The US and Antigua & Barbuda are both signatories to the WTO Agreement.

The US argued that it can ban internet gambling on public morals grounds, in accordance with a clause in the agreement. However, Antigua & Barbuda claimed that online gambling was not specifically excluded in the agreement which was supposed to open up other countries’ service industries.

On November 11, 2004, the WTO panel ruled on the claim in Antigua & Barbuda’s favour. The dispute settlement panel ruled that the US was in violation of its commitments under GATS, by preventing foreign online gambling services from accessing the US market.

It was also pointed out that the US ban on online gambling was inconsistent, as the US allowed domestic gambling on horse racing but banned foreign online gambling, which the WTO viewed as discriminatory.

After appealing the decision and losing again, the US did nothing to remedy the situation.

In 2007, Antigua argued that the US had failed to comply with the WTO ruling and sought compensation for the harm done to its online gambling industry. Antigua estimated that US restrictions had cost it more than $3.4 billion.

The WTO agreed that Antigua could seek compensation and, in a rare move, allowed Antigua to impose trade sanctions on the US worth $21 million per year. Antigua was given the right to suspend intellectual property rights on US goods and services as a form of retaliation.

Antigua & Barbuda was allowed to offer US intellectual property (like copyrighted material or trademarks) without paying royalties, as a way to recover the economic losses.

However, Antigua did not pursue this course aggressively, possibly because of concerns about further damaging its relations with the US.

Over the years, Antigua has continued to negotiate with the US for a settlement, but the dispute has remained unresolved. Despite the WTO rulings and authorized sanctions, the US has not opened its market to Antigua’s online gambling operators nor provided adequate compensation.