US Internet Gambling WTO Compensation Negotiations Delayed Again

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Gretchen Hamel, spokesman for the US Trade Representative’s Office, has finally spoken, after Monday’s deadline when settlements were supposed to have been reached between the US and seven different members of the WTO. However, the Internet gambling community will have to stick to the edge of their seats a little longer because Hamel only spoke to announce that the deadline for settlements has been postponed until December 14th of this year.

“Each negotiation is proceeding at its own pace, and some are quite advanced. However, we have agreed to extend the negotiation period for all claimants,” Hamel told Reuters.

“In order to provide all parties with sufficient time to reach a successful resolution, the United States and the claimants have jointly agreed that these negotiations should be extended until December 14,” Hamel continued.

The United States is under heavy pressure from the tiny twin island nations of Antigua & Barbuda, who won their case, and all their appeals, that they brought against the US claiming they were breaking WTO trade violations with their new anti-online gambling laws.

The US then pulled a move unheard of in the WTO, they went in and retroactively changed the GATS, which is basically like signing a contract, then going back to the contract and changing it after all parties have signed.

This action by the US allowed all WTO members the ability to demand compensation from the States. Antigua has since demanded that the US pay up $3.4 billion in the form of suspended copyright laws. Rumors are that the EU has asked for $100 billion per year, but Hamel laughed at that comment.

Hamel also told Reuters that Antigua seems to be the only country that is going after this case full hearted-ly, meaning that they will not settle, they will let the arbitrators settle it.

Antigua believes that because they have beaten the US in several different stages at the WTO, that the WTO will see Antigua’s demands of compensation as justified.

Hamel believes all other nations will settle upon a reasonable solution

US Internet Gambling Regulation Gaining New Momentum

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Here is a list of business issues the United States is dealing with at the moment: the sub-prime mortgage crisis, a plummeting dollar, an imminent recession, rising homeowner’s insurance rates, skyrocketing oil prices, and Internet gambling enforcement. Wait, what? Internet gambling enforcement?

Yes, one of the major pressures on United States banks at the moment is enforcing a law that was sprung on them by former Senate majority leader, Bill Frist, in the closing moments of the 2006 senate session. The Unlawful Internet Gambling Enforcement Act (UIGEA), only endorsed by right wing religious conservatives and attached to an unrelated Port Security Bill, puts the onus on banks to figure out what transactions on the Internet are illegal online gambling transactions, as opposed to legal ones.

Head of the House Financial Service Committee, Congressman Barney Frank, thinks this responsibility for banks to police online gambling is one of the “stupidest” things the United States congress has ever done.

As a result, Frank has announced a spring time hearing to figure out how to solve this issue.

“The banks have a lot of other things to worry about right now,” Frank said, “I don’t think poker should be one of them.”

Frank’s Bill HR 2046, the Internet Gambling Regulation and Enforcement Act (IGREA), currently has 46 co-sponsors and is gaining steam since it was brought to the table in the middle of 2007.

The IGREA would negate the UIGEA by allowing the formation of a regulatory committee to oversee Internet gambling. The UIGEA, which the IGREA is responding to, declares the banks responsible for monitoring illegal Internet gambling. Frank’s bill would also allow state’s to opt out. The Bill will be discussed at the Hearing.

In related news, Representative Jim McDermott this week announced a revised version of his Bill that would see billions of dollars in tax revenue raised from Internet gambling proceeds over the next ten years.

Earlier today iMEGA won its right to fight for their clients first amendment rights, which they believe the UIGEA violates.

Add the state of the United States economy at the moment and you will foresee the formation of a reversal in attitude towards online gambling in the United States.

In 2005 the United Kingdom passed the Gambling Act, which ruled online gambling to be legal and since 2007 the industry has been successfully managed and regulated in the UK. The United States is likely, at some point, to follow their example.

US Gambling Lobby Group Spent $900k in First Half of 2007

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Just a few days after the UK was not-so-shocked to find that Bet365, an online gambling company, gave more than 150,000 pounds in contributions to Gordon Brown’s Labour Party, the US lobbying group, The American Gaming Association, released their reports that declared more than $900,000 was spent lobbying Washington politicians the first half of 2007.

The American Gaming Association represents the majority of the major land based gambling companies in the US, such as Harrah’s Entertainment, Bally Technologies, and MGM Mirage. There are fifty more gambling related companies that the group represents.

All lobby groups in the US are required by federal law to report their spending if their intentions are to influence the executive or legislative branches.

It is unknown what the group has lobbied for, but the amount of money is so great that it makes the Christian lobby groups, who are often seen as the opposing force to gambling groups, seem like nothing.

“The Christian groups spend that amount of money, or more, per year, but their concerns are spread to other issues, whereas the American Gambling Association has one interest in mind,” said Gordon Price, Casino Gambling Web’s gaming analyst.

Expansion of gambling in the US is the concern of the major groups Price was referring to. It is unknown whether the companies would like to see gambling expanded to the Internet, where there has been much heated debate over the past year.

“Some companies are very eager to get their brand online catering to US customers,” said Price, “others may not have realized the potential of the online world.”

Last year it was speculated that land based groups were actually one of the forces behind the passing of the UIGEA, but this year it has been revealed that companies like MGM would be very interested in putting their brand online if the opportunity were to arise.

US Gambling Agreement With WTO Being Challenged In Utah

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Many Americans believe that the US government has been less than truthful on many occasions when dealing with residents of their country. These people now have allies in Utah where lawmakers are concerned about negotiations that took place between the US and the WTO.

Lawmakers in Utah are openly supporting House Joint Resolution 1. These lawmakers are worried that with gambling growing rapidly around the world, that a deal with the WTO could lead to states not having a say in whether gambling is legal within their jurisdiction.

House Joint Resolution 1 ensures that gambling laws be left for individual states to make their own decisions. The other part of the Resolution is where the lawmakers are not trusting of George Bush and his administration.

The second part of the Resolution has to deal with the idea that details of an agreement that was made with the WTO are being withheld. The agreement stems from the US violating WTO regulations involving trade.

Antigua and Barbuda successfully brought a case against the US with the WTO because they claimed the US destroyed their online gambling business. Companies that were licensed in Antigua and Barbuda were stopped from doing business in the US, and because of that, Antigua and Barbuda were hurt financially.

Out of that case came negotiations with the WTO where the US has had to make some concessions for what they have done. The details of those negotiations have been withheld for “national security” reasons.

“This is potentially a very big deal. We were stunned that they classified it as national security and got away with it,” said Peter Riggs, the Director of the Forum on Democracy and Trade.

The concerns of the Utah lawmakers come as talks will begin in 2009 with the WTO. The lawmakers believe individual states should have their say before those talks take place. They are concerned that those talks will lead to legalized online gambling throughout the world, a distinct possibility, according to one observer.

“When the WTO talks resume, there is no doubt that Internet gambling will be one of the main issues. With most countries steadily moving towards legalizing online gambling, an agreement could be reached on the issue involving all the countries of the WTO,” said Jack Trimplet.

UNLV Does Studies and Provides Assistance for Problem Gamblers

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UNLV is one of ten universities in the United States that has on campus help for problem gamblers. The Las Vegas Strip is a short 10 minutes from the campus and poses a unique situation for students, as many venture to the strip for excitement, concerts, nights out and yes, gambling.

A study done by a psychology PhD student Edward Crossman found that approximately 10 percent of UNLV undergraduates who participated scored at pathological levels in his gambling related personality test. Numbers, which he said, are higher than national averages. “For some reason it’s a lot higher here,” he said.

In August of last year, Counselor Education Secretary Larry Ashley started a program to treat problem gambling. The campus-based program is state funded and is open to all area residents, not just students.

Ashley said he is “surprised by the fact that not a single student has come to him for treatment. It’s amazing how many people there are who we don’t know have gambling issues, but younger folks like that edge – they like the rush.”

“That rush,” Ashley said, “has been largely glamorized by the explosion of things such as… televised poker matches.” Things like the televised poker events, Ashley said, “(make) such behavior exciting and more appealing to younger people.” Ashley went on to say, “this can be dangerous, especially when considering how the brains of young people differ from that of their older counterparts.”

Ashley reaches out to local high schools, adding addiction prevention as part of the health curriculum in their classes.

“In all the addictive disorders the developmental factors are critical. Adolescence goes into the mid 20’s for males and the early 20’s for females. The traditional college student is still in that phase. During that time, any of those addictive behaviors can usually impair you faster and more severely,” said Ashley.

Laney College journalism professor and author Burt Dragin, told stories of drinking winning and mostly losing in various casinos. “Gambling was really an emotional thing for me,” Dragin said. “It can be this reward, its really telling you something positive about yourself. But then when it starts going the other way it can be very painful.”

“The emotional investment,” said Ashley, “is something that is common among many compulsive gamblers. We find that most people with problem gambling are escape gamblers; video poker is kind of the ideal thing. It is your own machine; it does not give you any backtalk. You can get hypnotized by it.”

If you are in the Las Vegas area and want more information on the Problem Gambling Treatment Program or the compulsive gambling minor, contact Larry Ashley at 702-895-3935.

 

Unlawful Internet Gambling Act Regulations Released by US Treasury

US Treasury Released UIGEA Regulations The Department of the Treasury has today released the regulations required by the Unlawful Internet Gambling Enforcement Act (UIGEA). The regulations appear to be as weak and confused as the UIGEA.

The regulations require all banking systems to stop unlawful Internet gambling transactions, but state clearly that it is very difficult to figure out what is deemed unlawful as the UIGEA does not make anything illegal that was not already illegal under federal and/or state law.

The new regs point out the complications of implementing a list of what is and isn’t illegal Internet gambling…

“Any government agency compiling and providing public access to such a list {of unlawful gambling sites} would need to ensure that the particular business was, in fact, engaged in activities deemed to be unlawful Internet gambling under the Act. This would require significant investigation and legal analysis. Such analysis could be complicated by the fact that the legality of a particular Internet gambling transaction might change depending on the location of the gambler at the time the transaction was initiated, and the location where the bet or wager was received. In addition, a business that engages in unlawful Internet gambling might also engage in lawful activities that are not prohibited by the Act.”

The fact that the regs point out that certain transactions would be legal in some states, but not in others could be interpreted as the government believing that casino games such as poker, slots, bingo, and blackjack, are actually not illegal under federal law and only illegal in states where laws explicitly say they are illegal. The only betting activity deemed illegal under federal law would be on sports, made illegal by the 1969 Wire Act.

This begs the question, can operators such as Party Poker, and/or 888 Holdings, based legally out of the UK, re-enter the US market while only disallowing bets and wagers from citizens in states where online gambling is expressed as illegal?

Currently, Microgaming powered casinos such as All Jackpots, and The Gaming Club, allow gamblers from all states in the US where Internet gambling is not deemed specifically illegal. Could Playtech branded casinos such as the infamous Golden Palace re-enter the US market now too?

Some analysts also believe it would be difficult to determine what is illegal and not because of the exceptions in the UIGEA for the Horse-Racing industry and state run lotteries.

The beginning of the regs also take some of the fear off the actual gamblers in the United States who were nervous about receiving or sending money to any offshore gambling site.

The regs state that the only people who could be held accountable for breaking any of these regulations (thus breaking the laws created by the UIGEA), or implementing these regulations, would be participants, defined as anyone who is “an operator of a designated payment system, or a financial transaction provider that is a member of, has contracted for services with, or is otherwise participating in, a designated payment system. The proposed regulatory definition clarifies that an end-user customer of a financial transaction provider is not included in the definition of ‘participant’, unless the customer is also a financial transaction provider otherwise participating in the designated payment system on its own behalf.”

The costs of implementing a list by the US government to deem certain transactions as unlawful Internet gambling transactions for the banks to use as a guideline were deemed by the Treasury to be ‘significant’.

“This is because establishing a list would require considerable fact-finding and legal analysis once the U.S. Government identifies a gambling website. The Government must engage in an extensive legal analysis to determine whether the gambling website is used, at least in part, to place, receive or otherwise knowingly transmit unlawful bets or wagers. This legal analysis would entail interpreting the various Federal and State gambling laws, which could be complicated by the fact that the legality of a particular Internet gambling transaction might change depending on the location of the gambler at the time the transaction was initiated and the location where the bet or wager was received,” the regs state.

Just in record keeping alone, the Treasury estimates that it would take 368,254 hours of work to implement these regulations.

The UIGEA, which has been debated as the worst law in United States history, may have been proven to be so with the long awaited release of the regulations for the Act.

The regulations are 52 pages long and can be read in their entirety here.

Stay tuned to Casino Gambling Web for more analysis of the new UIGEA regulations.