chief executive officer. “As a result of the withdrawal by the United States of its GATS commitment, the WTO will no longer play a role in the global debate on U.S. regulation of gambling services over the Internet. The NTRA has monitored this case for over two years, and we have argued from the outset that the GATS commitment should be withdrawn. The decision validates our long-held position.”
The WTO issue surfaced two years ago in the form of a complaint by Antigua, which was seeking access to U.S. Internet gaming markets. In reviewing Antigua’s case, the WTO determined the U.S. wasn't in compliance with WTO standards calling for consistent applications of trade guidelines, and that the U.S. had discriminated between offshore and onshore Internet wagering operators to the detriment of Antigua.
U.S. pari-mutuel officials have said the industry is losing money to offshore operators who take bets on U.S. racing and don't return revenue.
Antigua has procedural rights to secure permission from the WTO to retaliate against the U.S., but it appears the U.S decision to withdraw its WTO market access commitments on gambling services will neutralize the value of those rights. The U.S. withdrawal of its WTO market access commitments doesn’t require the U.S. to make any changes in current laws or practice, nor is it anticipated the government will make any changes as a result.