US Faces $100 Billion Fine For Web Gambling Ban

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."

Good!

[KingSkippus]

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 As long as the US continues its patchwork enforcement of laws based on outdated concepts of how people should and shouldn't live, we deserve to pay what amounts to a $100 billion annual Stupid Tax.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:

[jedidiah]

What can or can't be done within the borders of a particular
jurisdiction is up to that jurisdiction to decide.

If someone in another country doesn't like that then tough titties.
It doesn't matter if the complaining part is us or some other country.
The fact that the US likes to butt in (and often does successfully) should
not be used as an excuse to expand this sort of stupitity.

So you think that US gambling laws are by

Re:Good!

[the_lesser_gatsby]

That's fine, leave the WTO then. But while you're in it, take some responsibility for the things you've signed-up for.

Re:Good!

[Ngwenya]

I think it's high time we started shipping opium back to China.

Did the USA do this as well? I thought it was just the Brits. Oddly enough, the whole opium war was derived from restrictive trade practices from China. We (the Brits) wanted their tea, they would only accept silver as payment, so we sold opium to the population and would only accept silver as payment, that we then used to buy their tea.

Of course, then we just stole the tea and planted it in India anyway. I guess that would be an IP violation in today's world.

In the history of not-our-finest-hours, this episode was a real bitch.

--Ng

Re:

[nutshell42]

In the history of not-our-finest-hours, this episode was a real bitch.

Honestly, I don't think it would make the top 10 of not-our-finest-hours. The opium addicts weren't really the problem but the government's attempt to stop the opium trade brought down the Chinese bureaucracy.

Now don't get me wrong, the imperial government was right in trying to stop it but it made apparent the rampant corruption, cliques and incompetence that had infested the Chinese bureaucracy over the centuries since the Manchu too

Re:Good!

[CountBrass]

You miss the point. The issue is that the USA discriminates between internal and external "suppliers" of gambling. if gambling were illegal in the US then there wouldnt be a problem with banning foreign gambling "suppliers" from "trading".

Re:Good!

[Da_Weasel]

I don't know a lot about the WTO or international trade agreements, but it seems to me that if the US has a regulated industry, such as gambling, then they can ban international gambling organizations on the grounds that the US has no jurisdiction over them and thus can not control gambling practices of outside gambling organizations to bring them inline with internal laws in the way that it controls internal gambling organizations.

Is my logic flawed here?

Re:Good!

[Volante3192]

Because gambling is LEGAL in the US.

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.

Re:

[cayenne8]

"Because gambling is LEGAL in the US.

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.)"

First, let me say, I think it should be legal...what a person wants to do with their money is their own right. However, let me see if I can correct some of your statement. Gambling is legal in SOME state

Re:Good!

[rking]

Gambling is legal in SOME states in the US, not every state. Each state has its right to decide what is and is not legal with regard to this. It is a bit different in the US from other countries in that (although erroding) we are a union of independent states...and each state is mostly free to make its own rules.

That's nice but the rest of the world doesn't care about the US's internal divisions.

If the US federal government doesn't have authority to enter into trade treaties then it needs to stop pretending that it can. If every state needs to negotiate separately then do it that way. If the US needs to set up a new body that can negotiate on behalf of every state then do that.

Every other country in the world is just as capable of saying "Oh yeah, that Berne convention, well you see different rules apply in that province over there, because they just do, yeah we didn't mention that when we signed the treaty." But if we want international agreements to be possible then we have to not do that.

I think that the problem is:

[avronius]

I think that the problem that the WTO has is that the US allows US vendors to sell gambling activities to people who do not live in the US.

The do NOT allow US citizens to purchase gambling activities outside of the US.

The US believes something similar to:
If you sell a product to your neighbour - this is ok.
If your neighbour sells you the same product, this is illegal.

But, I may be over-simplifying.

Re:Good!

[__aajwxe560]

Do you really think the WTO was created to prevent "blatent hypocrisy"? Try reading "The Sorrow of Empire" by Chalmers Johnson, and you will find facts presented that the purpose of the WTO is to actually maintain trade imbalance in favor of the few dominant economic powers of the world. I will grant you that Third World countries and others were induced to join under such a notion, but do you really think the US is interested in fair trade with other countries over its own self interests? The actions of the US in this case are in fact consistent with that notion. Look at agricultural subsidies and how the WTO differentiates between the US, European countries, and countries in South America or Africa. Hint: Existing subsidies were grandfathered over in a clever loophole to allow for the US and Europe to flood third world countries with their agricultural exports at a cheaper, subsidized price, thus giving third world countries one less way to try and gain their own economic independence. Third world countries that try to do this in return face sanctions from the WTO.

Re:

[DeepZenPill]

It should be noted that fair trade is a marketing term unassociated with free trade. They're actually often notions that are in opposition to each other, while advocates for freer trade claim that free trade is inherently fair and "fair trade" less so.

The WTO was indeed created in the interest of rich nations, but that's not to say it isn't also in the interest of poorer nations. Barriers to trade are almost always harmful to all parties involved because they inhibit the most efficient use of resources.

There's a bigger thing here people are missing

[Solandri]

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.

There's som

Re:

[Volante3192]

Gambling is NOT legal in most of the US, unless one counts the stock market.

Or state lotteries. Or on Indian reservations.

Re:Good!

[bentcd]

So you think that US gambling laws are byzantine and contradictory? Fine, take it up with your local state or federal senator. The WTO has NO PLACE WHATSOEVER in this issue. It's simply trying to override the sovereignty of an independent state/nation.

When the WTO is trying to override US sovereignty, it is only after the sovereign US said to the WTO "yeah, sure, we'll let you override our sovereignty, no problem" and signed papers to that effect.

You are only as sovereign as your leaders permit you to be.

Re:Good!

[srleffler]

Not at all. The US signed a treaty with other nations, and they expect the US to hold up its end of the bargain. Demanding that a country live up to the agreements it signed is not "overriding its sovereignity".

Re:Good!

[terrymr]

Huh ?

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.

It's a bit more nuanced than that

[jlowery]

With the implied limitation treaties do not override the Constitution.

from Wikipedia [wikipedia.org]:

Domestic vs. international law

The United States takes a different view concerning the relationship between international and domestic law from many other nations, particularly European ones. Unlike nations that view international agreements as always superseding domestic law, the American view is that international agreements become part of the body of U.S. federal law. As a result, Congress can modify or repeal treaties by subsequent legislative action, even if this amounts to a violation of the treaty under international law. The most recent changes will be enforced by U.S. courts entirely independent of whether the international community still considers the old treaty obligations binding upon the U.S. Additionally, an international agreement that is inconsistent with the U.S. Constitution is void under domestic U.S. law, the same as any other federal law in conflict with the Constitution, and the Supreme Court could rule a treaty provision to be unconstitutional and void under domestic law although it has never done so. The constitutional constraints are stronger in the case of CEA and executive agreements, which cannot override the laws of state governments.

The U.S. is not a party to the Vienna Convention. However, the State Department has taken the position that it is still binding, in that the Convention represents established customary law. The U.S. habitually includes in treaty negotiations the reservation that it will assume no obligations that are in violation of the U.S. Constitution a position mandated by the Supreme Court's 1957 ruling in Reid v. Covert. However, the Vienna Convention provides that states are not excused from their treaty obligations on the grounds that they violate the state's constitution, unless the violation is manifestly obvious at the time of contracting the treaty. So for instance, if the US Supreme Court found that a treaty violated the US constitution, it would no longer be binding on the US under US law; but it would still be binding on the US under international law, unless its unconstitutionality was manifestly obvious to the other states at the time the treaty was contracted. It has also been argued by the foreign governments (especially European) and by international human rights advocates that many of these US reservations are both so vague and broad as to be invalid. They also are invalid as being in violation of the Vienna Convention provisions referenced earlier.

Re:

[MightyMartian]

Perhaps you've heard of these things called "treaties". They're these legal documents, negotiated between sovereign states, ratified by said states and enforced by legislation within those states. The purpose of this thing called a "treaty" is to limit or enforce actions negotiated between sovereign states.

The United States is a signatory of the WTO, and is therefore bound by both international and domestic law to abide by.

Re:

[Tridus]

Remember, countries are expected to honor signed agreements. Unless they're no longer convenient to the US, of course.

Say, how's that effort to impose DMCA style laws on the rest of the world going?

Re:Good!

[timeOday]

This is just confirmation that the WTO is a meaningless cabal of mindless USA bashers with an axe to grind.

Oh brother. Like the UN, the WTO is not some bureaucracy from outer space invading our sovereignty. We, more than any other single nation, created it. 95% of the time we use these organizations to hit other nations over the head and goad them into enforcing the intellectual property laws we want, accepting our exports, etc. Then once in a blue moon the tables are turned and certain people such as yourself go berzerk.

Re:Good!

[Xonstantine]

The WTO has NO PLACE WHATSOEVER in this issue. It's simply trying to override the sovereignty of an independent state/nation.

No, the WTO is trying to arbitrate a trade dispute between member states. I'm not a big fan of some of the agreements and organizations the US has signed on to (ie, NAFTA), but the WTO is in the right here. It there was a universal ban on gambling, there would be no issue, but this is no different than say, Japan allowing the Japanese to buy only Japanese cars, and banning the import or purchase of American cars, while at the same time heavily advertising Japanese imports to America. Americans would have the right to be upset. The gambling market is a market just like any other.

Re:

[smurfsurf]

> No, the WTO is trying to arbitrate a trade dispute between member states.

I expect them to bring in Quai-Gon Gin and Obi-Wan to settle the dispute any time now ;-)

Re:

[terrymr]

What can or can't be done within the borders of a particular jurisdiction is up to that jurisdiction to decide.

Fine and if that were our argument it would have worked. The problem is THIS [youbet.com]

Re:

[Waffle Iron]

What can or can't be done within the borders of a particular jurisdiction is up to that jurisdiction to decide.

That's right. And by the act of entering into this treaty, the United States exercised its jurisdiction over its own federal laws, altering them so that they specify compliance with the WTO requirements.

The WTO has NO PLACE WHATSOEVER in this issue. It's simply trying to override the sovereignty of an independent state/nation.

That's perfectly within their rights, given that we signed away ou

Re:Good!

[Maxo-Texas]

As an American,

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.

Re:Good!

[tinkerghost]

What can or can't be done within the borders of a particular jurisdiction is up to that jurisdiction to decide.

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 WTO has NO PLACE WHATSOEVER in this issue.

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.

This is just confirmation that the WTO is a meaningless cabal of mindless USA bashers with an axe to grind.

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.

Re:

[plague3106]

You're right, except that we joined the WTO and entered into a contract, which DOES give the WTO a place in all of this. Unless you think we should just abandon the idea of contracts all together.

OH, and we're the biggest pushers of the WTO there is. May want to re-examine some of your facts..

State Right

[gerf]

IANAL.. The thing is, the power to regulate gambling is a State right. Thus, Nevada allows it.

If the Federal Gov't is even allowed to legislate it (i.e. sign a treaty about it) is to me, questionable.

Re:

[Ngwenya]

Now that's an interesting point. Since only the government of the USA can represent the states in international relations, it may well be that the USA has signed up for a treaty obligation for which it has not been granted specific power. In the old days where the gambling had to be physically located in a geographical location, this was easy to enforce. Now we have the situation where gambling crosses physical boundaries (falling within the purview of the federal government), but the power to regulate it r

Re:State Right

[TexVex]

If the Federal Gov't is even allowed to legislate it (i.e. sign a treaty about it) is to me, questionable.

They are not:

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

The Constitution does not allow the Federal Government to control the legality of gambling. That's a power reserved by the states. But that doesn't stop them; they just try to use their power to regulate interstate and international commerce.

The Wire Act of 1961 made it illegal to place an interstate or international wager:

Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both.

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:

(a) FINDINGS.
Congress finds the following:
(1) Internet gambling is primarily funded through personal use of payment system instruments, credit cards, and wire transfers.
(2) The National Gambling Impact Study Commission in 1999 recommended the passage of legislation to prohibit wire transfers to Internet gambling sites or the banks which represent such sites.
(3) Internet gambling is a growing cause of debt collection problems for insured depository institutions and the consumer credit industry.
(4) New mechanisms for enforcing gambling laws on the Internet are necessary because traditional law enforcement mechanisms are often inadequate for enforcing gambling prohibitions or regulations on the Internet, especially where such gambling crosses State or national borders.
(b) RULE OF CONSTRUCTION.
NO provision of this subchapter shall be construed as altering, limiting, or extending any Federal or State law or Tribal-State compact prohibiting, permitting, or regulating gambling within the United States.

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.

Re:

[JordanL]

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

The Constitution does not allow the Federal Government to control the legality of gambling. That's a power reserved by the states. But that doesn't stop them; they just try to use their power to regulate interstate and international commerce.

The 10th Amendment died it's last gasping breath in Roe vs. Wade, and that has nothing to do with the ar

Re:

[Scrameustache]

Basically, our goddamned government insists on sticking its nose in a place where it doesn't belong.

Yeah, about that, if you could, like, stop? We'd really appreciate it.

signed
-The World

Re:

[mikael]

Same in Europe - everyone argues about whether Internet gambling should be allowed/licensed/banned, but the reality is that there are already satellite channels that take bets for games like Roulette, and virtual horse-racing.

Re:

[rbanffy]

"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 never thought about it in that way, but such sanctions go a long way towards the goal of making stupidity painful.

The WTO folks deserve some recognition for that.

Re:

[jedidiah]

Gambling laws are inherently contradictory anyways and always have been. ANY general purpose cross-border gambling operation is bound to run afoul of local laws. This really is old news and stuff like this has been happening since the BBS days.

Re:

[Maxo-Texas]

I am supporting Ron Paul.

Out of ALL the candidates (democratic and republican) he is the only one saying what he honestly believes. I do NOT agree with all his positions- but at least I know what his positions are. All the other candidates are lying constantly about their real beliefs to get elected and (just like Mr. Bush) we will find out what they really believe after they get in office. I voted against the Bush the candidate (mr small government, anti-abortion guy) and i would definately vote against

Who wants to bet?

[140Mandak262Jamuna]

US Congress in the pocket of US gaming industry association. The WTO is in the pocket of International gaming association. Good fight. Promises great action. Wanna bet who is going to win?

Re:Who wants to bet?

[king-manic]

US Congress in the pocket of US gaming industry association. The WTO is in the pocket of International gaming association. Good fight. Promises great action. Wanna bet who is going to win?

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.

Re:Who wants to bet?

[rs79]

*cough*softwood*cough*salmon.

Even with a WTO judgement the US still wouldn't pay up. When they elected Vice President Harper here he cut his buddy Bush a deal and accepted ten cents on the dollar instead which the people who actually lost that money were more than a little pissed about.

Re:

[Joe The Dragon]

The US gaming industry wants to have there own on line gambling sties

Re:

[GuyinVA]

I'd like to take that bet...


oh no, wait... I can't.

Re:

[cens0r]

Gambling is not necessarily a losing proposition. Some games the house always has an advantage (black jack, roulette, etc), but those aren't the only gambling games out there. In poker for instance, you aren't playing against the house. You are playing against other players. Sure, most of them lose, but some players are winners. It's not that hard to be a winning player at small stakes. Sports gambling is another area where you can consistently win. The house makes money on the vig. All the care abo

Re:

[cens0r]

I'd be willing to wager that at any major poker site the rules of the game and the honesty of the house is greater than at a brick and mortar shop. A site like Full Tilt Poker has hundreds of thousands of players. A very high percentage of those players are using Poker Tracker to log all their hands. That gives millions of hands to analyze. If something is off, it will be caught quickly. And the sites have too much at stake to run a crooked game. They make enough just from the rake.

I'd guess you ha

Let me be the first to say

[johncadengo]

The U.S. ain't goin to pay.

Re:

[EveryNickIsTaken]

Agreed. I'm actually expecting a "Suck my balls!" kind of statement to be made by someone in the administration.

Re:Let me be the first to say

[DaleGlass]

This is the WTO we're talking about.

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.

Re:

[jedidiah]

Gambling is too much of a moral sacred cow in the US. Any US
politician would be committing political suicide by giving into
this crap. All of those red states in the middle of the country
would have a field day with anyone that yielded to the WTO
on this.

Re:Let me be the first to say

[click2005]

The Antiguans have formally requested to be allowed to suspend their obligations to the US. If this is granted, they could threaten to sell cheap DVDs & Microsoft software to recover the money. I doubt they would do that, but its more likely a threat to get them to pay.

Re:

[Billosaur]

We couldn't even if we wanted... that kind of money is tied up in other things... Of course, we could print some of these [boingboing.net] and pay it off.

Re:

[Life2Short]

I think Dennis Leary said it best:

Two words: Nuclear F**kin' Weapons
Okay!?
Russia, Germany, Romania - they can have all the Democracy they want.
They can have a big Democracy cake walk right through the middle of Tienamen Square and it won't make a lick of difference because we got the bombs.
Okay!?
John Wayne's not dead
He's frozen...

Let's make a deal.

[WK2]

Can we just apologize for banning online gambling, and promise to put it back? I would be happy to do that.

Obligatory Family Guy Quote

[locokamil]

WTO 1: Gentlemen, I propose we send a message to the US by fining them infinity billion dollars!
WTO 2: That's the spirit, Bob! But I think a real number might be more effective.

Hmmmm....

[CodeShark]

Ever wonder why the US is or at least used to be so very careful about treaties and treaty obligations? Here's a great example.

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....

[787style]

Quit letting the government be my parent! There were plenty of legitimate casino and poker room organizations that were negatively affected by this. Party Poker, a public traded company lost billions in market value literally overnight when the U.S. passed this law banning the funding of online gambling accounts. While there are a few shady operatives out there, the gambling industry as a whole self monitors it self rather well. There are enough people out there monitoring the payout amounts of each site trying to squeeze the maximum EV out of there bets that shady operators are weeed out through supply and demand.

Congress wasn't trying to protect it's citizens. It was trying to protect domestic corporations and tax revenue.

Re:Hmmmm....

[Anonymous Coward]

Er, no.

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.

Re:

[787style]

No, we prohibit gambling based on economic grounds, not religious. The lobbying organizations were not religious in nature, they were corporate. Notice the loopholes for horse racing and state lotteries.

Re:

[jedidiah]

No. Even where gambling is permitted pervasively (namely Nevada) there
are pretty draconian regulations intended to make sure that no funny
business is going on. You are not allowed to hire or deal with certain
people and games of chance actually need to be games of chance.

Those big corporate "100Billion dollar land based casinos" can lose
their ability to do business by having the wrong people in their
establishment. Some of the more interesting data mining technology
currently in existence is driven by this pro

Re:

[king-manic]

Ever wonder why the US is or at least used to be so very careful about treaties and treaty obligations? Here's a great example.

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 righ

Re:

[TopShelf]

This doesn't have anything to do with the US trying to hold offshore gambling companies to the same high standards that US casinos obey. It's more about the current US government trying to ban internet gambling, period, an incredibly stupid move that shuts the US out of one of the more dynamic, growing industries worldwide. By engaging actively, the US could actually develop a decent export industry (attracting foreign gamblers to US online casinos) out of it and help with our overall balance of trade, bu

Re:

[sholden]

Of course they could also have just setup a licensing system for online casinos in the US, so that US gamblers would play there - and the US would get it's tax revenue.

But of course the existing casino's would then be annoyed and they made all those donations...

Re:Hmmmm....

[nacturation]

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.

By that logic, do you think that the US should ban products coming from China since unscrupulous manufacturing operations are not subject to the same kinds of labor standards that employers in the US must meet? That way, at least you knew you'd be buying from honest, reputable Hecho-in-Americano companies whether you shop at Walmart or not.
 

Re:

[king-manic]

By that logic, do you think that the US should ban products coming from China since unscrupulous manufacturing operations are not subject to the same kinds of labor standards that employers in the US must meet? That way, at least you knew you'd be buying from honest, reputable Hecho-in-Americano companies whether you shop at Walmart or not.

The US no longer has the manufacturing capacity to pick up the slack. If they banned all Chinese products today, there would be another great depression as the cost for everything goes up and inflation hits double maybe triple digits. China may also then cash in their US debt they have been buying making it worse.

Re:Hmmmm....

[140Mandak262Jamuna]

China may also then cash in their US debt they have been buying making it worse.

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.

Re:Hmmmm....

[king-manic]

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.

Well the massive strategic blundering of the Germans combined with the huge body count Russia absorbed and inflicted likely won the war. The American guns, tanks, and money supplied to the Russians helped. But it would have been a far closer shave if Germany stayed out of Russia, and Russia didn't threaten Germany so much.

Re:

[Maximum Prophet]

Close shave? At the end of WWII, Germany was spending around 50% of it's GDP on the war effort. The US was in the tens of percent. (something like 12% IIRC)

During the cold war, the US was spending 6%, and we thought the Soviets were spending 12%. Turns out they were spending 25%, and they went bankrupt.

The numbers were similar for the War of Northern Aggression. (US Civil War)

The lesson is not to go to war with a country that can build more guns and bombs than you. When you add nukes, war becom

Re:

[Frangible]

What? The US didn't do shit to Germany. By the time we got there (on the wrong beach, no less), we fought boys below normal recruitment age and reserve troops in France, most of which were conscripts and weren't even members of the Nazi party. Russia manufactured its own T34 tanks, which were far superior to ours, it had nothing to do with us other than some Americans helped designed them, but it was not an official effort, no more than IBM's automation of the holocaust. Sorry but no, Rosie the riveter

Re:Hmmmm....

[tjstork]

In the next Sino-US war, just see who has the industrial capacity to out produce weapons to foresee the winner.

The USA produces more manufactured goods than it ever has in its history. Automation has had more of an impact on the demise of manufacturing jobs as has free trade.

Re:Hmmmm....

[CodeShark]

Actually having been to the PRC I do think that the US should ban a hell of a lot of imports from China, using the same anti-sweatshop regulations that worked on US companies that do import business in the Philippines, etc. have had to comply with. The fact is, the Chinese military is so entrenched in many areas out of the sight of western eyse that many of the so called "made in China" items are basically produced by slave labor, which in my mind would be no better than it would have been to buy "made in Germany" items when the Nazi party was in control.

I'm not a Bush fan much at all, but I do think he got it right when he said essentially that respect for human rights are a fundamental aspect of freedom, and that U.S. policy needs to be dictated thereby. Trouble is, I don't think that the US or other corporations are interested in human rights -- they'd rather have economic slavery and virtual indentured servitude instead.

Re:

[Dunbal]

IANAL however my understanding is that international law and treaties trumps domestic laws every time. Congress had no business passing a law that went against an international treaty. The US first should have withdrawn from the WTO. You can't have it both ways. However the American attitude is the usual "who is going to stop us" that has been prevalent since the '90s.

The Romans thought the same, once upon a time. Keep building up that animosity, America.

Re:

[terrymr]

ANAL however my understanding is that international law and treaties trumps domestic laws every time.

Correct - the US constitution even spells that out.

The US was quite happy to use the WTO...

[aepervius]

...in the past when the situation was reversed. So... You can't sell your bread and eat it at the same time.

Re:Hmmmm....

[DarenN]

You don't appear to understand the nature of the dispute. The gambling laws in Antigua (and in most of Europe) are pretty strict, and would conform to or exceed any similar laws on the American books. If the laws to protect gamblers in a country aren't strict enough for the States, I'm pretty sure that they can make an issue out of that (this is an area I'm not too clear on. Feel free to correct).

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.

Re:

[DarenN]

No. The US allows gambling on a state by state and city by city basis.
This isn't Germany. All 50 states set their own standards.

Yes, I am aware of that. It's why there can be gambling in Nevada but not in Washington. The problem is that interstate online gambling IS allowed, for instance for horseracing.

Interstate online "commerce" has been running afoul of local laws for 20 years.

That's an internal American disagreement and not our problem. Congress ratified the GATS. On the international stage, the states have agreed to let the federal government represent them, so the treaty is binding. If a state does not allow gambling, that's up to them. But some states do, and some online gambling crosses state lines,

Re:

[lightversusdark]

LOL
I think that you should be careful about posting this sort of thing - in case people believe that it is in any way representative of the facts.
I'd rather post than mod you Troll or Funny, because your sentiments are not a million miles away from those being pushed by US popular media, and there is a real danger will people begin to think they are true unless nipped in the bud.

To be clear: the concept of World Trade is not compatible with protectionism.
The US has taken their ball home - not liking the im

The law was shoved through by Bill Frist

[PotatoHead]

and it was all about tossing a bone to the religious right.

Now that political move is coming back to bite them. Lots of solutions were on the table to mitigate the problem.

It's all about the cost of legislating morality.

Re:

[orasio]

Ever wonder why the US is or at least used to be so very careful about treaties and treaty obligations? Here's a great example.

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.

You are missing the big picture.
The idea of making a treaty is that all part respect it.
If you are not going to respect it , you should not sign it.
Those treaties are pillars of the US economy. The money comes from the outside, and mostly due to regulated trade, like copyrighted, or patent protected stuff.

Treaties have the issue that you have to give something in order to take what if offered.

Of course the US could try protecting their economy only through military force, and not treaties, but it's not a s

Re:

[illegalcortex]

Perhaps I should have said unregulated instead of unscrupulous.

If this were the case, they would have provided a regulatory framework. There were plenty of firms that would have loved to have signed up. You don't have to cheat to make a lot of money as a gambling company.

I heard some of the congressional debate on this. Lot's of senators/reps going on and on about how internet gambling is way more addictive and people lose their house/job/family because it's so accessible. There may have been a lot of b

Ten bucks says...

[mdobossy]

... Ten bucks says, the US gov never pays up.

Re:Ten bucks says...

[Dunbal]

For $100Bn, it would probably be cheaper to "bring democracy to" Antigua. They should be careful what they wish for, soon those foreign online gambling organizations will find themselves with links to Al Qaeda they never knew they had. I also hear they are seeking to build nuclear weapons.

In before "troll" mod.

Re:

[DragonWriter]

For $100Bn, it would probably be cheaper to "bring democracy to" Antigua.

And the other 150 WTO members that would be making claims? Including China?

How much has the US spent failing to "bring democracy" to Iraq?

My mother was a fifteen year old French prostitute

[RockMFR]

They were originally going to fine the US $1 million, but were informed that this was not much money at all.

And

[Archades54]

Who enforces this fine?

Re:And

[bentcd]

Who enforces this fine?

As I understand it, WTO sanctions can typically be enforced by member nations putting in place tariffs on goods imported from the sanctioned member. That is, Belgium might demand a 50% additional tariff on foodstuffs imported from the US in order to fill up "its" part of the fine. (I have no idea if Belgium is involved or not.)

Looking at the whole picture

[mangu]

I've never understood the logic of imposing tariffs to punish the other country - you are only punishing your own citizens by denying them access to cheap goods

The money raised by the tariffs will go to the government's treasury, which means other taxes could be lowered. You aren't denying access to cheap goods, you change relative prices.

In this hypothetical example, Belgians would pay higher prices for beer imported from the US, but at the same time they could pay lower prices for beer made in Belgium. P

Re:

[mangu]

Who enforces this fine?

All the affected countries. It's done the same way that other international trade disputes are solved: countries start putting extra import duties on products exported from the USA, the final result will be increased unemployment in the US.

If I were a betting man...

[bennomatic]

...I'd say that any members of the WTO who file suit will be identified as enemy combatants and wind up in Gitmo.

The world couldn't stop the US from invading Iraq based on non-existent WMD; who thinks that the US gov't would pay any foreign-levied fine of $100B?

In related news...

[Cleon]

The Poker Player's Alliance is encouraging people to fly to Washington DC for two days [pokerplayersalliance.org] later this month to lobby congresscritters for legal online poker.

I dunno if the WTO's statement will help or hurt this effort, to be honest. There might be a backlash.

Odds?

[moehoward]

I bet you a million dollars that they'll never see a dime of that money.

You can pay me when we meet at the river boat gambling joint. I'll be there after I pick up some lottery tickets on my way back from the horse racing track.

Take a number.

[PhxBlue]

We'll just add that $100 billion to the national debt. The check's in the mail ... really!

From the other side of the fence

[WibbleOnMars]

The thing is here that the US has been very very aggressive in enforcing WTO rules when they're in its favour. It's all very well saying how terrible the WTO is in this case, but trust me, the rest of the world has been saying pretty much the same thing every time a ruling goes the other way, and the US wins fair trade in something somewhere. The fact here is that the US allows online gambling. But only if the gambling company is based in the US. The justification given is that gaming companies outside the US aren't regulated, but this is a false argument: external companies could easily be required to conform to US regulations when they operate in the US, but the US has chosen to ban them entirely. This is against the rules. Every other country in the world that allows online gambling is forced to allow US online gambling companies to operate in their country. Why should the US be any different? To put it another way, let's apply it to another industry.... let's say.... selling software online. And put the same conditions in place: Now US-based software companies are free to sell in the US, provided they conform to US law, but offshore all software companies are banned from selling in the US, on the grounds that they might not conform to US law. I work for a software house based outside the US that sells software to US-based firms. If we were banned from operating in the US, while our US-based competitors were allowed to operate there, as well as compete with us in our own country, we would be justifiably upset. This is the position that offshore gambling companies are in now. They're happy to comply with US regulation, but that just isn't enough; the US won't allow them to operate. The point is that for fair trade, the same rules must be applied to onshore and offshore companies. If the US did this, there would be no suit.

Sounds like...

[HangingChad]

Sounds like someone needs a little dose of American style freedom and democracy! Bomb them back into the stone age and then monitor all their phone calls.

This is a job for Decider Man!

Better Hurry!

[DukeLinux]

They better hurry while the U.S. Dollar still has any value left. Maybe we can use gambling proceeds to pay for it......

Time to bomb Antigua then.

[tjstork]

Gambling is an immoral tax, and for the WTO to try and enforce that on America's poor constitutes an attempted invasion by the people of Antigua. I think we should bomb every nation that hosts offshore gambling. There's really no other way, at this point, to protect Americans from sinners around the world.

Learning comprehension is a skill

[the computer guy nex]

Internet gambling has not been banned in the United States.

I repeat, Internet gambling has not been banned in the United States.

It is illegal to transfer money to a gambling site. There is a fundamental difference. In this case, United States Citizens are in effect throwing away money to Foreign sources. I'm a conservative, so I'm against the Democratic socialist view of "tax everything", but in this case the US government should be seeing something back.

Re:So tell me...

[shawnmchorse]

It's because we didn't actually ban gambling. If the U.S. had just banned all forms of gambling, that would have been fine and the WTO would have accepted that with no problems. But instead, we banned only certain specific forms of gambling (e.g. Internet poker and casino games) while specifically allowing others (e.g. brick and mortar casinos, horse and dog racing, fantasy sports betting) and even protecting some as a governmental monopoly (state lotteries). It's the U.S.'s schizophrenic way of simultaneously banning and allowing gambling that's had the Antigua and the WTO complaining for so long.

Re:So tell me...

[Daniel_Staal]

China bans it internally as well as externally. Same with Germany: It doesn't matter if you are German citizen or not in that example.

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.

The WTO needs no army...

[mangu]

the WTO has no army or ability to enforce its rulings

Would you like to see about 194,000 examples [google.com] of the true power of the WTO?

Re:

[moehoward]

I think you would not disagree that gambling is a form of trade.

We allow gambling. Like, a whole lot of it too. Some states allow Internet gambling.

The government can't figure out how to make money off of Internet gambling, so under immense pressure from the gambling industry, they banned certain types of Internet gambling. This is a very clear violation of certain treaties that we have signed. So, we need to be punished. It is a pretty big no-brainer. If you don't like it, then withdraw from the WTO and un