Pirates of the Caribbean: gambling and free trade.

• Author: Balko, Radley
• Position: Citings - Unlawful Internet Gambling Enforcement Act of 2006 - Brief article

IN MARCH, for the third time in three years, the World Trade Organization (WTO) ruled against the United States in a gambling dispute with the nation of Antigua. A three-judge panel found that the recently enacted Unlawful Internet Gambling Enforcement Act runs afoul of global trade agreements because it exempts state lotteries, horse racing, and other domestic gambling interests while targeting offshore Internet gambling operations.

Antigua is home to many Web-based gambling companies that once did business with U.S. customers. If, as expected, the U.S. ignores the WTO ruling, international trade law permits Antigua to retaliate for the damage the law does to its economy. But a small country like Antigua doesn't have many retaliatory options. Any trade sanction or tariff on U.S. goods would hurt Antiguans far more than it would hurt American companies.

One possibility: Antiguan authorities say they may retaliate by ignoring U.S. copyright law, transforming the country into a haven for film, music, and software pirates...