Antigua WTO Press Release-US action contrary to purpose of GATS

[Jay Cohen]

http://www.caribbeanpressreleases.com/ar...se-of-GATS.html (http://www.caribbeanpressreleases.com/articles/1822/1/WTO-adopts-panel-report-US-seeks-to-withdraw-its-WTO-commitments-on-gambling-and-betting-services/Us-action-contrary-to-purpose-of-GATS.html)

WTO adopts panel report, US seeks to withdraw its WTO commitments on gambling and betting services

US action contrary to purpose of GATS

Geneva, Switzerland -- May 24, 2007 --The Dispute Settlement Body (DSB) of the World Trade Organization (WTO) unanimously adopted on Tuesday the report of its compliance that, among other things, found the United States had failed to comply with the original rulings and recommendations which were previously adopted by the DSB, in the ongoing dispute over the cross-boarder provision of gambling and betting services by Antiguan providers to consumers in the United States.
"It is somewhat unfortunate that previous reports in our dispute had left considerable uncertainty and ambiguity in the minds of some and were exploited for those purposes by others. This time around, though, I am extremely pleased that the compliance panel did not leave any room whatsoever for anyone, lest of all the United States, to misconstrue or obfuscate the conclusions of this report," said the Honourable Dr. Errol Cort, Minister of Finance and the Economy, who has responsibility for this matter.

The Minister highlighted a number of key findings of the compliance panel which he thought may have contributed to the US' decision not to further appeal the case. These include: (a) the acknowledgement by the panel that the US has a flourishing domestic, remote gambling industry which is licenced and regulated by a number of States but which offer identical services to those from Antigua operators; (b) the fact that the US government only seeks to prosecute foreign operators; and (c) recent US legislation that criminalizes financial transactions for “unlawful internet gambling” only applies for foreign remote gambling and exempts a number of its domestic remote gambling operations.

Having announced that its will accept the findings of the panel, the US jolted the entire WTO membership with its subsequent announcement on 4 May that it will withdraw its commitment for gambling and betting services under what is known as "Article 21" of the GATS agreement.

"This astounding and unprecedented action by the US opens up a whole new chapter in the WTO jurisprudence, which runs contrary to the object and purpose of the GATS, the DSU and other WTO agreements," said the Minister.

He went on further to stressed that, in light of this latest development by the US, his government will be examining the various options available to it with a view to identifying the most appropriate course of action.

In his address to the DSB, Antigua and Barbuda's Ambassador to the WTO, Dr. John W. Ashe, noted that this latest move by the US flies “in the face of the concept of liberalization that is embodied in the GATS and the current Doha Round, and is contrary to these objectives."

"Moreover, it is difficult to see how the US can, on the one hand, encourage and perhaps insist that other WTO members expand their commitments in services while simultaneously erecting a new barrier to trade in services from other members. This is particularly so when one considers that the American component of the remote gambling industry is estimated to be in excess of US $10 billion annually," he said.

In his response to this latest move by the US, Antigua and Barbuda's legal adviser, Mark Mendel, noted that, in his view, the dispute has been resolved and the US remains obligated to comply.

"The dispute is settled and Antigua is entitled to and will be expecting market access. If the US wants to try and shut out potential future liability to other WTO members, it is welcome to try," he said.

"What must get lost in the shuffle, though, is the simple fact that the US has a large, sanctioned domestic industry. If it was seeking to withdraw its commitment due to a strong anti-gambling culture, this would be understandable. However, this is certainly not the case here: it is seeking to withdraw this commitment simply to erect a trade barrier to foreign competition in order to protect and enhance its own, flourishing domestic gambling and betting industry," he added.

The DSB also heard statements from the representatives of the European Communities, Brazil and India, who all called on the US to exercise the greatest of caution before proceeding with its stated plan to seek a change in its Article 21 commitment.

[Jay Cohen]

http://www.theregister.co.uk/2007/05/23/antigua_wto_us_gambling/

Antigua calls for pirates to return to Caribbean

House of Cards Antigua and Barbuda - a nation of 70,000 in an area roughly half the size of San Francisco - has formally requested that the WTO allow it to suspend its intellectual property obligations to the United States, AP reports.
Although many in the US have mocked tiny Antigua'a case against the US with a shrug of the shoulders, the Antiguans have always carried in their pockets a nuclear option of sorts. Most Americans view trade disputes through the prism of tit-for-tat protectionist schemes. A perceived price subsidy leads to retaliatory tariffs, etc; but the obligations imposed by WTO obligations run deeper than that.

Repeated violation of WTO commitments in the face of contrary WTO rulings allows a victimized member country ultimately to suspend its own WTO obligations to the offending nation - a form of restitution much more punitive than tariffs alone. America runs a steady and hefty trade deficit in virtually every category of international trade other than intellectual property.
Were the WTO - with possible European, Japanese, and Chinese support - to allow the Antiguans to suspend all intellectual property obligations to the United States, the American IP industry could face a tiny adversary with an unlimited right to reproduce for its own benefit American IP goods of any kind..............(Click on link to read the balance)

[TheEngineer]

I wrote to my congressman and senators and explained that I would expect the U.S. to not renege on our commitments to the WTO.

[MiltonFriedman]

I wish they were not so, but the facts are:

1. Antigua imports heavily FROM the US and depends somewhat on US tourism.
2. Antigua is deep in hock to the Stanford banking interests
3. For the right, and not too high a price, Antigua can essentially be bought, i.e paid enough "aid" and other benefits to make it worthwhile to kick out online gaming.

The Spencer government would be foolish not to act in the national interest take a generously valued trade package in exchange for Bill Scott et al. Keep the non-US online sites, kick out the US sites and we will give you $20 million, $50 million, $100 million ..... whatever.

Hell, weren't poppy-growers paid not to grow poppies ?

Yeah, the issue is coming to a head, I am not sanguine about the outcome for online gaming however.

(Jay, you've been to Antigua. If you think I am wrong, please point out how.)

FWIW, I think the Antigua lawyers did a great job. The form of the benefits to Antigua asre up in the air. It would be ironic if the effort cost the gaming interests their sanctuary.

Milton

[daedalus]

I don't think a one time buy out is what Antigua is looking for. Online gambling is a long-term high-profit industry for them that they would be permanently forfeiting with an agreement like that. Now they have the option of starting a new industry of selling Eminem CDs and Shrek 3 DVDs for $1. Printing DVDs is cheaper than running a server-farm for poker sites.

Of course this would last 5 minutes until the U.S. Industry giants threaten to get every Congressman ousted in the next election unless they reverse this WTO decision.

[TheEngineer]

Nice post Milton. I've mentioned similar things here as well.

The WTO ruling is good for us, but we have to back it up with political change. In other words, the U.S. has to WANT to comply. Otherwise, the U.S. will not. Hopefully we'll write and call Congress and ask them to honor our commitments.

[Moneyline]

Thanks for posting this, Jay.

I don't have any analysis to add, but I really hope the US media picks up on this. This is a potentially huge story even for people who don't know a thing about online gambling.

[Jay Cohen]

[ QUOTE ]
I wish they were not so, but the facts are:

1. Antigua imports heavily FROM the US and depends somewhat on US tourism.
2. Antigua is deep in hock to the Stanford banking interests
3. For the right, and not too high a price, Antigua can essentially be bought, i.e paid enough "aid" and other benefits to make it worthwhile to kick out online gaming.

The Spencer government would be foolish not to act in the national interest take a generously valued trade package in exchange for Bill Scott et al. Keep the non-US online sites, kick out the US sites and we will give you $20 million, $50 million, $100 million ..... whatever.

Hell, weren't poppy-growers paid not to grow poppies ?

Yeah, the issue is coming to a head, I am not sanguine about the outcome for online gaming however.

(Jay, you've been to Antigua. If you think I am wrong, please point out how.)

FWIW, I think the Antigua lawyers did a great job. The form of the benefits to Antigua asre up in the air. It would be ironic if the effort cost the gaming interests their sanctuary.

Milton

[/ QUOTE ]

You assume that Antigua doesn't know the value of what they have won. Barney Frank stands up and says this can bring in $3 billion a year in tax revenue. When they indict BOS the US claims $4.5 billion in revenue. Antigua knows the value of the industry. What's the value to the US to get Antigua out of the way for a lifetime?

Antgua is in the strongest position it has ever been in this case. Why would they fold for a song now? Also, many Americans seem to assume that every small country in the world can be bought by the US and not for much. It's not always true. Antigua wants their industry. They didn't come this far for spare change.

Tourism and imports have nothing to do with this. Seeking remedies won in the WTO arena is not supposed to bring retaliation. All Antigua wants to do is claim what they won in a legitmate, neutral forum. They are even willing to give up elements of the win to get it settled. Unfortunately, for the last four years the US has lied, negotiated in bad faith, and done nothing but spin the decision in the media. Maybe when the RIAA and Motion Picture Association ask their lobbyists what the hell is going in in DC and why their product is suddenly unprotected Congress will wake up and pressure the Administration to settle the case?

Antigua has a national debt like many countries. I am not sure how much, if any, Stanford is holding.

Engineer, thanks for contacting your Congressman.

[Jerry D]

[ QUOTE ]


The DSB also heard statements from the representatives of the European Communities, Brazil and India, who all called on the US to exercise the greatest of caution before proceeding with its stated plan to seek a change in its Article 21 commitment.

[/ QUOTE ]

This last paragraph is very important and telling. The European Union, India, and Brazil are basicly saying if the US continues try to not follow WTO trade laws they will strongly back Antigua. The big arrogant US bully may think they can push tiny Antigua around, but it will be harder for them to pick on someone more of their own size like the European Union, Brazil, or India.

[Skallagrim]

Both Jay and Milton are right, and we will just have to see how this plays out...but I am optomistic primarily because the Bush administration only has 18 more months and even a future republican administration cant be as stupid as this one.

I suspect Antigua would love to negotiate an end to this dispute, and it can be bought off. But it wont be bought off cheap, they have won too much and have garnered allies.

Will it be worth it to the anti-gambling fanatics to give Antigua say a BILLION DOLLARS a year for the right to keep our internet gaming laws as written? How about when other countries start seeking "compensation" too?

As I have said before, although I cant predict the outcome, this WTO decision will force something to happen. As poker players we need to keep up what pressure we can to make sure the outcome is not a one time payment and a law against all internet gaming in the US (which will kill the horse-racing industry, and piss off the sports leagues when fantasy sports are also outlawed). That, at present, is the best the anti-gaming lobby can hope for, they will never achieve the political clout for endless payments or the end of the WTO as the price to stop gambling.

Skallagrim

[MiltonFriedman]

"When they indict BOS the US claims $4.5 billion in revenue. Antigua knows the value of the industry."

Jay, you should know the effective tax revenue to Antigua from the gaming industry ..... $0, whether EC or USD. Gaming companies do NOT pay income tax to Antigua.

Gaming companies pay an annual license fee.

The direct revenue value to Antigua of the gaming industry is $1 less than what a competing jurisdiction would offer.

The indirect value of employment taxes is similarly close to zero.

It is suprising you think that tourism and imports have nothing to do with the Antigua economic future and planning.
The Antiguan economy does get value in employment, but it could easily be replaced by other industries' call centers operations. Thee are only 60,000 Antiguans.

If a couple of big US companies were to invest in a call center or 2 or 3, there goes that "unique" contribution of gaming.

Similarly, if there were development funding for tourism or financial services jobs, why wouldn't the Antiguans cash in their WTO chips and go "legit".

(Jay Cohen, you probably should have a good feel for what Stanford's role in Antigua has been.)

[MiltonFriedman]

"I don't think a one time buy out is what Antigua is looking for. Online gambling is a long-term high-profit industry for them that they would be permanently forfeiting with an agreement like that."

Clearly, you have no direct knowledge of Antigua or its economy. Online gaming is high-profit, but not for Antigua.

1. The income tax paid by the gaming industry in Antigua is ZERO, $0 whether USD or EC.... Only an annual license fee is required.

2. The type of employment offered to Antiguans is easily replicated by ANY call center operation from any industry.

3. Why wouldn't Antigua jump at the chance to develop a different industry, such as tourism or call centers in something other than gaming. The island is ripe for tourism, this "winning WTO hand" has chips which can be cashed in for development aid beyond the "long term" value you ascribe to an embattled gaming industry.

Besides, they could always keep the non-US facing industry.

Nope, I think the outcome may be good for Antigua but bad for US facing companies in Antigua, which is ironic.

[schwza]

[ QUOTE ]
Clearly, you have no direct knowledge of Antigua or its economy. Online gaming is high-profit, but not for Antigua.

1. The income tax paid by the gaming industry in Antigua is ZERO, $0 whether USD or EC.... Only an annual license fee is required.

[/ QUOTE ]

do you happen to know how much the fee is? if i were antigua, i'd make the fee pretty big. it's a big pain for a site to pack up and move to another country.

[MiltonFriedman]

It is on their website.

If they make the fee "too big", then companies move elsewhere.

You are incorrect on your understanding, online gaming companies are pretty nimble. BetUS left town in about 48 hours. A company facing a new tax has plenty of notice to relocate.

[BluffTHIS!]

[ QUOTE ]
"I don't think a one time buy out is what Antigua is looking for. Online gambling is a long-term high-profit industry for them that they would be permanently forfeiting with an agreement like that."

Clearly, you have no direct knowledge of Antigua or its economy. Online gaming is high-profit, but not for Antigua.

1. The income tax paid by the gaming industry in Antigua is ZERO, $0 whether USD or EC.... Only an annual license fee is required.

2. The type of employment offered to Antiguans is easily replicated by ANY call center operation from any industry.

3. Why wouldn't Antigua jump at the chance to develop a different industry, such as tourism or call centers in something other than gaming. The island is ripe for tourism, this "winning WTO hand" has chips which can be cashed in for development aid beyond the "long term" value you ascribe to an embattled gaming industry.

Besides, they could always keep the non-US facing industry.

Nope, I think the outcome may be good for Antigua but bad for US facing companies in Antigua, which is ironic.

[/ QUOTE ]


Milton,

Your analysis and *theory* here ignores a couple points.

1) Even if online gaming is an untaxed industry in Antigua, it provides *jobs* to its citizens and *long-term*. One time payments have to be massive to cover the long term.

2) Antigua, despite being to many in the world some piss-ant island looking for a handout, probably actually takes its sovereignty seriously (it could have just stayed a dependancy of the UK and kept sucking on the Queen's teat). This sovereignty will best be demonstrated to the world by long term trade concessions, and not one time payoffs.

3) Antigua probably cares about its reputation in the gaming industry, and thus probably isn't as likely as you think to sell out companies doing business in the US.



Obviously anything is possible, but I doubt that Jay with his inside knowledge of Antigua, would be here touting their cause if he thought Antigua was just looking for a payoff prior to giving his former partners the boot.

[Jay Cohen]

Milton,

Check this thread in 30 days, and I will share more with you.

I'll leave it at that.

[Grasshopp3r]

Just for the sake of argument, suppose that everyone in the WTO lines up behind Antigua and makes this an issue that they will take as far as they can. Then what happens? Does the US not buy all of their exports?

I don't see much leverage from the WTO as it is typically the domestic industry that is the aggrieved against an exporting country. In the gambling case, there are no domestic competitors. Do I understand this or am I missing something crucial?

[Jay Cohen]

If every country steps up to the claim window, the US will unwithdraw their commitments and be right back to where they were on May 3rd.

Take a look at recent case that the EU may have lost, or knows they will lose. The US is pressing the EU to comply. Now, the EU can trade off compliance in that sector with the gaming withdrawal. May not mean anything here, but it sure means something to whatever industry was pressing the US to bring it in the first place. The trade off could be worth billions to another sector.

[MiltonFriedman]

Okay.

If things turn out well, that's great. I would love to be wrong .... and I'll buy the Cavalier.

[tangled]

As to the question of whether the US will achieve a cheap pay off with Antigua: The US didn't just lose the legal battle, they have pulled out of the process altogether and have announced that they don't think they owe anything. We know how arrogant and stubborn Bush is. Even if a cheap out is available, I am not sure Bush would pursue it out of self pride. A cheap settlement would require negotiations with Antigua of some sort,but the US has given no indication they want to negotiate whatsoever.

[tangled]

[ QUOTE ]
Just for the sake of argument, suppose that everyone in the WTO lines up behind Antigua and makes this an issue that they will take as far as they can. Then what happens? Does the US not buy all of their exports?

I don't see much leverage from the WTO as it is typically the domestic industry that is the aggrieved against an exporting country. In the gambling case, there are no domestic competitors. Do I understand this or am I missing something crucial?

[/ QUOTE ]


Yes, we import more than we export, but there is a reason for that. Other countries may get our money when they export stuff to us, but we get cheap stuff in return. We like cheap stuff. The price of gas already threatens to kick our economy in the behind. It would be hard for us to just stop importing from countries and either start doing without or paying more for the same stuff elsewhere.People simply are not going to tolerate much more just to appease Kyl and his merry band of religious zealots. At least I hope not

[counthomer]

Jay, I am utterly perplexed at your position on this. I'm sure that you know more about what is happening behind the scenes than most of the 2+2ers, but I can't comprehend your angle on this.

All this bluster about us changing GATS and the Antiguans becoming the worlds largest purveyor of cheap IP is nonsense. It is quite obviously just us (the US) and the Antiguans making political moves to pressurise the other side, there is no substance in it.

I can't believe that people think that they are suddenly going to get a copy of 'Vista Antigua', or that we can unilateraly changes the rules of international trade when we dislike the result. The US will never change it's GATS agreements in this manner - as everybody rightly points out, it has too much to lose in other areas as a result.

Similarly, the Antiguans will never be given carte blanche to override IP while there is even a hint of negotiation or progress from the US side. There is no way the WTO wants a confrontation where the US could really decide to withdraw or actually carry out their threat to change the rules - that would be the end of the WTO, and as everyone knows, all organisations are self serving. This ability of the US to stall any sanctions by being able to make token progress is the killer for Antigua, as the UIGEA is right around the corner.

If you remove all the froth and manouvering, it is utterly simple. At some point the US must (and will) come into line with the ruling. This will take many months if not years - as all these things do. Coming into line will either mean no remote gaming (unlikely, but not a scenario Antigua wants at any cost) or all remote gambling. The latter is the key, as if you are a US official, do you want:

a) Antigua to be the gateway to the US market and make all the money.
b) Huge domestic tax revenues.

Obviously it is the latter. This can be achieved by licencing and giving the Harrahs of this world an advantage. I'm sure Jay et al will be outraged at this, but this is exactly how everything ends up. It may even end up back at the WTO for another few years of arguing (and time is not something Antigua has). Interestingly, the recent proposals by Frank are all about licencing - which is why Jay was against them.

So lets consider the Antiguan angle. They are sitting there, with their industry suffering, and the axe hanging over them in the form of the UIGEA. If they can't get a solution soon there wont be much of an industry left for them to protect - they certainly can't wait years while we stall the process, the UIGEA kicks in and the (US) domestic providers appear.

Furthermore, Antigua really doesn't want to force a decision out of the US, as it knows that either no remote gambling or a (semi) open US market is potentially devastating for it. This is why IP sanctions are a no go - as it would instantly force a US decision (which Antigua really doesn't want).

Hopefully the Antiguans are wise enough to realise that the US will keep throwing little scraps their way, negotiating, and making pointless threats to keep the WTO at bay until Antigua has lost the war. Therefore this is, and always has been, a bit of long term busted flush for Antigua. The only result I can see for them is a monster compensation pay day. That is great for them from my view, as there is no guarantee they could sustain a gaming industry in the medium term, and the WTO will never be able to take the real steps necessary to help them in the time required.

The presence of the other big countries is probably harmful to the Antiguans cause as it allows the process to be further delayed while the negotiations continue. The other countries have no interest in gaming - they just see leverage. Interestingly the greater that leverage becomes, the worse it is for the Antiguans as it forces the US closer to a decision.

There is a simple equilibrium here, and thats why I can't see Jay's angle. As a smart person, surely you can't believe the US will sit back and give Antigua the freedom of the market?

I can see only two reasons for your position, Jay. I know your presence on this board is essentially a marketing tool, but I hope you will answer these questions:

1) Have you got some deal with the Antiguan government for them to cut you in on any IP or compensation deal? If not, is there not a scenario where Antigua gets a result but you don't?

2) Is this your only life raft?

If it is the latter, I hope not - I have a great deal of time for WSEX and your cause, but I also know that other providers are 75% down the path to implementing their UIGEA solutions. If you aren't in the same position I would suggest you open up your chequebook as otherwise this whole argument will be moot.

[Skallagrim]

While its true being an obvious hypocrite has not stopped the Bush administration from doing it what it wants (so far), eventually the time will come when the piper must be paid, one way or the other. Withdrawing entirely from the WTO is NOT a viable option for the US, nor is ignoring its rulings, and Antigua and their allies know that. Hence the US will have to make concessions of some form eventually ... even Bush will if his rich cronies/supporters tell him he has to.

But what those concessions will be, aye there's the rub.

And it could take a long time too.

[Jay Cohen]

Well, when Antigua goes to seek their remedy for the current matter, which is still live, and the withdrawal of the commitment, if the US is allowed to do it, it will invariably end up before a WTO arbitration panel. It won't matter what the US wants, it will be up to the panel to decide. FYI- there is no appeal from a remedy panel, it is final.

I expect any panel, whether in the remedy phase or the withdrawal of the commitment phase, to be VERY sympathetic to Antigua. I don't think the jurists who sit on these cases really appreciate what the US is doing in this case. Remember, nobody has ever withdrawn commitments as a remedy to an adverse decision. It's not clear that they will allow it here.

IP has been awarded once before. When it happened, the case was quickly settled.

Ultimately the US will have to decide whether they want to be part of the WTO or not. They have a lot more to lose if they leave.

I am not a marketing tool for anybody. If you consider this marketing, you have a funny idea of marketing. I'm just educating peopple and fighting for the same thing I have been fighting for for the last 10 years.

[counthomer]

Jay, you are fighting for your personal gain. You choose to side yourself with the Antiguans as your goals are (somewhat) mutually aligned. If the Antiguans managed to negotiate a carve out for sports betting for themselves and left poker to rot you would rarely be seen on these boards again.

Either way, you made statements without answering any of my questions, or countering any of my points. I have no doubt that the process is still ongoing, but as I pointed out, Antigua has no benefit in wielding the ultimate sanction (IP freedom) as it would merely result in a losing situation for them when the we come into line with the ruling to our benefit.

The WTO is therefore no solution to the UIGEA in the short term, and probably practically irrelevant in the long term (when the US will legalise gaming anyway).

[Richas]

[ QUOTE ]
I don't think a one time buy out is what Antigua is looking for. Online gambling is a long-term high-profit industry for them that they would be permanently forfeiting with an agreement like that. Now they have the option of starting a new industry of selling Eminem CDs and Shrek 3 DVDs for $1. Printing DVDs is cheaper than running a server-farm for poker sites.

[/ QUOTE ]

FYI Antigua-Tunes.com and wto-tunes.com are available, a-tunes.com is taken.

[TheEngineer]

Jay,

Are you expecting Jon Kyl and the rest of Congress to repeal the Wire Act (and Bush to sign it) because the WTO said to? I'm just trying to understand the plan. If so, shouldn't we be actively doing something to generate this political climate change? Shouldn't WSEX be emailing their U.S. members to write to Congress, the USTR, and anyone else who influences this?

[Nortonesque]

[ QUOTE ]

IP has been awarded once before. When it happened, the case was quickly settled.


[/ QUOTE ]
Jay, do you happen to know what case that was? I'm wondering if the country involved was allowed to ignore IP for their own use or if they were allowed to distribute IP to others.

[counthomer]

[ QUOTE ]
Jay,

Are you expecting Jon Kyl and the rest of Congress to repeal the Wire Act (and Bush to sign it) because the WTO said to? I'm just trying to understand the plan. If so, shouldn't we be actively doing something to generate this political climate change? Shouldn't WSEX be emailing their U.S. members to write to Congress, the USTR, and anyone else who influences this?

[/ QUOTE ]

I think we have to sit tight on this one. I don't feel it is in our (the poker community) best interests to end up in a situation where the US is forced to choose between no gaming at all and free access.

With the current administration, the people who put us in this current situation could well see this as the opportunity to put the final nail in the coffin, and you also have the question of which side the big US gaming giants will come down on. Given the opportunity to see the existing market truly obliterated, they may play a long game and take a view that they are better off waiting for legalisation in the future. We could end up in another battle against the anti-gaming lobby, and that is not a battle we have had much success in.

As I said before, the WTO is no silver bullet for anyone involved, and has the potential to turn out good or bad for all the players.

[TheEngineer]

[ QUOTE ]
[ QUOTE ]
Jay,

Are you expecting Jon Kyl and the rest of Congress to repeal the Wire Act (and Bush to sign it) because the WTO said to? I'm just trying to understand the plan. If so, shouldn't we be actively doing something to generate this political climate change? Shouldn't WSEX be emailing their U.S. members to write to Congress, the USTR, and anyone else who influences this?

[/ QUOTE ]

I think we have to sit tight on this one. I don't feel it is in our (the poker community) best interests to end up in a situation where the US is forced to choose between no gaming at all and free access.

With the current administration, the people who put us in this current situation could well see this as the opportunity to put the final nail in the coffin, and you also have the question of which side the big US gaming giants will come down on. Given the opportunity to see the existing market truly obliterated, they may play a long game and take a view that they are better off waiting for legalisation in the future. We could end up in another battle against the anti-gaming lobby, and that is not a battle we have had much success in.

As I said before, the WTO is no silver bullet for anyone involved, and has the potential to turn out good or bad for all the players.

[/ QUOTE ]

I agree that this ruling may be bad for us for the reasons you stated. I'm not sure why us writing would be bad, though. How would us opposing a total ban hurt us?

[Skallagrim]

counthomer wrote: " We could end up in another battle against the anti-gaming lobby, and that is not a battle we have had much success in."

This battle is inevitable, and we had better be prepared for it (unlike last time).

But there is no reason to rush into this battle either. The anti-gambling crusaders have already hit their high point; the PPA grows everyday, however, as do our allies. Time, I think, is on our side.

Also, the only republican who has any crossover appeal is Guiliani, no lover of gambling for sure, but no rabid persecutor either. But most likely, thanks to the biggest example of an administration's, and by extension, a party's incompetence in US history (Iraq) there is little chance of a republican president next time around (unless the Dems nominate Hillary).

The WTO always takes a long time to do anything, if I were Jay Cohen and/or Antigua, while I would continue the process and seek out more allies, I wouldnt push things to a final resolution for about, oh, 18 months. By then we should be in the position to turn things to our side's advantage.

[counthomer]

I think the problem with bringing any element of the WTO issue into the argument is that as long as people like Jay don't get the dream scenario they need, there will always be demands for IP resolutions etc. This in turn forces the situation into an all or nothing scenario, which I outlined above as being bad.

I think we are best off following your lead, pushing for US legislation. As I stated in an earlier thread, I have been right behind you on your efforts, and I think that is part of the way forward...

[counthomer]

[ QUOTE ]
The WTO always takes a long time to do anything, if I were Jay Cohen and/or Antigua, while I would continue the process and seek out more allies, I wouldnt push things to a final resolution for about, oh, 18 months. By then we should be in the position to turn things to our side's advantage.

[/ QUOTE ]

I think this is our problem. If the UIGEA regs are a big nail in the coffin, then Antigua has no choice but to try and push for a swift resolution. They won't have an industry in 18 months if the regs hit hard in June.

We therefore (potentially) end up in a bad situation where even a total ban is possible.

[TheEngineer]

[ QUOTE ]
I think the problem with bringing any element of the WTO issue into the argument is that as long as people like Jay don't get the dream scenario they need, there will always be demands for IP resolutions etc. This in turn forces the situation into an all or nothing scenario, which I outlined above as being bad.

I think we are best off following your lead, pushing for US legislation. As I stated in an earlier thread, I have been right behind you on your efforts, and I think that is part of the way forward...

[/ QUOTE ]

Thanks. I'm CERTAINLY not suggesting we abandon support for IGREA in favor of hoping somehow the U.S. will cave to the WTO. After all, there's no history of the U.S. bending to the will of any international body, and there's little reason to imagine this will be the first. However, we can use this as added ammo in our arsenal. I have in some of my pro-IGREA letters.

My original question was really to Jay. It wasn't rhetorical. I'm really curious to know how he sees this progressing, so we can assist if possible.

[counthomer]

I'm still waiting for Jay to explain how he benefits from the situation.

Given that IP sanctions will never practically be used, I can't see how he believes that the real worst case scenario for the US (free access for all companies with no domestic providers of note) is a credible outcome..

[JPFisher55]

It seems to me that if Jay wins, us online poker players win. I know that the opposite is not necessarily true. However, I think that Jay's and Antiqua's efforts help our cause. Not just in Congress and politics, but potentially in court.

[*TT*]

[ QUOTE ]
What must get lost in the shuffle, though, is the simple fact that the US has a large, sanctioned domestic industry. If it was seeking to withdraw its commitment due to a strong anti-gambling culture, this would be understandable. However, this is certainly not the case here: it is seeking to withdraw this commitment simply to erect a trade barrier to foreign competition in order to protect and enhance its own, flourishing domestic gambling and betting industry," he added.

[/ QUOTE ]

WPT Poker - relaunching soon, only accepting foreign bets

MGM - Planning a relaunch as well, foreign facing only

Also I was recently approached by a famous gentleman who will go unnamed, who will be launching a foreign facing poker room within the year. I was asked to work with him on this project.

There are many more examples of legally operating gambling US enterprises which accept bets from foreign entities only. Additionally horse betting and lotteries occur across and within state lines via wire.

Jay - I like your lawyer's stance... it highlights US trade protectionism at its worst.

[JPFisher55]

I read on compatiblepoker.com that Antiqua has asked the WTO for permission to ignore IP protections. Jay said that Antiqua was considering this option, but can anyone confirm that they took this action?

[Jay Cohen]

[ QUOTE ]
I'm still waiting for Jay to explain how he benefits from the situation.

Given that IP sanctions will never practically be used, I can't see how he believes that the real worst case scenario for the US (free access for all companies with no domestic providers of note) is a credible outcome..

[/ QUOTE ]

That's your opinion. I think IP sanctions will be used if push comes to shove. IP interests will be ringing their Congressmen and women off the hook. I doubt the US will ever ban all remote gaming, the horse lobby alone is too strong.

Engineer, I don't want to spell out in a public forum how I think things can get done, but I do think they can.

TT, we agree. Mark nailed it on the head. Have any of you seen the latest press release from the NTRA? It basically brags about how they think their industry is now protected from foreign competition.

[TheEngineer]

[ QUOTE ]
I doubt the US will ever ban all remote gaming, the horse lobby alone is too strong.

[/ QUOTE ]

Do you have data indicating that the horse lobby is stronger than the anti-gambling crowd plus the NFL, such that Kyl and Co. would vote to open up the U.S. to unregulated, wide-open Internet gambling?

I hope you're right.

[ QUOTE ]
Engineer, I don't want to spell out in a public forum how I think things can get done, but I do think they can.

[/ QUOTE ]

Fair enough. PM me if you can think of anything we can help with. Good luck.

[redbeard]

just wanted to say thanks to jay for all the updates and posts. also wanted to thank skillgram and milton for their views on the subject. it definately educates us all on a rather complex issue that is no doubt very important to most of us on this forum.

[TomVeil]

[ QUOTE ]
WPT Poker - relaunching soon, only accepting foreign bets

MGM - Planning a relaunch as well, foreign facing only

Also I was recently approached by a famous gentleman who will go unnamed, who will be launching a foreign facing poker room within the year. I was asked to work with him on this project.


[/ QUOTE ]

So do you think that this is a "warm-up" to make sure that their software is ready to go live when US companies can open? Or simply making money because of the foriegn market right now?

[Legislurker]

I think we are overinflating the mainstream importance of this. Frist pushed this in in the dark. Frankly, the issue can best be summed up by Kyl's spokeman's comment on us, "they just don't vote." We haven't made a front page story despite what could be the most tumultuous WTO case ever in terms of sanctions. Lets face it, Joe voter doesnt really give a rat's ass about the issue.
The WTO ruling is our longshot to go back to a grey legal area, which is where I think most of us want to be. Frank's bill isnt going to address the WTO issue and there will be no law saying all states must allow unfettered gambling if they have a track or lottery or wide area jackpot slot. I want it, you want it, but it isnt going to happen. Our best hope is a compromise between the gov't and Antigua to just go back to where we were. Say its illegal, dont travel to the US if youre a CEO, we wont request extradition because its unenforceable etc... If that deal makes it in the national papers Id be hugely suprised.
The antigambling crowd isnt as strong as you think. Among legislators ignorance(feigned or real) is the norm regarding remote gaming. What our biggest opponent is is the status quo that the UIGEA has made. If the DoJ has to vacate the indictments it has, the chances of new ones are slim to none, especially with all the other things going on there. Honestly, except for Kyl and Goodlatte, everyone that is involved in government wants this to go away. Paulson is sinking huge, i mean huge energy in China, and China trade issues. He might be the only intelligent SOB in the cabinent. I hope he makes the case to Bush that he cant move ahead with his cases there fighting against a case he has lost, and breaking the rules. If the Chinese move to litigating cases instead of resolving them ahead of time(usual route of WTO cases) it coudl be 4-5 years before there is any action. We all know Gonzales is fighting for his political life, so this is really back burner for him.
So best case scenario IMHO....Bush administration agrees to acknowledge there cant be a federal law restricting access to domestic gambling markets and not obligating the states to anything. The banking regs never come out. The president hopes the press keeps ignoring the issue. but if they don't, tony snow says its up to the states to say its illegal. The states really would have no enforcement mechanism if they even care. This is where the structure of the US government comes into play. The AG tells the states if they try to bring a cse, they will assert the commerce clause like they do in other small nasty spats like euthanasia and medical weed. Combined with the supremacy clause they can keep the states out of a lot of things. I also think the big nemesis that is the Christian Right is in disarray. You're right to look at what FOcus on the Family is doing, but they are a group in disarray and decline. Dobson is showing age, and he regrets some of his support for Bush. He had never been political before and that lack of experience in politics is showing in their organization. They are at a moment where they are losing their "champion" in 18 months with no likely successor, and they do not have a poltiical operator with cache, experience, and name recognition. Robertson is old, as is Dobson, and their memberships average ages are in the 50s or higher. Ralph Reid is totally discredited, and Falwell croaked. If we got back to a legal grey area, I think the most their influence gets is a plank at the Rep National Conv, and thats ingored by 99% of voters and pretty much all presidents.

[TheEngineer]

Nice post, Legislurker. I personally have a slightly different opinion on a couple of things, but I do think the world is moving toward what you described. People like us have to assist this movement, though.

[ QUOTE ]
I think we are overinflating the mainstream importance of this.

[/ QUOTE ]

The U.S. did withdraw from the gaming sector of GATS. That's fairly indicative of their desire to not comply at this time. It's a strong statement. I agree with you about Joe Blow not caring...that's our opportunity to make a difference with an advocacy effort.

[ QUOTE ]
The WTO ruling is our longshot to go back to a grey legal area

[/ QUOTE ]

Agree. It's a big long shot, but it's possible. Again, we need to do our part to create the politician atmosphere necessary for this outcome.

[ QUOTE ]
The antigambling crowd isnt as strong as you think.

[/ QUOTE ]

While the current strength of the social conservatives is clearly on the down slope, they still have strength. Keep in mind that 1/3 of the House cosponsored HR 4777, the bill that banned most Internet interstate/international gambling, including poker. Also, the problem for us with Focus is that they are so rabidly anti-gambling. It’s not just a side issue for them. We're probably better off overestimating than underestimating them, as we're underdogs no matter what. If they can’t replace Dobson with someone anyone cares about, that’s bonus for us.

[ QUOTE ]
I also think the big nemesis that is the Christian Right is in disarray.

[/ QUOTE ]

They're still strong, but they are weakening. They, with the neocons, took over the Republican Party not too long ago. Along with gerrymandered districts, they hoped to be able to stay in power by running against abortion and gays. They found last year that this approach won't work. As a result, they’re gradually starting to lose influence in the Republican Party. Also, they themselves are in some disarray, as you noted. The younger evangelicals are far more interested in fighting poverty and AIDS than in telling others what to do. We’re looking pretty good five years from now IF we do what we need to do now.

[MiltonFriedman]

The latter.

[TheEngineer]

[ QUOTE ]
Engineer, thanks for contacting your Congressman.

[/ QUOTE ]

The Honorable xxxx yyyy
United States House of Representatives
0000 Longworth House Office Building
Washington, D.C. 20515-1704

Dear Congressman xxxxx:

As a Republican constituent and voter in your district, I am writing to express my objection to the United States’ withdrawal from the gaming sector (Article 21) of the GATS agreement. This unprecedented withdrawal, made in response to our loss to Antigua in a dispute heard by the WTO over Internet gambling access, will have far-reaching ramifications for the U.S. While the federal government seems to feel there is some driving national interest in legislating the moral beliefs of a few on all Americans by preventing us from playing poker online, the fact is that we need the WTO now more than ever. We have many trade disputes worldwide. We need access to markets and other trade controls. We need the WTO to deal effectively with China. Should we sacrifice this to satisfy the very few social conservatives who, despite the lack of even a single negative reference to gambling in the Bible, feel they have to tell OTHERS not to play poker in their OWN homes on their OWN computers?

I think not. Please ask President Bush to rescind this withdrawal from GATS. We made the commitment, so we should stick to it. The word of the U.S. should be our bond.

Thanks for your consideration.

Sincerely,

TheEngineer

[ProsperousOne]

[ QUOTE ]
Now they have the option of starting a new industry of selling Eminem CDs and Shrek 3 DVDs for $1. Printinfg DVDs is cheaper than running a server-farm for poker sites.

[/ QUOTE ] They wouldn't even have to print them... They could just offer a $1.00 download service ala napster.... aka "Antiguaster"

[SmackinYaUp]

And we could gamble with DVD "credits"