WTO Action by Antigua May Be A Miracle River Card - Slate article

[DonkBet]

Henry Lanman, a New York lawyer, just posted on Slate a lengthy examination (http://www.slate.com/id/2153352/) of the Unlawful Internet Gambling Enforcement Act as it relates to the Antigua's WTO proceeding. In spite some incorrect characterizations of the law (the UIGEA bans bank transfers, not just credit card transfers), I think this article moves the ball some.

Lanman summarizes the pre-UIGEA argument as follows:
[ QUOTE ]
Antigua's basic theory in its WTO complaint was simply that, if the United States allows any Internet gambling at all, it couldn't, in light of its WTO obligations, impose barriers to foreign companies seeking access to its market. It was a pretty straightforward free-trade argument. In response, the United States tried to take advantage of a "morals" defense in WTO proceedings that says, reasonably enough, that if you don't make a product in your country due to moral objections, you needn't open your market to foreign providers of that product.

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This action remains pending. In the meantime, as we know, Frist and co. snuck the UIGEA through the backdoor. The irony is that the UIGEA might have fouled up the US's WTO defense by exempting certain forms of internet gambling -- horse races, fantasy sports. Lanman argues that Antigua has a pretty good shot at prevailing in its WTO proceeding because the morals defense wouldn't fly due to these exemptions: [ QUOTE ]
So, whatever slender chance the United States may have had of establishing some broad moral objection to online gaming appears to have disappeared. In fact, things look so bleak for the United States that the government recently published a "Request for Comments" in the Federal Register that is essentially a nationwide call for help from anyone who thinks they can come up with an argument it can use here. The government, it seems, is all out of ideas.

[/ QUOTE ]
Good news. But so what if Antigua prevails? Here's where this article moves the ball. I've seen "WTO as savior" arguments made on this forum before, but they've always fell short on the problem of leverage. If Antigua wins, what can they actually do? Lanman thinks that Antigua can realistically threaten to become ground zero for massive copyright and patent abuse aimed at US companies:[ QUOTE ]
Want a cheap copy of Microsoft's latest software or a nice medical device that, annoyingly, is protected by a U.S. patent? Come to Antigua. In such a scenario, Antigua couldn't simply be ostracized as a rogue state. It would have every right under WTO rules to pursue such a course. In fact, Antigua could go down this road only in response to the United States' continuing refusal to honor its international obligations. While there undoubtedly would be complicated issues and restrictions on the scope of any suspension the WTO approves, the United States shouldn't assume that the world body is too timid to hand Antigua this sort of stick with which to retaliate, since it has authorized intellectual-property-based reprisal before

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If that turned out to be the case, is there any chance the UIGEA won't be repealed? Read the whole thing. It gives hope that Dr. Frist might've shot himself in the foot one last time before leaving office.

[Nate tha\\\' Great]

For a more pessimistic view, you can read here (http://rcfox.livejournal.com/86096.html?mode=reply).

[MLSchaff]

I'm not counting on the WTO to solve anything, but one issue was missed by the writer of the pessimistic article.

The banking system and Fed Chairman Bernanke want nothing to do with enforcing this law. They have the most influence of any group in the drafting of the regulations. I predict that the regulations will be rather toothless as a result, and there will remain plenty of ways to fund online accounts - even if Neteller decides to get out.

What it is going to come down to is if site operators want to risk arrest for operating online gambling sites. Extradition of gambling execs from foreign countries is probably unlikely, as it just further exposes the U.S. governments hypocrisy to the rest of the world. As long as there are gaming execs that don't mind never setting foot on U.S. soil again, there will be online gambling access for Americans.

[ChexNFX]

Yeah, I'm not a huge fan of what the pessimist has to say. On every single point, he's on the negative end. It turns out that there usually is a combination of both in issues like this.

[Ramon Scott]

There are folks in the know who are saying that the Slate article is one of the most accurate articles published regarding the current situation.

[StellarWind]

The true problem for the U.S. with the WTO ruling is the political damage to cases where the U.S. is the plaintiff. Weakening the WTO and losing the moral high ground will probably cost us more money just in our disputes with China than any reprisals Antigua could possibly devise.

Unfortunately it is almost impossible to measure this type of damage so our visionless political system won't do anything to solve the problem.

[2461Badugi]

The problem with the intellectual property argument is that it could lead to reprisals from outside the US. Most IP is held in multiple countries these days, and if Antigua is violating British/Canadian/etc. copyrights in the process of violating American ones, they're going to end up in trouble.

I'm not sure there's really enough exclusively American IP in any one field for a country with the resources of Antigua to pose a real threat. The exception may be pharmaceuticals. I'm not sure anyone wants another player in that war.

Of course, as usual if we can get the wind up the skirts of the RIAA/MPAA reality won't actually matter.

I'm interested in hearing anyone's sources on member states being allowed to violate TRIPS as restitution/reprisal. By my recollection TRIPS doesn't seem to allow that, but I'm not totally current and the WTO does tend to interpret things however it feels like at times.

[Richas]

[ QUOTE ]
The true problem for the U.S. with the WTO ruling is the political damage to cases where the U.S. is the plaintiff. Weakening the WTO and losing the moral high ground will probably cost us more money just in our disputes with China than any reprisals Antigua could possibly devise.


[/ QUOTE ]

The EU has also registered an interest in the Antigua case and submitted evidence in their support. This means that it's not just China related issues, the EU can use this as leverage across the board. They can also impose sanctions when the ruling is final in Feb 07. The pessimist is wrong in thinking the US won the case, they did not, they lost and did a press release emphasizing that on some of the evidence the appeal went with the US, true but irrelevant. Agreeing that a country has the right to ban all gambling does not mean that the WTO agrees that excluding foreign competition is OK which is all the US legislation does (especially so now wth the explicit exemptions).

As for his tax example, yes the US was able to delay in this pretty grey and murky area but in the end they had to extend the tax break to foreign companies. You could use the same example to show the WTO being effective and this is not a grey area. The breach is crystal clear which is why it will be used for leverage, the risk with WTO is more that they will use this as leverage for the Doha round without really forcing the specifics of online gambling to a free trade conclusion. Odds are the EU etc will care more about other issues and do a deal that say helps Airbus and Third World farmers rather than gamblers in the US.

[Wynton]

I think the threat of intellectual property reprisals is downright silly.

First of all, Antigua may have similar intellectual property laws as the US, and actually want to keep them for its own, independent reasons. Second, even if Antigua wanted to adopt laws that conflicted with the US laws, such laws would probably also conflict with the laws of other countries, who probably care a lot more about those laws than gambling. Third, just because Antigua enacts contrary intellectual property laws, it does not necessarily follow that private companies could not sue infringers (though jurisdictional issues would certainly be raised).

[TMTTR]

[ QUOTE ]
Extradition of gambling execs from foreign countries is probably unlikely,

[/ QUOTE ]

Actually, extradition is damn near impossible. Extradition from countries that have an extradition treaty with the United States typically (possibly always) requires dual criminality, i.e., the alleged crime must be a crime in both countries. Without studying the issue in depth, I am going to make the leap of faith to say that internet gambling (and permitting the funding of internet gambling) is not illegal in most countries where internet gambling execs reside...

[meleader2]

[ QUOTE ]
[ QUOTE ]
Extradition of gambling execs from foreign countries is probably unlikely,

[/ QUOTE ]

Actually, extradition is damn near impossible. Extradition from countries that have an extradition treaty with the United States typically (possibly always) requires dual criminality, i.e., the alleged crime must be a crime in both countries. Without studying the issue in depth, I am going to make the leap of faith to say that internet gambling (and permitting the funding of internet gambling) is not illegal in most countries where internet gambling execs reside...

[/ QUOTE ]

so party pulled the plug because...?

[TMTTR]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Extradition of gambling execs from foreign countries is probably unlikely,

[/ QUOTE ]

Actually, extradition is damn near impossible. Extradition from countries that have an extradition treaty with the United States typically (possibly always) requires dual criminality, i.e., the alleged crime must be a crime in both countries. Without studying the issue in depth, I am going to make the leap of faith to say that internet gambling (and permitting the funding of internet gambling) is not illegal in most countries where internet gambling execs reside...

[/ QUOTE ]

so party pulled the plug because...?

[/ QUOTE ]

Nothing to do with extradition of execs -- again, I haven't studied the issues as much as others in this forum, but Party is still a publicly traded company and played it super cautious. There are other ways to harm a company other than prosecuting their executives on criminal charges...

[RoundTower]

[ QUOTE ]
I think the threat of intellectual property reprisals is downright silly.

First of all, Antigua may have similar intellectual property laws as the US, and actually want to keep them for its own, independent reasons. Second, even if Antigua wanted to adopt laws that conflicted with the US laws, such laws would probably also conflict with the laws of other countries, who probably care a lot more about those laws than gambling. Third, just because Antigua enacts contrary intellectual property laws, it does not necessarily follow that private companies could not sue infringers (though jurisdictional issues would certainly be raised).

[/ QUOTE ]
This makes no sense, of course Antigua can have different laws from the US without them being in "conflict". And it would be entirely reasonable for Antigua to decide only to honour the TRIPS (http://www.wto.org/english/tratop_e/trips_e/t_agm0_e.htm) agreement with compliant members of the WTO.

[AAAA]

they are planning something, believe me...they will be back in one way or another within a year, and if other sites aren't clever, the other places will not like what happens!

this is part guess but part rumors from several sources and knowledge of the way party works.

[Wynton]

[ QUOTE ]
[ QUOTE ]
I think the threat of intellectual property reprisals is downright silly.

First of all, Antigua may have similar intellectual property laws as the US, and actually want to keep them for its own, independent reasons. Second, even if Antigua wanted to adopt laws that conflicted with the US laws, such laws would probably also conflict with the laws of other countries, who probably care a lot more about those laws than gambling. Third, just because Antigua enacts contrary intellectual property laws, it does not necessarily follow that private companies could not sue infringers (though jurisdictional issues would certainly be raised).

[/ QUOTE ]
This makes no sense, of course Antigua can have different laws from the US without them being in "conflict". And it would be entirely reasonable for Antigua to decide only to honour the TRIPS (http://www.wto.org/english/tratop_e/trips_e/t_agm0_e.htm) agreement with compliant members of the WTO.

[/ QUOTE ]

What I said makes perfect sense, in the real world. If Antigua wants to punish the US and US companies in any practical sense, its laws and regulations are going to have to be significantly different than the US approach. If their laws don't actually conflict, then why would the Antigua response have any consequence at all?

[RoundTower]

Like the Slate magazine suggests, the law in Antigua might be "it's OK to copy Microsoft Office and resell it." This doesn't "conflict" with any US laws, it's just different from the laws in the US. In the same way, it is legal to sell and possess marijuana in Holland, and to drive at 180mph in Germany on the Autobahn. These laws don't "conflict" with the US, just different countries have different laws.