SOURCE: www.businessweek.com

Pro: It’s Prohibition All Over Again by Martin Owens, Gaming-Issues Attorney

The passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) in October has led Antigua, which had previously sued America in 2003 before the World Trade Organization over the issue of Internet gambling, to seek relief before the world body once more.

Chief among Antigua’s claims was that U.S. laws against Internet gambling constituted a trade barrier in violation of trade obligations.

American intransigence on the issue prompted the WTO to clear Antigua to collect $7 billion, and the fallout from this dispute could ultimately cost the U.S. tens of billions of dollars, as claims from major trading partners pour in, most notably from the European Union, Japan, India, and Canada.

The U.S.’s actions are blatantly unfair, considering that the U.S. ranks as the single biggest instigator of WTO claims against unfair trading practices.

The U.S. stands virtually alone in its uncompromising stance against Internet gambling, a position that is writ large by UIGEA and its actions at the WTO. The attempts to ban Internet gambling are misguided and unproductive, and will do nothing to protect responsible adults.

Far from being deterred by the Internet gambling ban, U.S. consumers are easily doing an end run around it, because their enthusiasm for online gambling has not waned. Regulation, not prohibition, is in the best interest of consumers.

A ban does little except steer individuals to unscrupulous online gambling outfits that operate in the shadows of the industry and may well take advantage of the most vulnerable players.

The U.S. Justice Dept. has gone out of its way to undermine legitimate and licensed Internet gaming operators worldwide. Officers and board members of Internet gambling companies vetted and approved for trading on London markets—and underwritten by some of the globe’s most respected financial institutions—have been taken into custody while on U.S. soil.

And U.S. authorities have arrested online-payment company executives on specious charges of money laundering.

It remains too early to tell how much this untenable war against Internet gaming will cost the U.S. in trade flows, innovation, and moral authority.

But it is perfectly clear that it is time for America to stop pretending that the rule of law is a one-way street.

Pros, Cons