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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!
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 As long as the US continues its patchwork enforcement of laws based on outdated concepts of how people should and shouldn't live, we deserve to pay what amounts to a $100 billion annual Stupid Tax.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.
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?
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
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.
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...
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.
Seven puppies were harmed during the making of this post.
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.
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.
I am a free slashdotter. I will not be modded, blogged, DRM'd, patented, podcasted or RFID'd. My life is my own.
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.
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.
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.
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.
Fun with Anagarams! LADS HOST, SHALT DOS. HAS DOLTS. AD SLOTHS, HATS SOLD. ASS HO, LTD.
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.
If you post it, they will read.
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.