Antigua - Internet Hosting and Gaming

Internet Hosting and Gaming

Antigua was one of the very first nations to legalize, license, and regulate online gaming and is a primary location for incorporation of online gambling companies. Some countries, most notably the United States, argue that if a particular gaming transaction is initiated outside the country of Antigua then that transaction is governed by the laws of the country where the transaction was initiated. This argument was brought before World Trade Organization and was deemed incorrect.

In 2006 the United States Congress voted to approve the Unlawful Internet Gaming Enforcement Act which criminalized the operations of offshore gaming operators which take wagers from American-based gamblers. This was a prima facie violation of the GATS treaty obligations enforced by the WTO, resulting in a series of rulings unfavorable to the US.

On December 21, 2007 an Article 22 arbitration panel ruled that the United States' failure to comply with WTO rules would attract a US$21 million sanction.

The WTO ruling was notable in two respects:

First, although technically a victory for Antigua, the $21 million was far less than the US$3.5 billion which had been sought; one of the three arbitrators was sufficiently bothered by the propriety of this that he issued a dissenting opinion—an unprecedented move.

Second, a rider to the arbitration ruling affirmed the right of Antigua to take retaliatory steps in view of the prior failure of the US to comply with GATS. These included the rare, but not unprecedented, right to disregard intellectual property obligations to the US.

Antigua's obligations to the US in respect of patents, copyright, and trademarks are affected. In particular, Berne Convention copyright is in question, and also material NOT covered by the Berne convention, including TRIPS accord obligations to the US. Antigua may thus disregard the WIPO treaty on intellectual property rights, and therefore the US implementation of that treaty (the Digital Millennium Copyright Act, or DMCA)—at least up to the limit of compensation.

Since there is no appeal to the WTO from an Arbitration panel of this kind, it represents the last legal word from the WTO on the matter. Antigua is therefore able to recoup some of the claimed loss of trade by hosting (and taxing) companies whose business model depends on immunity from TRIPS provisions.

Software company SlySoft is based in Antigua, allowing it to avoid nations with laws that are tough on anti-circumvention of technological copyright measures, in particular the DMCA in the United States.