US-Antigua Online Gambling Dispute Overview

Antigua and Barbuda 101

  • Ann-Teeg-Ah
  • Former English colony, independent since 1981
  • GDP Per Capita: $18,300
  • Economy: 60% Tourism
  • Size:  442.6 Sq. Kms
    (2 ½ times D.C.)
  • Population:  90,156
    (similar to Santa Monica)
  • Direct Flights from Miami, New York and Puerto Rico


Antigua Gambling Dispute Timeline

(1) Dawn of Online Gambling  (1994-1998); (2) Antiguan Boom (1999-2001); (3) Cohen Convicted (2002); (4) David v Goliath Part 1 (2003-2004); (5) David v Goliath Part 2 (2005); (6) David v Goliath Part 3 (2006-2007); (7) Same Old, Same Old (2008-2012); and (8) To the Brink (2013)

Dawn of Online Gambling

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  • Antigua begins offering licenses for interactive gaming and wagering companies.
  • Jay Cohen and Steve Schillinger launch World Sports Exchange in Antigua
  • By 1999, Schillinger told Reuters they were processing between $100-200 million in bets.
  • In 1998, US Attorney for Southern District of New York indicts Cohen and Schillinger for violating Wire Act.  Cohen returns to U.S. voluntarily to fight charges since his operations were legal in Antigua.

Antiguan Boom

  • Online gambling accounts for 10 percent of Antigua GDP
  • 119 licensed operators paying $7.4 million in licensing fees
  • 3,000 employees (approx. 10 percent of workforce)
  • 1999: 52% Global Market Share, $546M in Revenue
  • 2000: 61% Global Market Share, $1.7B in Revenue
  • 2001: 59% Global Market Share, $2.4B in Revenue
  • GDP growth every year 1996-2000



Cohen Convicted


  • Cohen becomes first U.S. citizen convicted for violating Wire Act for operating online gambling company from a jurisdiction where it was legal.  Conviction upheld by Second Circuit and denied review by Supreme Court.  Cohen begins serving 21-month sentence.

David v Goliath Part 1

  • Cohen’s lawyer convinces Antigua to commence World Trade Organization action against US with gambling industry funding.
  • Antigua complaint asserts that the United States’ total prohibition of cross-border gambling services offered by Antiguan operators such as the World Sports Exchange to consumers in the United States violates the United State’s obligations under the GATT.
    • WTO panel rules in favor of Antigua.
    • Cohen released from prison after 18-months.

David v  Goliath Part 2

  • US Appeals WTO Ruling
  • WTO Appellate Body rules that three federal laws which prohibited Antigua’s gambling services (i) the Wire Act of 1961, 18 U.S.C. §1084 (the “Wire Act”); (ii) the Travel Act, 18 U.S.C. §1952 (the “Travel Act”); and the Illegal Gambling Business Act, 18 U.S.C. §1955 (the “IGBA”) violate US market access obligations under the GATT.  It rejected a U.S. a “morals” defense since the U.S. permits online gambling for off-track betting but only for domestic companies.
  • U.S. given until April 2006 to comply.
  • Antigua’s counsel, Mark Mendel, reacted to the decision by stating that“The impartial dispute resolution machinery of the WTO has functioned as we had expected.  Justice has been served and potential compliance issues facing various US corporations and the US Department of Justice will now be resolved in a manner favorable to fair and responsible international commerce.”


David v Goliath Part 3

  • Antigua returns to WTO for relief due to U.S.’ failure to comply with decision and that Antigua was entitled to impose trade sanctions against the US.
  • Antigua awarded only $21 million a year in damages (had sought $3.4 billion).
  • Congress passes Unlawful Internet Gambling Enforcement Act (UIGEA) which prohibits processing payments for online gambling, effectively shutting down U.S. market for online gambling.
  • By 2007, Antigua share of global market is only 7 percent with 30 licensed firms employing 333 Antiguans.

Same Old Same Old

  • U.S. warns Antigua  not to implement the remedy but negotiations go nowhere and the issue seems to disappear.
  • Jay Cohen reveals he has returned to WSEX in violation of the terms of his parole.
  • The Justice Department shuts down offshore gambling sites PokerStars, Full Tilt Poker and Absolute Poker.
  • The Justice Department opens door to legal online intrastate gambling by permitting states to offer online lottery games.  Delaware becomes first state to authorize online gambling.

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To the Brink

  • Antigua requests for WTO authority to suspend obligations under Trade Related Intellectual Property Rights convention as to Copyrights, Trademarks, Industrial Designs, Patents and Protection of Undisclosed Information at a level not exceeding US $21.0 million annually is granted.
  • The US responded that “Government-authorized piracy would undermine chances for a settlement. It also would serve as a major impediment to foreign investment in the Antiguan economy, particularly in high-tech industries.
  • Meetings between Vice President Biden and Antigua Prime Minister Spencer raises hope of a final settlement of the dispute.
  • World Sports Exchange folds. Steve Schillinger is killed in apparent suicide.
  • Antigua announces the formation of a “WTO Remedies Implementation Committee” (the “RIC”), chaired by Antigua’s Attorney General Justin Simon.
  • Antigua’s RIC is said to be recommending the establishment of a statutory body to own, manage and operate the ultimate platform to be created for the monetization or other exploitation of the suspension of American intellectual property rights authorized earlier this year by the WTO. Necessary legislation to implement the remedies is in the final stages of preparation for submission to Parliament. An announcement regarding the opening of tenders for private sector participation in the operating of the platform should be announced shortly.
  • Prime Minister Spencer expressed disappointment with the United States over negotiations to resolve the dispute.  “In the face of the ongoing failure of the United States to negotiate with Antigua and Barbuda a reasonable settlement of this dispute, the implementation of trade remedies awarded by the WTO is an important international responsibility.”
  • Ambassador Colin Murdoch called Antigua’s November meetings in Washington “disappointing” and that ” the USTR proposals fell far short of what is required to settle this matter.  n failing to address key proposals that we have made, the USTR has put US intellectual property rights holders at risk.”  Ambassador Murdoch added that he was not optimistic that a solution would be reached “barring a considerable move by the US to the middle in its negotiating posture.”  No future meetings are likely.

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