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US Faces $100 Billion Fine For Web Gambling Ban
Posted by
Zonk
on Fri Oct 12, 2007 11:21 AM
from the just-one-more-thing-we-can't-afford dept.
from the just-one-more-thing-we-can't-afford dept.
Stony Stevenson writes with the news that the World Trade Organization is seeking billions of dollars in compensation from the United States from their ban on internet gambling. The view of the WTO is that the US has reneged on commitments to the organization. "The disputed concessions arise from Antigua's victory earlier this year when the WTO ruled that the US violated its treaty obligations by excluding online Antiguan gaming operators, while allowing domestic operators to offer various forms of online gaming. Instead of complying with the ruling, the Bush administration withdrew the sizeable gambling industry from its free trade commitments. As a result, all 151 WTO members are considering seeking compensation for the withdrawal equal to the size of the entire US land-based and online gaming market, estimated at nearly US$100 billion."
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US Outlaws Online Gambling 579 comments
imaginaryelf writes, "As reported earlier on Slashdot, in the closing hours of the US Congressional session on Friday, September 29, the Unlawful Internet Gambling Enforcement Act of 2006 (H.R.4411.RH) was attached to the Safe Port Act of 2006 H.R.4954.EAS.
To the surprise of many, the bill passed both the House and the Senate, and Bush is expected to sign it into law this week. This effectively outlaws online gambling in the US, by way of making it illegal for credit-card companies to collect payments for bets. The financial markets punished the stock of online gambling companies as some prepared to pull out of the US entirely."
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Politics: Antigua May Be Allowed To Violate US Copyrights 482 comments
Skleed refers us to the NYTimes for an article on the high-stakes case the US is losing before the World Trade Organization. So far the US has lost an initial hearing and two appeals on its policies regarding Antiguan offshore gambling sites. Now the lawyer pressing the case has asked for a rarely invoked, but codified, recourse under WTO rules: letting Antiguans copy and distribute American music, movies, and software. The game may be to get Hollywood and Microsoft, et al., to pressure Washington to cut a deal. But their influence may not be sufficient to move lawmakers on the question of online gambling. From the article: "But not complying with the decision presents big problems of its own for Washington. That's because Mr. Mendel, who is claiming $3.4 billion in damages on behalf of Antigua, has asked the trade organization to grant a rare form of compensation if the American government refuses to accept the ruling: permission for Antiguans to violate intellectual property laws by allowing them to distribute copies of American music, movie and software products, among others."
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Good! (Score:5, Insightful)
Good!
Look, whether or not you agree with gambling, surely any reasonable person can see that the situation as it is now is simply untenable.
Gambling is allowed in some places (Las Vegas, Atlantic Ctiy, etc.) but not in others. Worse, in yet more places some forms of gambling is allowed (Bingo, horse racing, dog racing) but not others (blackjack, poker, etc.). Worst of all, in some places, such as the place where I happen to live, some gambling is allowed in the form of lotteries, but it is completely owned and run by the state government monopoly.
And to add to the madness, we now have laws on the book that say that online gambling is okay, but only on horse racing (thanks to a strong lobby) and within state lines?
I'm not averse to some sort of regulation to ensure that online casinos aren't cheating, but this sham of acting like gambling is an issue of morality so that government can use it as an excuse for avoiding competition is ridiculous. As long as the US continues its patchwork enforcement of laws based on outdated concepts of how people should and shouldn't live, we deserve to pay what amounts to a $100 billion annual Stupid Tax.
I still think that they ought to be allowed to violate US copyrights [slashdot.org] as an appropriate punishment. When the government (i.e. you and I, incidentally) is paying the $100 billion, people won't really care. But if corporate America starts losing money, I think you'll start seeing some rather dramatic changes very quickly.
Re:Good! (Score:5, Insightful)
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Re:Good! (Score:5, Insightful)
What the US is saying is it's legal for its citizens to gamble in places hosted inside the country, but illegal outside the country in places we have an otherwise unfettered trade relationship with. (i.e., if the place was hosted in Cuba, it'd be illegal regardless.)
This is different than cocaine because cocaine is an illegal substance throughout the US, imports and domestic distribution is prohibited, period.
It's blatent hypocrisy and the exact sort of thing the WTO was created to prevent.
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Re:Good! (Score:5, Insightful)
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Re:Good! (Score:5, Informative)
The WTO isn't trying to override anything - we're simply being asked to honor a commitment made under a treaty which we negotiated. Other nations that didn't want to allow cross border trade in gambling opted out of those provisions, the United States did not. The US has repeatedly argued that it was a mistake the WTO panels have ruled that the record of the treaty negotiation shows that is not the case and the US freely made the commitment. Don't tell me the government didn't have a lawyer read it before they signed.
For further clarification, the US Constitution makes it clear that international treaties ratified by congress become the law of the United States.
As for the meaningless cabal of US bashers - get a grip. We are the WTO. Without our commitment to abide by the treaties there will be no WTO. I really hate the cranks that point to organizations that the US was a key player in founding claiming that they're anti US just because they may disagree once in a while. I'm surprised nobody is claiming the Internet is anti US too.
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Re:Good! (Score:5, Insightful)
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Re:Good! (Score:5, Insightful)
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Re:Good! (Score:5, Interesting)
The issue is that we do allow gambling. If it was entirely illegal, this would not be a trade issue. But by allowing gambling in certain protected areas, we are engaging in protectionism of the gambling industry from foreign competition.
We are saying "gambling from italy is illegal" but "gambling from vegas is legal".
Clearly, if a local jurisdiction wishes to prohibit gambling, they just need to put up a firewall around the internet to their jurisdiction.
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Re:Good! (Score:5, Insightful)
The US did decide, they decided to agree to an arrangement of mutual understanding & behaviors (the WTO treaty) - the principle one here is that what is legal to do inside the country is legal to do cross border. That means that if it's legal to do online gambling inside the US (which it is, online lottery sales are one example) then the US cannot bar foreign entities from engaging in the same business.
Note that the WTO does allow countries to bar practices which they find morally offensive, the sale of alcohol in Muslim countries is a good example. Places like Saudi Arabia bar all production & sales of alcohol for imbibing. Because they bar it internally, they are permitted to bar importing & sales of alcohol to SA companies & individuals.
The US does not bar online gambling - lottery & OTB being the 2 prime examples - and yet wants to bar international companies from participating in the business. That is in direct violation to the priciples of the WTO. So, if the US wants to bar foreign companies from participating in online gambling with US citizens, they can. They can either drop out of the WTO, or they can ban all internet gambling. What they can't do is continue to claim that the WTO treaties only apply to other countries.
The World Trade Organization does have a rather large place at this table. This is about international trade relations & the WTO treaties are the groundrules that the countries in question have already agreed to play by. If the US doesn't want to play by the rules that's fine. They don't have to. They can withdraw from the WTO at any time. But as long as they are members, they need to play by the rules of the game - that means upholding their end of the bargain not just using the treaties to get what they want & saying 'Fuck off' whenever anyone has a complaint.
Funny, the US loves to use the WTO treaties to extort concessions out of other countries. I guess your complaint is that sometimes the US looses & that makes the WTO anti-US. Get a life & perhaps actually look into the subject you're going to bitch about. The US pulled a bunch of dodgy stunts & got called on it. Rather than own up, they started blustering & complaining. The WTO called bullshit & this is the result. This isn't about bashing anyone, this is about holding people to their agreements. You say you'll paint my house if I fix your car, great, once your car is fixed you damned well better paint my house. If you don't, you should expect to see me in court.
Nobody forced the US to sign WTO treaties, but they did. Now that they have, they need to live up to them, or face the consequences. That's not bashing, that's accountability, something the US used to be adamant about.
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Re:State Right (Score:5, Informative)
The Wire Act of 1961 made it illegal to place an interstate or international wager: And more recently they passed the "Unlawful Internet Gambling Enforcement Act" as a rider to a must-pass spending bill, which makes financial institutions responsible for policing online wagering: The UIGEA is at the heart of the WTO dispute. The bill is intended to illegalize gambling, not by making gambling illegal (something they cannot do) but my making it illegal to transfer money to and from gambling sites and the banks they work with.
Basically, our goddamned government insists on sticking its nose in a place where it doesn't belong.
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Who wants to bet? (Score:5, Funny)
Re:Who wants to bet? (Score:5, Insightful)
The US views the WTO as a convenient hammer to get it's ways in certain situations and as a small nuisance when it rules against them. The US hardly ever listens. And generally is a asshole to it's friends and trading partners. Thankfully it's economic influence looks to be waning due to very poor economic management.
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Obligatory Family Guy Quote (Score:5, Funny)
WTO 2: That's the spirit, Bob! But I think a real number might be more effective.
Hmmmm.... (Score:5, Insightful)
Congress passes a law to protect US citizens from unscrupulous gambling operations that are not subject to the same kind of regulations that Casinos in the U.S. must meet -- and the world responds via the WTO by trying to extort $100 Billion dollars from the U.S. -- which means taking money from every citizen and company in the U.S. that pays taxes to support offshore companies right to not live up to regulations that make it more difficult to cheat the gamblers out of all their money -- and each of us will pay for that whether we as individuals or companies gamble or not.
Though not hopeful, I think the U.S. in this case should tell the WTO to go pound rocks.
Re:Hmmmm.... (Score:5, Insightful)
Congress wasn't trying to protect it's citizens. It was trying to protect domestic corporations and tax revenue.
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Re:Hmmmm.... (Score:5, Interesting)
Gaming in the UK is also heavily regulated to ensure people aren't cheated out of their money. So why were UK executives of a UK online betting company arrested by the US when their plane passed through a US dependency's airport?
The US prohibits gambling on religious grounds, not because of corruption worries.
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Re:Hmmmm.... (Score:5, Insightful)
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Re:Hmmmm.... (Score:5, Interesting)
That is not the big issue. They are holding our bonds, and we don't have the Gold standard. So we just print them as many dollars as we want and give it to them. They know it too. So they won't cash the bonds, but they might start a war.
In the last war, almost all historians agree, Germany was defeated mainly by the huge industrial output of USA. In the next Sino-US war, just see who has the industrial capacity to out produce weapons to foresee the winner.
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Re:Hmmmm.... (Score:5, Informative)
The problem is that the US allows online gambling internally, but won't allow the same thing from an external source. This is called protectionism and is a no-no under WTO rules. This is a particularly blatant example of it, too (usually it's done through subsidies or unreasonable import taxes so it's not so obvious - see sugar in Europe and wood in the US). Because it's so blatant, and because the US have been really aggressive about it (jailing people who run online gambling sites and requiring payment processors to not allow payments to online gambling firms) it has pissed a load of people off, because the US not only signed the GATS, but basically wrote it and pushed it hard. Suddenly don't like something about it and instead of trying to negotiate or giving in, they unilaterally withdrew an entire section of their economy from the treaty.
This allows all the other signatories with interests in that sector to claim damages ore recompense and if the US don't pay, the WTO can do things like suspend other countries intellectual property obligations to the US. Hint: how much of the US' current exports are IP and how's the trade balance.
The US will have to settle this, and being pig-headed won't be the long-term answer. Most likely, Bush is lining this up for the poor b*stards that are going to follow him giving the probability that the next administration will be democrat. Either that or he doesn't care.
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From the other side of the fence (Score:5, Informative)
Re:Ten bucks says... (Score:5, Funny)
In before "troll" mod.
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Re:Let me be the first to say (Score:5, Insightful)
I bet they could come up with a way of applying very considerable pressure. Especially as the rest of the world seems to be less and less happy with the US' position.
People said the EU couldn't fine Microsoft. Well, they did. Now they say the WTO can't fine the US. I'm pretty sure they'll find a way.
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Re:Let me be the first to say (Score:5, Informative)
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Re:So tell me... (Score:5, Interesting)
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Re:So tell me... (Score:5, Insightful)
The US in this case only bans it if you are not in the US. Which is exactly what the treaty the US signed with the WTO said we won't do. (Not just on gambling.) If the law applied equally to US and non-US gambling there would be no problem.
The WTO does not have a problem with any of their member nations banning something. It only has a problem when you try to shut other countries out of your markets intentionally, while keeping the local companies in them. This is the point of the WTO, and it benifits the US in many cases. It's why the USA pushed for the formation of the WTO, and for countries to sign the treaty the US violated.
The US is being stupid, and is going to pay for it. It is that simple. If the US wanted to ban online gambling, then it should ban online gambling, not just everyone else's online gambling.
Parent