WTO: $100B fine over America's barriers to online wagering

Xisiqomelir · Post by **Xisiqomelir** » 2007-10-12 02:00pm

US faces US$100 billion fine for web gaming ban
By Clement James
12 October 2007 07:22AM

A Brussels think-tank has accused the US government of reneging on commitments made to the World Trade Organisation (WTO) over internet gaming.

Panellists at a trade forum levelled harsh criticism at the US, focusing on a burgeoning trade clash between the US and Europe over internet gaming.

The forum believes that the US could be liable for up to US$100 billion in trade concessions to European industries after placing illegal discriminatory trade restrictions on European gaming operators.

The disputed concessions arise from Antigua's victory earlier this year when the WTO ruled that the US violated its treaty obligations by excluding online Antiguan gaming operators, while allowing domestic operators to offer various forms of online gaming.

Instead of complying with the ruling, the Bush administration withdrew the sizeable gambling industry from its free trade commitments.

As a result, all 151 WTO members are considering seeking compensation for the withdrawal equal to the size of the entire US land-based and online gaming market, estimated at nearly US$100 billion.

The European Union, along with India and five other countries, has filed notice that it intends to seek compensation.

"The US decision is a major threat to a rules-based international trading system," said Nao Matsukata, former director of policy planning for the Office of the US Trade Representative.

"If more countries follow the US lead and do the same thing, the entire WTO system could implode and that would be extremely dangerous for US economic interests and for free trade generally.

"Part of what makes the US such a formidable opponent in international negotiations is its credibility. That credibility is now at stake for the US government not just in the trade area but in foreign relations generally."

Lode Van Den Hende, a trade lawyer at Herbert Smith in Brussels, criticised the US for prosecuting foreign online gaming companies while letting domestic online gaming interests operate with impunity.

"This is absolute discrimination against foreign operators that the WTO has found to be illegal," he said.

"It is exactly the kind of practice that the WTO was set up to eliminate, and now the US is violating this very basic principle that it fought hard to put in place at the inception of the organisation."

Glocksman · Post by **Glocksman** » 2007-10-12 02:13pm

The disputed concessions arise from Antigua's victory earlier this year when the WTO ruled that the US violated its treaty obligations by excluding online Antiguan gaming operators, while allowing domestic operators to offer various forms of online gaming.

Isn't it illegal for banks and CC companies to make payments to online gaming sites, regardless of where they're based??

Xisiqomelir · Post by **Xisiqomelir** » 2007-10-12 02:22pm

Glocksman wrote:
The disputed concessions arise from Antigua's victory earlier this year when the WTO ruled that the US violated its treaty obligations by excluding online Antiguan gaming operators, while allowing domestic operators to offer various forms of online gaming.

Isn't it illegal for banks and CC companies to make payments to online gaming sites, regardless of where they're based??

Except for:

-horse and dog racing
-State lotteries
-various other exceptions to UIGEA that were lobbied in by Bill Frist's asshole friends

That is protectionism.

Uraniun235 · Post by **Uraniun235** » 2007-10-12 03:05pm

Yeah, I'm having a pretty hard time getting outraged over gambling protectionism. Oh no, not gambling!

Xisiqomelir · Post by **Xisiqomelir** » 2007-10-12 03:20pm

Uraniun235 wrote:Yeah, I'm having a pretty hard time getting outraged over gambling protectionism. Oh no, not gambling!

Gambling is as much a part of free trade as automotive manufacturing or software design or any other industry. It is a legitimate business which should never have seen interference from the Republican house for their political gain to the detriment of the economy.

Uraniun235 · Post by **Uraniun235** » 2007-10-12 03:34pm

Yeah, political interference in the gambling "industry" (doesn't 'industry' imply that some productive work is being done) sure does damage the economy and society.

Post by **K. A. Pital** » 2007-10-12 03:48pm

I hate gambling and technically I would either outlaw the industry or put it under self control, as one of the pioneers of classic bourgeois economy, William Petty, advocated. Petty said, much unlike current "FREE MARKET" apologists, that gaming addiction is like a form of lunacy, and society should put lotteries and gambling under collective control so that these funds be appropriately re-used in social programs.

Flagg · Post by **Flagg** » 2007-10-12 03:57pm

Is there any real difference between gambling and high risk investments?

Post by **K. A. Pital** » 2007-10-12 04:13pm

Is there any real difference between gambling and high risk investments?

From the gambler's technical perspective, no. From social perspective - yes.

Flagg · Post by **Flagg** » 2007-10-12 04:21pm

Stas Bush wrote:
Is there any real difference between gambling and high risk investments?
From the gambler's technical perspective, no. From social perspective - yes.

What, exactly? I mean casino's pay taxes and employ shitloads of people. What's the problem? You make them illegal and it goes underground, no taxes get paid and employees are just criminals.

Xisiqomelir · Post by **Xisiqomelir** » 2007-10-12 04:29pm

Flagg wrote:
Stas Bush wrote:
Is there any real difference between gambling and high risk investments?
From the gambler's technical perspective, no. From social perspective - yes.
What, exactly? I mean casino's pay taxes and employ shitloads of people. What's the problem? You make them illegal and it goes underground, no taxes get paid and employees are just criminals.

But don't you know it's unproductive and sometimes people sit at tables with no understanding of bankroll theory and variance and they could lose their farms, Flagg?

Flagg · Post by **Flagg** » 2007-10-12 04:34pm

Xisiqomelir wrote:
Flagg wrote:
Stas Bush wrote: From the gambler's technical perspective, no. From social perspective - yes.
What, exactly? I mean casino's pay taxes and employ shitloads of people. What's the problem? You make them illegal and it goes underground, no taxes get paid and employees are just criminals.
But don't you know it's unproductive and sometimes people sit at tables with no understanding of bankroll theory and variance and they could lose their farms, Flagg?

Well of course! We need state run lotteries where your odds of winning are lower than the worst casino table game!

mr friendly guy · Post by **mr friendly guy** » 2007-10-12 10:07pm

Uraniun235 wrote:Yeah, I'm having a pretty hard time getting outraged over gambling protectionism. Oh no, not gambling!

It might have something to do with the fact that you are not missing out on billions of dollars in lost income.

Post by **K. A. Pital** » 2007-10-13 12:38am

We need state run lotteries where your odds of winning are lower than the worst casino table game!

Since losses are unavoidable and they cause real societal harm (gaming addicts suffer monetary losses beyond their possibility of payment, thus crashing families, destroying businesses, losing personal property and "falling" to the bottom), the state should take gambling under control. Technically observation of gambling addicts is a must, at the very least, and their being put in psycho-rehabs on the slightest demand from relatives. Just like junkies.

Out-of-control gambling causes massive social problems. And "they pay the taxes"? Yeah, I feel that good about tobacco companies too. I'm very glad that Philip Morris employs peehpah and pays his taxes, while it's CEOs and shareholders drive their Maybachs which are essentially made from cash on human addiction, suffering and exploiting the worst and most irrational in humans.

Yeah, I'm just a dick for "industries" which are a mockery upon common human sense, I guess.

The Grim Squeaker · Post by **The Grim Squeaker** » 2007-10-13 02:28am

Stas Bush wrote: Yeah, I'm just a dick for "industries" which are a mockery upon common human sense, I guess.

You assume that such a thing as "common human sense" isn't an oxymoron

.

Post by **K. A. Pital** » 2007-10-13 03:05am

You assume that such a thing as "common human sense" isn't an oxymoron

Maybe. I do not see a difference between gambling and financial pyramid scams. Hell, there's not much difference between gambling and Nigerian 101 scam. I don't understand why I should treat one unlike the other.

Uraniun235 · Post by **Uraniun235** » 2007-10-13 04:26am

mr friendly guy wrote:
Uraniun235 wrote:Yeah, I'm having a pretty hard time getting outraged over gambling protectionism. Oh no, not gambling!
It might have something to do with the fact that you are not missing out on billions of dollars in lost income.

What, and Xisiqomelir is?

mr friendly guy · Post by **mr friendly guy** » 2007-10-13 08:02am

Uraniun235 wrote:
mr friendly guy wrote:
Uraniun235 wrote:Yeah, I'm having a pretty hard time getting outraged over gambling protectionism. Oh no, not gambling!
It might have something to do with the fact that you are not missing out on billions of dollars in lost income.
What, and Xisiqomelir is?

I was refering to the companies from the EU, India and other aforementioned countries losing out. You know, the people who the article speaks of complaining to the WTO.

Flagg · Post by **Flagg** » 2007-10-13 08:08am

Stas Bush wrote:
You assume that such a thing as "common human sense" isn't an oxymoron
Maybe. I do not see a difference between gambling and financial pyramid scams. Hell, there's not much difference between gambling and Nigerian 101 scam. I don't understand why I should treat one unlike the other.

Because you can actually make money gambling. Or are you really going to tell me that a fucking internet con is the same as a legitimate gambling operation?

Flagg · Post by **Flagg** » 2007-10-13 08:12am

Stas Bush wrote:
We need state run lotteries where your odds of winning are lower than the worst casino table game!
Since losses are unavoidable and they cause real societal harm (gaming addicts suffer monetary losses beyond their possibility of payment, thus crashing families, destroying businesses, losing personal property and "falling" to the bottom), the state should take gambling under control. Technically observation of gambling addicts is a must, at the very least, and their being put in psycho-rehabs on the slightest demand from relatives. Just like junkies.

Out-of-control gambling causes massive social problems. And "they pay the taxes"? Yeah, I feel that good about tobacco companies too. I'm very glad that Philip Morris employs peehpah and pays his taxes, while it's CEOs and shareholders drive their Maybachs which are essentially made from cash on human addiction, suffering and exploiting the worst and most irrational in humans.

Yeah, I'm just a dick for "industries" which are a mockery upon common human sense, I guess.

Out of control anything causes social problems. People get addicted to MMO's, pornography, and collecting novelty crap. You want to put strict controls on those too? Or are those legitimate 'industries' because they produce a product that can be measured in something other than simple entertainment?

Post by **K. A. Pital** » 2007-10-13 09:37am

Because you can actually make money gambling.

The loss-to-win ratio for participants is just the same as in scam. The difference being a small chance of legitimate win does not excuse the losses. This industry, basically, is a pure speculative operation from beginning to end. Speculative operations are unproductive and in general an unwelcome feature even in real markets.

Out of control anything causes social problems.

In fact, yes. You're correct. Without government certification and control over food industry, junk foods get produced. Without government control in transportation, tariff hijacks and security breaches occur. Et cetera. So what did you want to show here?

Xisiqomelir · Post by **Xisiqomelir** » 2007-10-13 10:23am

Uraniun235 wrote:
mr friendly guy wrote:
Uraniun235 wrote:Yeah, I'm having a pretty hard time getting outraged over gambling protectionism. Oh no, not gambling!
It might have something to do with the fact that you are not missing out on billions of dollars in lost income.
What, and Xisiqomelir is?

I don't think my personal interests and prospects should have anything to do with the legal question.

America is in violation of the the WTO rules it essentially authored on its own. I would have more sympathy for the morality argument if UIGEA wasn't riddled with exceptions for every kind of gambling which could drop some Ks on lobbyists.

Spyder · Post by **Spyder** » 2007-10-13 04:30pm

This just goes to demonstrate the problems with the way the WTO works. There simply will be times where you will need to enact protectionist policies to look after your own national interests. To believe that all countries can simply throw the gates open and not encounter any problems is simply libertarian fantasy.

Wyrm · Post by **Wyrm** » 2007-10-13 07:08pm

Flagg wrote:Is there any real difference between gambling and high risk investments?

The simple answer is that gambling is at best a zero-sum game, whereas an investment (even a high-risk investment) is positive-sum.

In order for you to win some amount in a bet, someone else must lose a comparable amount, so that the sum of all winnings and losses must equal zero (hence the term "zero-sum game"). It's impossible for everyone to win in gambling, and your winning automatically means hurting others financially. When brokers come into the picture, the result is a negative-sum game, as the broker takes his cut of the pool — thus the losses and gains of the participants is negative.

An investment is entirely different in character. Although any investment can tank, for a successful investment which actually pays off, everyone involved receives a gain. It is therefore possible for everyone to win, and the game to actually create wealth instead of merely redistributing it.

Most "gambling = high-risk investment" and "high-risk investment = gambling" nitwits only see the risk and not the payoffs. Don't be one of them.

Flagg · Post by **Flagg** » 2007-10-14 02:38pm

Ok, conceded.

Sorry I didn't respond sooner.