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GATS Treaty Specifics

If the United States is able to alter commitments in the 1994 GATS Treaty without any consequences from the other countries that are bound by the GATS Treaty, the U.S. could create a precedence for the disregard of the World Trade Organisation. As the political climate surrounding the online casinos industry begins to stir, most analysts are predicting some serious compensation requests from other nations that previously had access to the U.S. internet gambling industry. The GATS Treaty as it currently reads states that the U.S. is obligated to have open trade borders as far as the online casinos gambling industry is concerned.

Last year the U.S. passed the Unlawful Internet Gambling Enforcement Act – a piece of legislation that effectively banned transactions between U.S. financial institutions and offshore online casinos operators. The WTO ruled that the UIGEA was in violation of the GATS Treaty, and rather than alter the UIGEA, the U.S. announced that it would instead ratify its commitments stated in the treaty. Well, needless to say, that just hasn’t gone over well with other nations that honor their trade commitments stated in the Treaty and had a stake in the U.S.’s online casinos industry prior to the ban.

Altering commitments in an international treaty is actually quite rare, and this online casinos gambling ban and subsequent legal action has been the largest case the WTO has ever previously faced. So, according analysts, "There is a real possibility that the WTO arbitration body will find that unless the U.S. provides commercially meaningful compensation to Costa Rica and Antigua, it cannot withdraw its commitment on gambling, without risking trade sanctions from the affected parties."

That means that though the U.S. has every intention of withdrawing online casinos gambling commitments from GATS, the country may not be willing to pay the price of the withdrawal in increased trade commitments for a handful of nations affected by the U.S.’s stance on internet gambling.