Online Casino News and Information

U.S.and Antigua battle over WTO sanctions for U.S. ban on Online Gambling

Along with the iMEGA battle, WTO and iMEGA feel very confident over the win of both battles.

GENEVA - The United States estimates that its Internet gambling restrictions have only cost Antigua and Barbuda $500,000 in annual lost revenue - a figure the tiny Caribbean nation’s chief counsel flatly rejected Friday.

Antigua, the smallest country to ever win a World Trade Organization case, is seeking the right to impose $3.4 billion in commercial sanctions against the U.S. for its failure to comply with a ruling on its online betting ban.

Washington stopped U.S. banks and credit card companies last year from processing payments to online gambling businesses outside the country.

The decision closed off the most lucrative region in a market worth $15.5 billion. About half of the world’s online gamblers are based in the United States.

In March, the WTO upheld the U.S. right to prevent offshore betting as a means of protecting public order and public morals. But it said it was illegal to target online gambling, without equally applying the rules to American operators offering remote betting on horse and dog racing.

After losing the WTO case, Washington declared its intention to explicitly remove Internet gambling from its obligations under the WTO’s treaty on trade in services. Australia, Canada, Costa Rica, India, Macau, Japan and the 27-nation European Union have all joined Antigua in filing compensation claims as a result, under a procedure that is separate from the U.S.-Antigua sanctions arbitration.

Antigua, which was hurt by a series of hurricanes in the late 1990s, had been promoting electronic commerce as a way to end the country’s reliance on tourism. There are 32 licensed online casinos in the former British colony, employing 1,000 people and generating yearly revenue of about $130 million. Seven years ago, its casinos had an annual income closer to $1 billion.

Antigua is confident the WTO will rule in its favor again.

“That’s the typical position the U.S. has taken to Antigua in this case, but we’ve proven them wrong in every instance,” Mark Mendel, the lawyer who masterminded the twin-island’s legal victory, said of the U.S. claims.”It’s completely without any basis whatsoever. We feel very confident that it will be quite easy to demonstrate that.”

Mendel told The Associated Press that he would meet with U.S. trade officials and WTO arbitrators next month in Geneva. After that, it will be up to the arbitration panel to decide whether to authorize the second-highest sanction in the body’s 12-year history.

The United States said in a submission to the WTO dated Sept. 19 that Antigua’s estimate of impairment from the U.S. online gambling restrictions was “wildly disconnected” from economic reality. The $3.4 billion is nearly four times Antigua’s entire gross domestic product and a thousand times greater than any real effect to the country’s economy, the U.S. said in the 22-page document.

EU online gambling sites - which largely bankrolled Antigua’s legal efforts - have claimed the U.S. owes the European Union a jackpot of up to $100 billion in trade concessions to compensate for its illegal ban on foreign gambling companies.

Watch here as we keep you informed of WTO, UIGEA, Barney Frank, and iMEGA as they battle it out with the U.S.

iMEGA ONLINE GAMBLING HEARING RESULTS

The hearing ended today but the final decision is yet to come!!

Today in Trenton, New Jersey the Honorable Judge Mary L. Cooper heard arguments for a temporary restraining order to halt the enforcement of the UIGEA (Unlawful Internet Gambling Enforcement Act).

The hearing ended at 10:35 am Eastern time this morning. Judge Cooper determined that “this was a case against a complicated backdrop” and would require her to review the case further over the coming weeks. No decision was made from the bench today.

iMEGA’s legal team said they felt very confident after today’s hearing.

Jacqueline Coleman Snead, Attorney representing the U.S., was said to have seemed “intimidated” at times. She sat alone in the court room while the iMEGA team arrived with two powerful attorneys and it’s organization representatives. The government was less than commanding in it’s performance.

The Honorable Judge Mary L. Cooper aggressively challenged the U.S. government and it’s Motion to Dismiss.  The U.S. Government repeatedly claimed that iMEGA did not have the legal standing to argue the first amendment law, also stating that the first amendment law did not apply to this case.

Jacqueline Coleman Snead (U.S. Attorney) also claimed that the UIGEA was not intended to prosecute American citizens for betting online and that therefore no U.S. citizen would be adversely affected by this law. iMEGA’s attorneys refuted this and pointed out that the civil portion of the law mentions “any person” could be prosecuted.

iMEGA is seeking judgment restraining the U.S. from enforcing the UIGEA (Unlawful Internet Gambling Enforcement Act) of 2006, through it’s complaint iMEGA versus Gonzales. The current law prevents U.S. credit card companies and banks from processing payments to online gambling companies.  According to the Act, violators are subject to civil and or criminal penalties including imprisonment.

iMEGA feels that the law, if allowed to stand, would create a bad precedent that would chill innovation and growth of e-commerce by U.S. firms, and permit the flow of jobs and Internet firms out of the U.S. to avoid stifling the laws.  In the case of UIGEA, iMEGA believes that the embrace of readily available, commercial technology can help remedy the social ills of underage and compulsive gambling, as well as fraud, far better than this law.

iMEGA is accepting individual and corporate member in its trade association, as well as donations to the iMEGA Fund.  Which goes towards the work needed to keep the Internet FREE, open and innovative.

iMEGA believes that the hearing went well today and that could very well mean good news. They said “they feel very confident after today’s hearing.

You can read more about iMEGA here.

Government Responds to iMEGA’s TRO Request and made the deadline just in time.

iGaming Law Challenge:

Brief by US Attorneys breaks no new ground, denies potential legal jeopardy exists for iMEGA members.

Pushing its time right down to the limit, the US Department of Justice, on the behalf of the other two defendants (Federal Trade Commission and Federal Reserve) just made the deadline of Sept. 21st that was set by Hon. Judge Mary L. Cooper (3rd District/Trenton division) for submitting a response brief, addressing the request by iMEGA’s legal team for a temporary restraining order (TRO) against the Unlawful Internet Gambling Enforcement Act (UIEGA), as part of our suit to have that law overturned and declared unconstitutional.

The brief opposing the TRO request essentially repeats the defendants’ arguments in their motion to dismiss our suit (iMEGA v Gonzales, et al), on the grounds that iMEGA lacks sufficient standing to bring its complaint, and that - even if that were not the case - that the law is (in their opinion) “unripe” for challenge, due to the government’s missing the deadline of 270 days from the signing of the law (Oct. 13, 2006) to provide the necessary regulations for enforcing the law. This amounts to the government trying to have it both ways - insisting that the law cannot be challenged due to its failure to meet the requirements of the law.

The first hearing in the U.S. District Court of New Jersey in the case of iMEGA versus Gonzales will be held, Wednesday, September 26th. The Honorable Judge Mary L. Cooper will hear oral arguments on iMEGA’s petition for a TRO (temporary restraining order) against the implementation of the UIGEA (Unlawful Internet Gambling Enforcement Act), as well as the Governments motion for dismissal.

Even though the DoJ (Department of Justice), Federal Reserve, and Federal Trade Commission barely made the deadline to file their response. All implications at this time are pointing to a victory for iMEGA. Although nothing can be definite until it is ordered and in writing.

Our resources will have some interesting news on the case shortly. Stay tuned right here to find out what the outcome of iMEGA versus Gonzales will be.

To read the Response to Defense Motion to Dismiss click here.

Online Gambling Trade Dispute between U.S. and Antiqua

Small nations are proving they can wield large digital sticks.

Antigua is better known for sandy beaches than international trade disputes. But next month this tiny Caribbean resort destination could compel the United States to legalize an industry that the Bush administration has been trying to eradicate since the beginning of the president’s first term. Antigua—with a population of just 70,000 and a GDP of under $1 billion—could force the United States to embrace online gambling.

The ruling, which the WTO is expected to begin enforcing next month, could oblige America to overhaul its prohibitive stance on online casinos, not just in relation to Antigua but to a host of others—including the EU, Japan and Australia. That would double the size of the $15 billion-a-year online gaming industry almost overnight, says the Safe and Secure Internet Gambling Initiative, a pro-gaming consultancy. And since the WTO might allow nations that have been hurt by U.S. gaming laws to flout American intellectual-property law in response, the dispute is already spreading to Hollywood, Silicon Valley and beyond.

The story dates back to 2003, when Antigua sued the United States at the WTO over America’s prohibition of online casinos, which is the island’s second largest industry, after tourism. The United States allows a number of domestic betting companies, like the horse-racing Web site YouBet.com, to offer online gambling to Americans (these are thrown into the odd basket of legal gaming operations that include Native American-run casinos and riverboat gambling). But foreign firms are prohibited from offering exactly the same type of service to U.S. citizens.

The American government requires foreign sites to block U.S. users by checking the Internet protocol addresses of their computers, a requirement that has been honored mainly in the breach, given that Americans represent some 60 percent of world online-gaming revenue. Last October, President George W. Bush upped the ante by signing a new bill preventing banks and credit-card companies from processing payments by American users of overseas sites. The result: top companies like Gibraltar-based PartyGaming (once worth $8.4 billion) saw the value of their stock sliced in half, and their revenues plunge by 70 percent. The U.S. government has arrested a number of foreign online-gaming execs, charging them with gambling-related offenses. In March, the London-based Web site Sportingbet.com was forced to pay the state of Louisiana $400,000 to settle charges levied against its chairman, Peter Dicks.

But that same month, the WTO decided that the U.S. approach was an illegal form of trade protectionism. The ruling may be enforced as early as next month. “I was laughed at when I first brought the case,” says Mark Mendel, the long-haired, 51-year-old Texas lawyer who represented Antigua. “They totally underestimated me.”

More important, the United States underestimated the remarkable power that even tiny countries wield in today’s digitized global economy. Usually, when trade laws are broken, the WTO allows export sanctions to be imposed on the violating nation. But since Antigua hardly has the muscle to bring any meaningful sanctions against the United States, trade experts expect that the WTO will likely take another approach and allow Antigua to flout intellectual-property law.

If America doesn’t fold on gaming, next year Antiguans could well be selling billions of dollars of legally pirated copies of everything from Microsoft software to Disney movies without paying the copyright owners a penny. “Intellectual property is the perfect sanction item,” says Nao Matsukata, a former senior trade official for the United States. “It gives small countries like Antigua absolute leverage.” The WTO has allowed the use of IP as a stick once before, in the famous EU-Ecuador banana squabble (the threat of it was enough to make the EU cut a deal). But experts expect it will become common policy in the future, and see online gaming as a test case for its effectiveness.

It’s no surprise that lobbyists from Silicon Valley and Hollywood are now storming Capitol Hill, pushing for a deal. Last month the Motion Picture Association of America urged the U.S. trade representative to negotiate with Antigua in order to prevent bootlegging. But the Bush administration is staunchly refusing to bend on virtual gaming. The (surprisingly weak) legal line is that America never intended to include gambling under its WTO obligations, which were signed in the mid-1990s. “It is ludicrous [to assert that] our negotiators would have intentionally turned 40 years of criminal law against this type of gambling on its head,” says U.S. Deputy Trade Representative John Veroneau.

No dice, says the WTO. “The United States has a legal commitment; they can’t just say ‘oops’ and be done with it. What kind of precedent would that set?” asks one WTO insider, who spoke on condition of anonymity because he did not want to be quoted discussing an ongoing case.

Ultimately, this leaves the United States with a very weak hand to play. It could continue to deny that the WTO has legislation over its internal gambling laws. But that would undermine the overall credibility of the organization by showing it to be unable to enforce its rulings—and America needs a strong WTO to mediate prickly conflicts with, say, China, over things like Internet censorship and the mass manufacturing of fake designer goods.

Eight other WTO members, including the European Union, Australia and Japan, are now lining up to claim compensation from the United States over online gaming. “The EU is almost licking its chops,” says Antigua’s lawyer Mendel. “In total, this could come to $100 billion in sanctions. ” Giant American bricks-and-mortar casinos like Harrah’s and MGM are making plans to move into the online sector as soon as the U.S. trade stance becomes clear.

They could get a sign as early as this week. Sept. 22 is the first WTO deadline for America to cut a deal with Antigua and the other nations. But one WTO insider predicts that the only announcement on that day will be that the deadline has been extended. “This won’t happen fast; America is going to dig its heels in,” says Sallie James, trade-policy analyst at Washington’s Cato Institute. “But if I had to bet, I would say that by this time next year America will have changed its laws.” And in this case, that means all bets will be on.

Good news for America? As our resources say: “It has surely made a huge influence on the situation, with the U.S. decisions.” We will wait to see the outcome, with only a few days left before the deadline for answers to iMEGA and the UIGEA, from the Department of Justice.

The National Gambling Amendment Bill, was introduced by the Department of Trade and Industry (DTI) and is designed to legalise Internet gambling. It provides legislation to license interactive gambling activities.

The bill requires software vendors who provide online gambling platforms to obtain a national licence for key staff, the interactive software, related equipment and the suppliers and maintenance providers of that equipment.

The DTI says the bill will protect players, make sure gambling revenue is taxed, keep online players in South Africa and preclude children from playing online.

The department stated that banning online gambling will only drive it underground. Therefor it is not following the course the US set for itself.

The Interactive Media and Entertainment Gaming Association (iMEGA) has responded to the US Department of Justice. The DoJ  had filed a motion to dismiss iMEGA’s complaint against the Unlawful Internet Gambling Enforcement Act (UIGEA).

The DoJ, the Federal Trade Commission and the Federal Reserve argued that iMEGA does not have the standing to challenge UIGEA. The argument is that, because rules and regulations have not yet been created for the new act, UIGEA is “unripe” and  the challenge is not applicable.

iMEGA responded by pointing out that under UIGEA its members are facing the treat of prosecution,  and that it is not necessary to wait until a member is prosecuted before challenging the act.

The DoJ, the Federal Trade Commission and the Federal Reserve have to respond by 21. September 2007.        

iMEGA Responds, Contests U.S. DoJ Dismissal Motion in UIEGA Challenge

Association legal team demonstrates our case for standing and potential harm to our members through bad law!

In accordance to the deadline set by Judge Mary L. Cooper, today, iMEGA’s legal team filed its brief with the U.S. District Court in New Jersey, Trenton Division, in response to a U.S. Department of Justice motion to dismiss our complaint against the UIGEA (Unlawful Internet Gambling Enforcement Act).

The defendants, U.S. Department of Justice Federal Trade Commission and Federal Reserve, contend that iMEGA does not have requisite standing to bring a complaint versus UIGEA, and were given rules that regulations for the new law have not yet been created, that the law is “unripe” for this kind of challenge.

In iMEGA’s response brief, attorneys provided ample precedent for both their standing as a trade association acting on behalf of their members, and for the potential jeopardy of prosecution the new law puts some of their members in.  They contend that it is not necessary to wait for one of their members to be prosecuted before the law may be scrutinized by the courts.

The brief also highlights the heretofore unexamined jeopardy that affiliate marketers who live and operate in the U.S. may be in due to the UIGEA.

The defendants have until September 21st to respond to iMEGA’s request of the court for a temporary restraining order, preventing UIGEA from being enforced before their complaint can be properly heard by Judge Mary L. Cooper.

iMEGA has become a very powerful source and they are accepting individual and corporate members in its trade association.

What is iMEGA?  An association dedicated to the continued growth and innovation of the Internet.

Watch games and casino as we keep you updated on iMEGA and the UIGEA.

BARNEY FRANK GETS ANOTHER CO-SPONSOR TO REGULATE ONLINE GAMBLING
Barney Frank continues to get more political co-sponsors for the IGREA (Internet Regulation and Enforcement Act).

Democrat C. Scott from Virginia signed to give his support to the latest Frank bill, that seeks to legalize and regulate online gambling in the U.S.

Scott who servers on the Committees for the Budget, Education and Labor, and the Judiciary, also serves on: Crime, Terrorism and Homeland Security, Early childhood, Elementary and Secondary education, Higher education, Lifelong learning and Competitiveness, and Constitution, Civil Rights and Civil Liberties.

Scott brings the list of co-sponsors for Barney Frank’s bill to a total of 36, which is making progress from the origin.

Congressman Scott is serving his 8th term as a representative for Virginia. He is also on record as voting against the UIGEA (Unlawful Internet Gambling Enforcement Act) last year, when it was rushed through the House of Representatives under questionable circumstances, which was attached to a completely unrelated port security bill.

New York Democrat Congressman Eliot Engel is the latest to sign a similar bill, which is Congressman Robert Wexler’s bill, the SKPA (Skill Game Protection Act), which seeks to classify and legalize poker as a game of skill. Engel also refused to be stampeded into voting for the UIGEA last October. He is among 11 Congressman who support Wexler.

Engel serves on three subcommittees for Foreign Affairs, a member of the Energy and Commerce Committee, as well as the influential Telecommunications and Internet subcommittee under the Energy and Commerce Committee.

Watch here for the latest news on Barney Frank as well as UIGEA and iMEGA.

U.S. Representatives Call for LIFT of the Gambling Ban

September 6, 2007

This could very well lead to the ‘lift’ of the gambling ban for the U.S.

U.S. Representatives Steve Israel (Democrat) and Pete King (Republican) representing Long Island, New Jersey have recently submitted an editorial to the New York Post, calling for an end to the “misdirected… also probably unenforceable” ban on Internet Gambling in the US.

Under “Web Gambling: Tax, Don’t Ban” they promote instead The Internet Gambling Regulation and Enforcement Act, which uses fines and revokes licenses for web sites that don’t sufficiently police against improper use by minors or problem gamblers. As reported last April, the act was introduced by the chairman of U.S. House Financial Services Committee, Barney Frank.

Israel and King feel the Act would “create a regulatory framework that ensures operators are licensed and protects consumers against underage gambling, compulsive gambling, money-laundering, identity theft and fraud”.

As reported in the Cleveland Leader, the fear is that the ban may lead to people gambling without legal or technological protections which could potentially protect them against fraud and ensure age-verification.

Israel and King refer to Britain’s legal and regulatory framework as an example, where age verification technology checks ensure that gamblers are of age and are not problem gamblers and watch lists work to prevent money-laundering.

A strong comparison is made between the music industry ignoring consumer demand for online song access and the subsequent blossoming of a massive piracy industry, and the U.S. ban pushing “the business off U.S. shores and out of the hands of scrupulous businesses”, where it’s more difficult to enforce protection for the player.

Their call, as the Cleveland Leader points out, could well be heard coming up to election time in 2008. With co-sponsorshop by both a Republican and Democrat representative, the bill seems to be in with a chance of success. We’ll wait and see.

Could this mean the UIGEA may be lifted by 2008?

Watch this section for the latest news on Internet Gambling.