In the waning hours of the 2006 Congressional session, Congress passed the Safe Port Act, designed to “improve maritime and cargo security through enhanced layered defenses,” according to the U.S. House website. With passage of the Safe Port Act came a very important rider: The Unlawful Internet Gambling Enforcement Act. Congress was clueless as to the bombshell it was about to drop on the rest of the globe. The issue has spilled over into the World Trade Organization, which has been in the center of a dispute involving the European Union, Antigua, and the United States. Late in December, Reuters broke a story saying that the EU had accepted a deal. The issue stems from the United States not allowing gambling from offshore betting houses within its borders, essentially withdrawing from a treaty it had signed earlier. It was exacerbated by passage of the UIGEA and has garnered major international attention. While gambling online in the United States may be questionable in the minds of some, the fact is, according to a recent Financial Times article, “European gaming companies claim to be losing $4 billion annually as a consequence of the U.S. decision to shut its online gambling market, the most lucrative in a growing global business worth $15 billion to $20 billion a year. Until legislation passed by the U.S. Congress [in 2006], which prohibits banks and credit card companies from processing payments to online gamers, the U.S. accounted for half of all online gambling customers worldwide.”
The concessions given by the United States allow the E.U. to tread on “warehousing, technical testing, research and development and outbound international letter delivery.” The extent to which U.S. companies such as UPS, DHL, or FedEx will be affected is unknown. Both of those corporations are coming off the busy time of the year for them and this may be some Scrooge-like news. The Los Angeles Times quoted a spokesperson for Austrian-based Bwin as saying, “We continue to believe that it is better to regulate than to prohibit, because the reality shows that the prohibition only drives out the transparent, listed operators.” An agreement was reached late in the day on a Friday, essentially buried in the weekend news leading up to the holidays. It was eerily similar to the UIGEA, which was itself passed in the witching hours of a Friday night.
Meanwhile, the nation of Antigua was seeking $3.4 billion in damages from the U.S. Compensation for the tiny island nation will involve suspension of U.S. trade and patent rights, meaning many companies domestically could suffer. On Friday, December 21st, it was announced that Antigua would receive just $21 million in trade benefits. The difference between the amount of money asked for by the tiny island nation and the amount received is enormous and effectively does little to hurt the U.S. However, according to Poker Players Alliance Executive Director John Pappas, “The number for the Antigua case isn’t staggering, but sets a very troubling precedent. The amount of the settlement isn’t the issue, but the remedy is: the ability to pirate U.S. companies’ software. That should trouble some of the leading intellectual property and software companies out there like Microsoft, Disney, Time Warner, and Adobe. These are billion dollar companies. $21 million in damages might not scare them, but Antigua won at this level and got what they wanted. That can’t be a good precedent for future cases.”
The bigger picture here for Pappas and for the U.S. concerns that dreaded “p” word that Pappas spoke about, precedent. Essentially, if another giant nation like India or China wanted to withdraw itself from a worldwide commitment like the U.S. did, they now have a “road map” to be able to do so. It’s a dangerous step to take by one of the leading nations on the planet.
Check out all the latest from the WTO rulings by visiting the Poker Players Alliance website and by scoping out the PocketFives.com Legislative Forum.
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