Thursday, September 06, 2007

The Games Goliath U.S. Plays

Did you know that last year Washington stopped American banks and credit card companies from processing payments to online gambling businesses outside the country? I didn't know this until I heard a story on NPR the other day about how the U.S. restrictions are pitting our goliath gaming industry against the small, Caribbean nation of Antigua. The island is a formerly tourist-driven economy, like many countries, struggling to reinvent itself in the face of globalization.

Last month, in a decision that followed a 2005 ruling by the World Trade Organization, the WTO ruled on the online gaming dispute between the States and Antigua, saying that while some disputed laws (including state laws) are "necessary to protect public morals." The argument reminds me of the objections the U.S. government raised when the Pequoit Indians and other tribes discovered gaming as a way to raise their communities up from the mire of poverty that has been caused by the raping of their lands and historic mismanagement of their federal trust funds.

Sadly, the lack of an unambiguous defeat or victory at the WTO in the Antigua case may embolden the Bush administration to suggest only minor changes to federal gambling laws. If this happens, these laws will invariably continue to have an adverse effect on the struggling Antigan gaming industry. The larger countries of the European Union calready have complained about that the U.S. regulations create a trade imbalance with respect to their commerce as well.

Antigua is seeking compensation from the World Trade organization worth US $3.4 billion a year. It is asking the trade body for authorization to ignore copyright and patent laws which it said would hit U.S. firms hard. I'm staying tuned for more on this story, which if not fascinating on its legal merits, is a classic case of an age old moral dilemma, and an unfair imposition of "family values" on a culture that, in my opinion, has already got its values squared away.

Even though the Justice Department believes that Internet gambling is illegal, it's become popular in the last few years - worldwide - as with most other Internet commerce. The industry was expected to collect revenues of between $4.2 billion and $5 billion in 2003, according to a Government Accountability Office study. Meanwhile, as Bush seeks to shut down electronic gambling, his cronies in and around the administration are transfering billions to Antiguan and Bermuda based offshore banking entities without as much as a whisper, a tax credit, or an investment in the progress of those countries.