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US Faces $100 Billion Fine For Web Gambling Ban

Posted by Zonk on 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."

18 of 522 comments (clear)

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 As long as the US continues its patchwork enforcement of laws based on outdated concepts of how people should and shouldn't live, we deserve to pay what amounts to a $100 billion annual Stupid Tax.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

    1. Re:Good! by the_lesser_gatsby · · Score: 5, Insightful

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

    2. Re:Good! by timeOday · · Score: 5, Insightful

      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.
    3. Re:Good! by Xonstantine · · Score: 4, Insightful

      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.
    4. Re:Good! by Volante3192 · · Score: 5, Insightful

      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.

    5. Re:Good! by tinkerghost · · Score: 5, Insightful

      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.

    6. Re:Good! by CountBrass · · Score: 5, Insightful

      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".

      --
      Bad analogies are like waxing a monkey with a rainbow.
    7. Re:Good! by srleffler · · Score: 5, Insightful

      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".

    8. Re:Good! by __aajwxe560 · · Score: 4, Insightful

      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.

    9. Re:Good! by rking · · Score: 4, Insightful

      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.
  2. Hmmmm.... by CodeShark · · Score: 5, Insightful
    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.

    --
    ...Open Source isn't the only answer -- but it's almost always a better value than the alternatives...
    1. Re:Hmmmm.... by 787style · · Score: 4, Insightful

      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.

    2. Re:Hmmmm.... by nacturation · · Score: 4, 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. 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.
      --
      Want to improve your Karma? Instead of "Post Anonymously", try the "Post Humously" option.
  3. Re:Who wants to bet? by king-manic · · Score: 5, Insightful

    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.

    --
    "There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy."
  4. Re:Let me be the first to say by DaleGlass · · Score: 5, Insightful

    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.

  5. Re:So tell me... by Daniel_Staal · · Score: 5, Insightful

    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.

    --
    'Sensible' is a curse word.
  6. Re:Who wants to bet? by rs79 · · Score: 4, Insightful

    *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.

    --
    Need Mercedes parts ?
  7. I think that the problem is: by avronius · · Score: 4, Insightful

    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.