United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services – Recourse by the United States to Arbitration under Article 22.6 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (WT/DS285): Decision by the Arbitrator

Summary

INTRODUCTION

Initial Proceedings

On 20 April 2005, the Dispute Settlement Body (DSB) adopted the report of the Panel in this dispute, as modified by the report of the Appellate Body.

The Appellate Body inter alia upheld the original panel's finding that the United States’ Schedule includes a commitment to grant full market access in gambling and betting services and upheld the Panel's finding that the United States acts inconsistently with Article XVI:1 and sub-paragraphs (a) and (c) of Article XVI:2 by maintaining certain limitations on market access not specified in its Schedule. The Appellate Body reversed the Panel's finding that the United States had not shown that the three federal statutes are “necessary to protect public morals or to maintain public order”, within the meaning of Article XIV(a). The Appellate Body modified the conclusion of the panel with respect to Article XIV as a whole and found, instead, “that the United States has demonstrated that the Wire Act, the Travel Act, and the Illegal Gambling Business Act are measures ‘necessary to protect public morals or maintain public order', in accordance with paragraph (a) of Article XIV, but that the United States has not shown, in the light of the Interstate Horseracing Act, that the prohibitions embodied in those measures are applied to both foreign and domestic service suppliers of remote betting services for horse racing and, therefore, has not established that these measures satisfy the requirements of the chapeau”.

On 19 August 2005, an arbitrator established under Article 21.3(c) of the DSU determined that the “reasonable period of time” for the United States to implement the recommendations and rulings of the DSB in this dispute was 11 months and 2 weeks from the date of adoption of the Panel and Appellate Body Reports by the DSB. The United States was consequently awarded until 3 April 2006 to bring its measures into conformity with its obligations under the GATS.

On 8 June 2006, Antigua and Barbuda (hereafter “Antigua”) requested consultations with the United States under Article 21.5 of the DSU. On 6 July 2006, Antigua requested the establishment of a panel under Article 21.5 of the DSU.