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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."

15 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 As long as the US continues its patchwork enforcement of laws based on outdated concepts of how people should and shouldn't live, we deserve to pay what amounts to a $100 billion annual Stupid Tax.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 terrymr · · Score: 5, Informative

      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.

    3. 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.
    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".

  2. Who wants to bet? by 140Mandak262Jamuna · · Score: 5, Funny

    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
    1. 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."
  3. 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 Anonymous Coward · · Score: 5, Interesting

      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.

  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. From the other side of the fence by WibbleOnMars · · Score: 5, Informative

    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.

  6. 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.