The WTO ruled that the US ban on internet gambling violated the rights of Antigua.
Congress passed a stupid law to ban online gambling, which includes gambling sites run from the small island state of Antigua. Antigua responded that this law violated its rights as a member of the WTO.
I’ll point out again, that states do not comply with the GATT and WTO rulings the majority of the time. If you really want to violate it, go ahead. That said…
Here’s the gist of the case. Antigua’s two main businesses are tourism and online gambling. In 2004, a WTO panel ruled that US gambling laws violated Antigua’s rights. This basic ruling was upheld on appeal.
The problem is that the US ban on online gambling is discriminatory. It is not a complete ban – so some online gambling within the US is legal, but all overseas gambling is illegal.
The US can do one of two things to bring its domestic laws into compliance with the international laws. It can legalize all online gambling, or it can prohibit all online gambling. What it may not do is prohibit international online gambling while allowing domestic online state lotteries, sports betting, and the like.
Antigua’s threat of retaliation is the odd part. It claims it can nullify intellectual property rights and basically steal and pirate American IP in retaliation for the gambling ban. Well, no, it may not. The WTO does not authorize that form of retaliation, and it would be a violation of international law.
The real purpose of GATT/WTO is to contain this dispute to the affected parties. Whether or not it resolves it fairly is irrelevant.