U.S. Partially Settles Internet Gambling Trade Dispute

Radley Balko | December 18, 2007

Unfortunate news:

The United States has reached a deal with the European Union, Japan and Canada to keep its Internet gambling market closed to foreign companies, but is continuing talks with India, Antigua and Barbuda, Macau and Costa Rica, U.S. trade officials said on Monday.

"We are pleased to confirm that the United States has reached agreement ... with Canada, the EU and Japan," Gretchen Hamel, a spokeswoman for the U.S. Trade Representative's office, said in a statement several hours after the EU had announced details of the deal it had reached with Washington.

The decision is a disappointment for European online gambling companies who hoped a case brought by Antigua several years ago at the World Trade Organization gave them a foothold to get back in the U.S. market after being kicked out by Congress last year.

In an April 2005 victory for Antigua, the WTO said a U.S. law allowing only domestic companies to provide horse-race gambling services discriminated against foreign firms.

But rather than open up the U.S. online horse-race gambling market, Congress tightened restrictions on other forms of Internet gambling last year by making it illegal for banks and credit card companies to make payments to online gambling sites.

The Bush administration also announced in May that it was retroactively excluding gambling and betting services from market-opening commitments it made as part of the 1994 world trade agreement, saying that U.S. trade negotiators had made a mistake by not expressly excluding them at the time.

It's too bad Europe, Japan, and Canada caved. Here's hoping little Antigua stays plucky.

A few observations:

First, and most obviously, the U.S. government is so hellbent on policing the online habits of its citizens, it's willing to pay what will likely be tens of billions of dollars of money in trade reparations—taken from same said U.S. citizens in tax receipts—to maintain its dumb ban on consensual online wagering.

Second, the U.S. could have resolved all of this and preserved its precious gambling prohibition by simply making the prohibition uniform. But that wouldn't do. Just as important as the ban on Internet gambling itself were the carve-outs for politically-protected special interest groups. Think state lotteries, or the horse racing industry, which has over the years given generously to the campaigns of people like Kentucky Sen. Mitch McConnell and Virginia Rep. Bob Goodlatte, who decry the immorality of online poker while also supporting carveouts for the ponies. So the tens of billions the U.S. government is paying to settle the trade dispute is not only to preserve the gambling ban, it's to preserve the congressionally-granted monopoly on online wagering for interests with more political clout than poker players.

Finally, U.S. Trade Office flack Gretchen Hamel apparently told Reuters she "isn't going to get into" the terms of the settlement. Pardon? Is the settlement not being paid with public funds? Aren't the people who negotiated the settlement employees of the U.S. government? On what grounds does the U.S. Trade Office feel it's entitled to withhold this information?

Comments

Daniel Negreanu|12.18.07 @ 10:27PM|#

I call.

Juan|12.18.07 @ 10:30PM|#

Virginia Rep. Bob Goodlatte

I'd expect him to be shilling for Starbucks or something...

Brandybuck|12.18.07 @ 10:35PM|#

Sounds like someone trying to come up with a James Bond name, but not quite clear on the concept.

|12.18.07 @ 11:00PM|#

Ah, but just think how happy Jesus will be! Onward Christian soldiers.

|12.18.07 @ 11:07PM|#

On what grounds does the U.S. Trade Office feel it's entitled to withhold this information?

Executive privilege?

PLant Immigration Rights Suppo|12.18.07 @ 11:16PM|#

We should repeal the amendment that gave the federal government the power to ban internet gambling from other nations. What amendment was that again?

Full Toast|12.18.07 @ 11:22PM|#

Ah, but just think how happy Jesus will be! Onward Christian soldiers.

I don't know if you've noticed, but the most vocal proponents of "sin tax" and other behavior-modification programs in the government seem to be the same ones complaining about "religious training" in public schools and promoting other behavior-modification regulations relating to prejudice and wealth distribution. Or maybe that's just me. Big-government religious types are creepy to me because my religious background directed me straight toward libertarianism, but at least that gives me a good footing with them to argue for smaller government. With the religion of leftism, the injustice of government is an end unto itself.

We should repeal the amendment that gave the federal government the power to ban internet gambling from other nations. What amendment was that again?

Interstate (extrastate?) commerce?

LibertyPlease|12.18.07 @ 11:29PM|#

Our employees have gotten out of control. We will have to reign them in soon.....

BakedPenguin|12.18.07 @ 11:34PM|#

Crap like this makes me want to find a bookie to place a bet - just on principle.

Egon|12.18.07 @ 11:44PM|#

On what grounds does the U.S. Trade Office feel it's entitled to withhold this information?

Because they're The Government.

Duh.

|12.18.07 @ 11:45PM|#

PIRS: It's not an ammendment, but a1s8 has the following:

The Congress shall have power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

To borrow money on the credit of the United States;

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

|12.18.07 @ 11:52PM|#

I'm not surprised. Small government, my rear end... it's only small unless some Bible-thumpin' authoritarian takes it in his mind that he needs to scour my computer in the privacy of my own home in order to enforce his morality on my life.

I was an online player, and when Frist slipped this thing in before the '06 elections, it was the last straw. I had been a fairly dependable [R] vote, but no more. I'm all for personal responsibility and personal liberty and small government and all that... what we have in power isn't what they claim.

Bad part is, I don't see any Dems clamoring to overturn this upon taking over in January '09. Even though this is as much a privacy issue as anything else, there's still too much of a stigma to "gambling" for any candidate to openly throw his weight behind it.

LibertyPlease|12.19.07 @ 12:24AM|#

I don't see any Dems clamoring to overturn this upon taking over in January '09. Even though this is as much a privacy issue as anything else, there's still too much of a stigma to "gambling" for any candidate to openly throw his weight behind it.

I'd wager that most of the Dem candidates would leave it in place, not because it's a hot button, but rather because it gives them more control....

|12.19.07 @ 12:38AM|#

Since this whole thing is just about power and influence, why not give a dollar for to a campaign for every $10 wagered, poker players would quickly be the largest lobby on the hill.

Bodog|12.19.07 @ 12:44AM|#

"...there's still too much of a stigma to "gambling" for any candidate to openly throw his weight behind it."

Well, there is one. Yada yada...

Phil Hellmuth|12.19.07 @ 2:16AM|#

Also keep in mind that any relaxation of the internet gambling ban would hurt a major political donor - Indian tribes and the companies that support their casinos. There is no way the Dems will turn their back on them.

Anon|12.19.07 @ 8:43AM|#

This issue has been strangely silent among the Democratic candidates. Oh how noble they are.

Fluffy|12.19.07 @ 8:54AM|#

The Constitution does in fact give the federal government the right to regulate commerce with foreign nations.

But it has done so already, by negotiating our entry into the WTO and then ratifying our participation in it.

Treaties are the law of the land. We signed a treaty that does not allow us to block foreign gaming sites. Now we say we didn't mean to do that. Who gives a shit? It's already been voted on.

I'm no fan of trade agreements superceding national law, but this is a case where I'd be happy to see it happen, if only out of spite. But I guess that there must be some kind of "dumbass crazy Christian law against something sinful" exemption to the general rule that I didn't know about.

|12.19.07 @ 10:17AM|#

As a side note, Kentucky outlaws pretty much all gambling besides horse races, games for charity, and the state lottery. During the last major flareup of a debate, the dialogue went something like this:

"Let's have casinos in Kentucky!"

"Casinos are bad, 'cuz gambling's bad."

"But the whole point of horse racing is gambling."

"OK, how 'bout casinos inside of racetracks?"

Then everyone who felt like gambling at a casino just gave up and drove to Indiana/Tennessee, where there are casinos. In the case of Indiana riverboat casinos, if the boat crosses the Kentucky border (somewhere in the middle of the Ohio River), the owners will be fined several thousand dollars.

Phil Hellmuth|12.19.07 @ 10:43AM|#

I can dodge bullets baby.

x,y|12.19.07 @ 10:47AM|#

if the boat crosses the Kentucky border (somewhere in the middle of the Ohio River), the owners will be fined several thousand dollars.

The boats are effectively affixed to the ground. They don't actually run up or down the river. They just sit there. On the water. So it's ok. Right?

Rhywun|12.19.07 @ 11:20AM|#

"[M]aking it illegal for banks and credit card companies to make payments to xyz" seems to be a new favorite tool for our masters to control our behavior. It's the same way that fuckhead Eliot Spitzer ruined mail-order smokes (after stealing any existing cartons from our mail, that is).

|12.19.07 @ 11:27AM|#

The boats are effectively affixed to the ground. They don't actually run up or down the river. They just sit there. On the water. So it's ok. Right?

Right. Most small minds are unable to grasp the subtle moral disticntions between gambling at a land based casino, and gamblig on a river boat floating pier extension.

This is similar to the protestants that can't grasp the nuanced concept of these being fish.

robc|12.19.07 @ 1:43PM|#

Indiana used to require there riverboats to actually move once in a while. After we (KY) threatened to seize their boat if it drifted across the line, they changed their law. Not a big fine, seizure.

Special note, all of the Ohio River between KY and IN is in KY. Except, after a long fight, SCOTUS determined it as the location of the river in 1792. So, there are only a few locations on the river Indiana can put a riverboat.

Also, a few years back, one of the KY state reps suggested the state buy a decommissioned sub and use it to patrol the river for rogue riverboats. Seriously, he wasnt kidding (much).

|12.19.07 @ 4:04PM|#

Very to-the-point article, thanks for posting it.

|12.19.07 @ 4:21PM|#

robc,

I thought that was a case that Abe Lincoln argued before the SCOTUS...or was that the Illinois border? In any case, isn't the border supposed to be in the exact center of the river?

|12.20.07 @ 12:27AM|#

g|12.20.07 @ 10:20PM|#

If you don't like representatives opposed to online gambling, you can vote them out. But what exactly is our recourse when an outside organization tries to tell the US what to do based upon the anger of...Antigua. Give me a fucking break. However, it comes as no surprise that the hypocrites at Reason have no comment concering a violation of American sovereignity.