Changing the GATS contract?


RIP Brian
Feb 22, 2001

NTRA official comments on latest WTO ruling against USA

Interactive Gaming News carried an informative interview with the president of the U.S. trade body, the National Thoroughbred Racing Association this week regarding the predicament in which the USA finds itself following the latest World Trade Organisation ruling in a dispute over online gambling with Antigua.

"The unfortunate fact is that gambling should have never been included under the General Agreement on Trade in Services (GATS) in the first place," president Alex Waldop said in a question and answer session with IGN reporter Emily Swoboda.

Waldop pointed out that one solution may be the removal of the offending clause.

"And the only logical solution, perhaps not a practical solution, is to withdraw gaming from GATS. We're the only country in the world, apparently, that included gambling," he said. "All other countries had the foresight to check the box and remove gambling from consideration.

"We neglected or failed or decided for whatever reason not to exclude, and now we're left with this very difficult decision," Waldop continued. "Not only difficult for the racing industry, but actually it doesn't bode well for other interests across the country because this ruling is based upon federal law, but it could just as easily have been based on state-law claims. It's not just the racing industry that's put in an awkward position by this."

Waldop goes on to explain that withdrawing gaming from the trade agreement is likely to be a complicated process.

"Unfortunately, that's difficult to do because you can't just unilaterally withdraw from a contract. You have to negotiate that withdrawal and hopefully [that can] be done. But, certainly, that's a very high hurdle for reasons that WTO lawyers can explain, but essentially you can't just unilaterally withdraw obligations under contract."

Svoboda reports that each ruling in the ongoing dispute between the United States and the twin-island nation of Antigua and Barbuda has yielded similar results, with the U.S. racing industry essentially stuck in the middle.

The latest ruling, handed down on March 30, upheld previous decisions allowing for the possibility of retaliatory trade sanctions if the United States continues to discriminate by banning online gambling but allowing internal horse racing carve-outs.

Waldrop says although the NTRA is not directly involved in the issue between the two governments, he expects that the US Trade Representative will appeal, and that it is therefore important to see how that goes, ".....before we draw any conclusions about how the WTO case affects U.S. gaming laws affecting Internet gaming, if at all."

Asked by the IGN reporter whether he felt that other members of the U.S. racing industry are basically ignoring the ruling given the fact that it is not final and it will likely be appealed, Waldop said that whilst his association was following the issue, this appeared to be the case "....we're waiting to see how the appellate proceedings turn out before we draw any conclusions."

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