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ST JOHN’S, Antigua: A decision in the long drawn-out gaming dispute between Antigua and the United States may be announced soon.

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Will international pressure from the formidable, 27-nation European Union finally push the United States into legalizing Web bookies and online casinos?

Maybe. And maybe sooner than later.

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Just one week away from a scheduled meeting with the European Union about current online gaming regulations, the U.S. has postponed the trade talks. The EU requested the meetings because they feel the Unlawful Internet Gambling Enforcement Act (UIGEA) is in violation of a treaty laid out by the World Trade Organization (WTO).

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Deputy United States Trade Representative (USTR) Ambassador John Veroneau is expected to arrive in Antigua and Barbuda today to begin high-level talks with Minister of Finance and the Economy, Dr. Errol Cort, on the longstanding trade battle between the two countries over internet gambling.

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A trans-Atlantic spat over online gambling may help
rewrite the rules of the game for Internet commerce across borders. For
a change, the Europeans stand on the side of free trade, while America
dabbles in regulatory overreach.

The European Union last month launched an internal
probe into whether the U.S. Justice Department selectively enforces its
antigambling laws against European online firms that offer wagers on
sports events. Brussels is making a narrow legal point that Washington
discriminates against Europeans by simultaneously permitting U.S.
Internet horse betting. That’s against World Trade Organization rules,
and the case may end up there.

The U.S. last year lost a similar WTO online gambling
case against Antigua and Barbuda. The island nation argued that U.S.
online gambling rules violated Washington’s GATT commitments to open
its market in “recreational, cultural and sporting services.” The U.S.
countered that its policies were justified to protect public morals and
public order, a legitimate exception under WTO rules. But the WTO panel
ruled that America wasn’t applying its restrictions equally to
foreigners and domestic operators. U.S. online horse-betting sites
aren’t banned.

Washington could have stood down then. Instead, it is
“threatening and pressing criminal prosecutions, forfeitures and other
enforcement actions against foreign online gaming operators,” according
to the London-based Remote Gambling Association, which took the
complaint to the EU. In doing so, Washington is also practicing a form
of universal jurisdiction by applying domestic law to foreigners beyond
its borders – a legal interpretation that the U.S. has, rightly,
condemned in other cases.

In 2006, the former chairman of U.K.-based gambling
firm Sportingbet, Peter Dicks, was detained in New York. The Briton was
wanted in Louisiana on online gambling charges. Then-New York Governor
George Pataki declined to sign a warrant extraditing him, and he was
released. Many European industry executives now no longer stop over in
the U.S., let alone visit the country, for fear of arrest. “There is a
list of wanted people but nobody knows who’s on it,” said Clive
Hawswood of the Remote Gambling Association.

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The trade dispute between the United States and several countries in Europe, Asia and the Caribbean over Internet gambling has been embarrassing, expensive and now, according to the Office of the U.S. Trade Representative, a national security secret.

At least that’s what Ed Brayton, a freelance writer who opposes the government’s anti-gambling measures, found when he tried to get a copy of the agreement the United States has reached with the European Union, Japan and Canada on the issue. The accord spells out what trade concessions the United States is making to compensate those countries for U.S. laws and regulations that try to prevent Americans from wagering on foreign gambling Web sites. The latest law, enacted in 2006, prohibits U.S. banks and other financial institutions from processing any Internet gambling transactions.

Antigua and Barbuda, a former British colony in the Caribbean, touched off the dispute in 2003 when it brought a case to the World Trade Organization arguing that the United States’ efforts against gambling on foreign Web sites were an unfair trade practice because it exempted domestic horse racing Web sites. The WTO sided with the tiny Caribbean nation, which has yet to reach an agreement with the United States on compensation.

Other countries have, though, and Brayton filed a Freedom of Information Act request with the Office of the U.S. Trade Representative after the deal was announced in December. He says he just wanted to know precisely how much the United States was conceding in the December deal to maintain its gambling ban. The agency’s chief FOIA officer, Carmen Suro-Bredie, replied that the USTR was withholding the agreement because it was “classified in the interest of national security.”

In announcing the agreement with the EU, Japan and Canada, USTR spokeswoman Gretchen Hamel said it “involves commitments to maintain our liberalized markets for warehousing services, technical testing services, research and development services and postal services relating to outbound international letters.”

She did not respond to requests for more information about the deal.

Brayton says he’s planning to appeal the denial, which would force the trade office to explain why the agreement implicates national security. He says he suspects the agency may have something else in mind: hiding what could amount to billions of dollars in trade concessions.

“I can’t even imagine a reasonable explanation other than that in the furthest reaches of my imagination,” he says.