Online Gambling: A Lost Cause? (4 of 8)

In my previous blog I mentioned the blitz the DoJ launched on the online gambling community has placed companies in a position of fight of flight. Regardless of the likelihood of these charges sticking, their all-out attack has completely frozen their ability to have a chance of success in the future. The company assets were frozen, their clients have stopped investing, and investors have fled. PokerStars for example was liquid enough to reach a settlement with the DoJ and settle with their U.S. players to close out whatever balances they had in their accounts.[1]By doing so, they secured the opportunity to continue to operate successfully outside the U.S. even though they are facing similar charges in Australia. Not so fortunate, Full Tilt was unable to settle with their players and the DoJ as a result of improper accounting practices.[2]Gambling regulators outside the U.S. revoked their license for misleading players signaling the end of their business. The Alderney Gambling Control Commission on the British Channel Islands were the ones to revoke their license.

Poker sites aren’t the only ones facing difficulties in the international community. The U.S. is in conflict with the World Trade Organization to the extent they have ruled U.S. statutes contradict international gambling agreements. With the ability of the internet to make business dealings worldwide, many online poker rooms hold licensure and host their servers in Antigua and Barbuda. These  islands ask the World Trade Organization to investigate the validity of domain seizures by the DoJ and the indictments against  the executives of these sites. Mark Mendel, who works as an advisor to these islands, said “I don’t think there’s another country in the world that puts people in jail for engaging in trade that’s lawful under international law… It’s as if Antigua would put Americans in jail for selling pineapples.”[3] In the past, the World Trade Organization has already ruled against the U.S. regarding gambling when they prosecuted foreign online gambling sites.[4]However, the U.S. acting like normally do in politics still went on with what they wanted to. They ignored the ruling and did not change their stance. What should the U.S. do when the World Trade Organization is telling them to legalize or at least not actively prosecute these online poker sites? If nothing, what should poker players and gamblers do?

The UIGEA has also been condemned by European Union officials for violating free trade agreements between the U.S. and Europe.[5] The European Commission made a report that found U.S. anti-gambling laws contrary to free trade covenants.  The pressure is out there internationally for the U.S. to revise gambling codes but nothing has changed. What should be the role of the international community with gambling domestically? It won’t be long till intra-state gambling sites pop-up, but how about going back to the status quo?




~ by davidghassan on November 6, 2011.

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