Two members of the World Trade Organization (WTO) this week announced to the United States their intentions to seek compensation via the WTO for last year's ban on foreign gambling sites.
Following the lengthy WTO dispute between the United States and the Caribbean nation of Antigua and Barbuda (Antigua), the WTO Dispute Settlement Body ruled in March that U.S. online gambling laws violated international trade agreements. In response, the United States announced it would remove gambling altogether from it commitments to the General Agreement on Trade in Services (GATS), opening itself up to claims for other countries seeking compensation.
Antigua today informed the WTO that it would also seek compensation from the United States through the suspension of its obligations regarding U.S. copyrights, trademarks and industrial designs and patents, worth an estimated $3.44 billion, annually.
Meanwhile, the European Union on Tuesday said it would seek concessions to open up other trade sectors with the United States, which would likely not result in gambling sites being allowed back into the U.S. market, but would make up for benefits lost when several European companies were forced out of the U.S. market after the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA).
Furthermore, at least three additional WTO members are expected to file compensation claims.
Jeffrey Sandman is the spokesman for the Safe and Secure Internet Gambling Initiative (SASIG), which accompanies Rep. Barney Frank's, D-Mass., Internet Gambling Regulation and Enforcement Act. He said the demands from the European Union and Antigua clearly demonstrate the need for Internet gambling regulation in the United States.
"Today's announcement provides further evidence that the United States must address the hypocrisy in the way it treats Internet gambling," Sandman said. "Right now, it is legal to place online bets on horse racing in the United States, but not to wager on poker, pinochle and other activities.
As far as the SASIG is concerned, the United States is left with limited options.
"It either faces paying billions in trade compensation to other countries for not complying with WTO trade agreements and affecting U.S. industries which have no involvement with gambling in the process, or, alternatively, the United States could regulate Internet gambling, allowing for a level playing field among domestic and non-U.S.-based Internet gambling operators," Sandman said. "We support the European Union's effort and hope it will serve as a wake-up call for lawmakers that regulated Internet gambling is needed to bring the United States into compliance with the WTO, avoid affecting unrelated industries, better protect consumers and generate billions of dollars for important government programs."
The Poker Players Alliance (PPA), a San Francisco-based grassroots group advocating on behalf of U.S. poker players, has also voiced its support of the European Union.
Alfonse D'Amato, former senator from New York, avid poker player and PPA Chairman, said in a prepared statement that the U.S. government's actions have set a dangerous precedent.
"Last year Congress and this President moved in the wrong direction by approving the UIGEA, which among others things, violates the United State's WTO commitment on gambling and betting service [sic]," D'Amato said.
The PPA supports Frank's bill, as well as the bill recently introduced by Rep. Robert Wexler, D-Fla., which clarifies existing law and creates an exemption for poker and other games of skill.
"The PPA believes there is a simple solution through the regulation of on-line gaming," D'Amato said. "Rather than allowing this trade dispute to continue to be played out on the world stage, the U.S. Congress should pass the Internet Gambling Regulation and Enforcement Act of 2007 introduced by U.S. Representative Barney Frank.
"The Frank bill provides enforcement of strict regulations and licensing of Internet gaming and brings the United States more into compliance with its WTO commitments under the General Agreement on Trade and Service, " he continued. "Regulation of this industry is the only sensible public policy and trade policy solution. Moreover, it will generate significant revenue for the United States by simply allowing individuals a freedom they rightly deserve. If our government continues to ignore its trade commitments we will threaten other U.S. industries, not related to Internet gaming, that rely on consistent trade policy and we may be in jeopardy of forfeiting a lead role among the WTO member community."