Antigua WTO Press Release-US action contrary to purpose of GATS - Page 2

MiltonFriedman · #11 05-25-2007, 12:12 PM

"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 · #12 05-25-2007, 12:26 PM

"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 · #13 05-25-2007, 12:32 PM

[ 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 · #14 05-25-2007, 12:41 PM

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! · #15 05-25-2007, 12:56 PM

[ 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 · #16 05-25-2007, 01:10 PM

Milton,

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

I'll leave it at that.

Grasshopp3r · #17 05-25-2007, 01:29 PM

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 · #18 05-25-2007, 01:34 PM

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 · #19 05-25-2007, 01:45 PM

Okay.

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

tangled · #20 05-25-2007, 01:58 PM

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.