Arbitrators to settle Antigua, U.S. dispute

[bigboydan]

This should be interesting to see how this one plays out.

Arbitrators to settle Antigua, U.S. dispute
By Sarah Polson

Antigua and Barbuda officially submitted its request for $3.44 billion in compensation from the United Stated to the World Trade Organization this week. The amount is what the tiny island nation believes will make up for the loss of online gambling revenue from the United States.

The United States and Antigua and Barbuda have been locked in this battle for years now in the WTO dispute. Antigua and Barbuda had the trade regulation body look into U.S. policies for online gambling because it believes the country is violating trade regulations.

The WTO ruled in favor of Antigua and Barbuda in 2005, stating that U.S. online gambling laws that restrict or ban the business violate trade regulations it agreed to when joining the WTO.

When the United States didn't change its laws to comply with the ruling, and then also further restricted online gambling by passing the Unlawful Internet Gambling Enforcement Act (UIGEA) late in 2006, the WTO once again issued a report in early 2007 saying the nation was still not in compliance.

That ruling opened up the option for countries to seek compensation from the United States for the damage done to the online poker, casino and sports betting operations that run from within their borders.

Antigua and Barbuda is a centre for offshore Internet gaming operations, attracting large numbers of U.S. residents to its online poker, casino, and other betting games and services.

According to Forbes, Antigua has been promoting gambling and other kinds of Internet commerce to move the country away from relying so much on the tourism industry.

There are 32 online casinos licensed in the nation, which employ about 1,000 people and generate around $130 million in annual revenue.

Though tiny, the Caribbean nation was hit hard as at least one of the major betting operations on its soil was forced to shut down its U.S.-facing business and also faced prosecution in the United States.

However, the United States has already responded to the $3.44 billion compensation claim saying it is "patently excessive."

"In particular, the level sought by Antigua and Barbuda is several times higher than Antigua and Barbuda's annual Gross Domestic Product of all goods and services," the United States said in a statement in a WTO Dispute Settlement Body meeting.

The country lodged an arbitration request this week objecting to the level of sanctions being asked for and procedural issues.

While the U.S. "accepts" the outcome of the WTO rulings, it is also working to change its agreement with the WTO to exclude online gambling.

According to the Caribbean Net News, a trade source said the arbitration process normally takes about two months.

Because Americans account for 80% of the estimated $12 billion generated by online gambling around the world, the nation may also face sanctions from other countries. Several have already shown their support for Antigua and Barbuda and announced their intentions to seek compensation as well.

Australia, Canada, Costa Rica, European Communities, India, Japan and Macao have all said they plan to seek compensation.

[tblues2005]

That should be interesting to see what comes out of this.

[RickySteve]

The US will intimidate/bribe/blackmail the arbitrators. Even if they were to award Antigua the full settlement, the US will still ignore it. There's nothing that can be done unless the EU is ready to wage economic war over this.

[remmy358]

there is a simple solution to BS like this: legalize gambling in the states, set up OTB / casino like operations and regulate it. DONE. i still think some people would still want to play online becuase 1) tax and 2) better lines/limits/bonus's, etc.

but it would solve a lot

[DarthV]

The US will intimidate/bribe/blackmail the arbitrators. Even if they were to award Antigua the full settlement, the US will still ignore it. There's nothing that can be done unless the EU is ready to wage economic war over this.

This is a very good analysis of what is really going to happen.

And the EU won't wage economic war over this or anything else.

[bigloser]

But there are counties that will

[Omnivorous Frog]

WTO? They are going to make the US pay what? This is laughable, as I just don't see Uncle Sam even reaching for his wallet here. Maybe a sword, or a gun hidden in his coat. I lost my little remaining faith long ago in our government to do the right thing.

[bigloser]

Antigua have applied to suspend their obligations to the WTO in respect of the US
If granted (and it will be), they can legally start copying Microsoft software etc.

Of course Uncle Sam wont dig into his pocket he will back down.

US has too much to lose on this

[20Four7]

If copywrite protection gets suspended the us will lose billions. bill gates alone will fight that. Never mind all the artists that produce music etc.

I say **** the USA every way you can. Uncle sam wants to rule the world they can deal with the consequences.

[Dandy Lion]

If copywrite protection gets suspended the us will lose billions. bill gates alone will fight that. Never mind all the artists that produce music etc.

I say **** the USA every way you can. Uncle sam wants to rule the world they can deal with the consequences.

There are 60,000 people in Antigua. They can copy Microsoft software and sell it to each other for $1.50 until they are blue in the face and it won't mean bugger all for difference. There is some idiotic idea afoot that Antigua can copy Microsoft software and sell it outside its borders in foreign places. That is complete bullshit, although I do wish it was true.

Practically all countries are signatories to copyright laws because they are in their mutual interests. If this scenario ever came to pass, the only place Microsoft's copyright would be useless would be in Antigua. Every other country would still hold the Microsoft copyright to be valid because their law requires them to. They did not win at the WTO, only Antigua did. There is nothing for instance that allows Canada to suddenly start allowing the import of Antiguan copies of Microsoft software. Only Antigua can ignore the copyright laws on Antiguan soil.

And it works both ways. Every country has an interest in having other countries recognize their copyrights. Any country which allowed Antiguan software with Microsoft copyright to be sold in that country would immediately see the US ignoring all of their copyrights, and as well, all of their patents.

Even importing a copy bought in Antigua could get you charged in Canada, because Microsoft's copyright is still good as gold here and every other country in the world. Except Antigua.

And who cares about them. Certainly not the US.

[Dandy Lion]

If copywrite protection gets suspended the us will lose billions. bill gates alone will fight that. Never mind all the artists that produce music etc.

I say **** the USA every way you can. Uncle sam wants to rule the world they can deal with the consequences.

Not that I don't agree with your sentiments 20Four7.

[Justin7]

Dandy,

I don't think it is that clear cut. If sanctions are entered, the purpose will be to allow Antigua to profit however much it lost from illegal US actions. If the Copyright sanctions were limited to Antigua, it would be impossible to make them whole.

Do you have a legal source backing what you've suggested? I ask because you are the first person to forward this idea.

[Dandy Lion]

Dandy,

I don't think it is that clear cut. If sanctions are entered, the purpose will be to allow Antigua to profit however much it lost from illegal US actions. If the Copyright sanctions were limited to Antigua, it would be impossible to make them whole.

Do you have a legal source backing what you've suggested? I ask because you are the first person to forward this idea.

I may be the first person to forward this idea, but I doubt there is a single lawyer anywhere in the Western speaking world that would disagree with my analysis. Even Antigua's lawyer, Mendel, isn't going to say that you are going to see Antiguan manufactured boxes of Microsoft Office appearing on shelves in say, Holland.

Copyrights and patents are at the basis of much of human progress because they encourage and reward innovation. Without protection of these features of international law, innovation would stop because there would be no point of innovating. In fact, there would be no point of the WTO, because there would be very little trade. You could make anything in your own factories that anyone had designed anywhere else, and you could print books and copy movies and DVD's from authors and film producers rather than have to import them.

At their heart, copyright agreements are bilateral between two countries. For instance, Canada and the US agree to respect each others copyrights and patents. If Canada starts to allow Antiguan knockoffs of Microsoft Office or Adobe Photoshop to be sold in Canadian stores, then it has broken that agreement. Canada didn't win any right to sell Antiguan knockoffs at the WTO. If it tried to pull off that stunt, the US would ignore all Canadian patents and copyrights.

Canada is not forced to allow Antiguan knockoffs to be sold on its soil. It could choose to, but it would simply be saying that the agreement on copyright and patents between it and the US was at an end. It doesn't need a WTO decision to do that, but obviously hasn't because the existing regime benefits it much more than throwing some meaningless support behind a criminal enclave such as Antigua.

[Dark Horse]

Does it really matter, Dandy, when Japan, India, and a whole string of other countries are waiting in the wing to see how this plays out? Even if what you say is true, every country in the world could repeat the Antigua process, meaning that all would have Microsoft for a dollar. And that's is only one of many product lines affected.

[Dandy Lion]

Does it really matter, Dandy, when Japan, India, and a whole string of other countries are waiting in the wing to see how this plays out? Even if what you say is true, every country in the world could repeat the Antigua process, meaning that all would have Microsoft for a dollar. And that's is only one of many product lines affected.

I used Canada as an example. But you can substitute Japan, India, whoever you want in terms of a country with any meaningful market, and the same logic applies.

I despise America's bully attitude to the rest of the world as much as anyone else and I'd love to see them have to take it up the bum, but this isn't how its going to happen.

If it were, you'd see a huge increase in companies setting up in Antigua getting ready to manufacture and ship everything American companies have patented and copyrighted. If it were true, you'd see Microsoft stock plummeting on the markets. As well as many other companies.

The best thing the US can do is set up regulated gaming with fair games, certainty of payouts when requested, and strict criteria for integrity and character of those operating such sites. If that were done, the US would have a system superior to any other in the world, certainly Antigua's which has a few good operators and a whole toiletbowl of sleazy thieves licensed. That's what free enterprise is all about and what America is supposedly all about.

The question is why don't they do it? Many different answers to that, but they are much the same as to the question of why marijuana isn't lega.

[JC]

Antigua plans on offering these products via the internet. The sale will take place in Antigua.

I believe if Antigua gets a green light from the WTO on thid matter that other members including the EU will support the decision. The TRIPS treaty somehow falls under the WTO group of agreemnts and if a WTO panel gives Antigua a waiver, all of the other WTO members will honor th decision.

[Dandy Lion]

Antigua plans on offering these products via the internet. The sale will take place in Antigua.

I believe if Antigua gets a green light from the WTO on thid matter that other members including the EU will support the decision. The TRIPS treaty somehow falls under the WTO group of agreemnts and if a WTO panel gives Antigua a waiver, all of the other WTO members will honor th decision.

Antigua does? A country is going to start selling cheap Microsoft products?

Countries may "support" the decision, but no country in its right mind is going to start ignoring American copyright and patents just to get cheap Windows Vista. What difference does the WTO decision make? Why not have already done it?

The reason I say this is that it ultimately doesn't matter a good goddamn what Antigua has "won". American copyrights and patents are among the foremost of American "interest" that they are forever killing non-white people somewhere in the world for. Copyrights and patents are country to country and if you're the Phillipines, for instance, and you start knocking off Microsoft or allowing Internet downloaded copies to be legally used there and then start snivelling about that WTO decision, you're going to find your ambassadors kicked out, your airline agreements cancelled, your ship docking rights in America cut off, and Phillipine entry into the US banned. For starters.

[bigboydan]

Hell, I can't blame Antigua one bit. If the U.S. isn't going to honor a court order then why should Antigua play by the rules of the U.S.A.

[Dark Horse]

Dandy, you're making a lot of assumptions. If the US doesn't respect the rights and concerns of other countries, then other countries don't have to respect ours. Pretty simple.

This is a huge poker game and the US is the one that's bluffing. The problem is that the whole world knows it.

[Dandy Lion]

Dandy, you're making a lot of assumptions. If the US doesn't respect the rights and concerns of other countries, then other countries don't have to respect ours. Pretty simple.

This is a huge poker game and the US is the one that's bluffing. The problem is that the whole world knows it.

We'll just have to agree to differ then.

[SBR_John]

It will not play out that way. Antigua cant slug it out with the US and wont. They will be awarded some amount of money I'd set the line Over/Under at $120 million.

[JC]

Antigua does? A country is going to start selling cheap Microsoft products?

Countries may "support" the decision, but no country in its right mind is going to start ignoring American copyright and patents just to get cheap Windows Vista. What difference does the WTO decision make? Why not have already done it?

The reason I say this is that it ultimately doesn't matter a good goddamn what Antigua has "won". American copyrights and patents are among the foremost of American "interest" that they are forever killing non-white people somewhere in the world for. Copyrights and patents are country to country and if you're the Phillipines, for instance, and you start knocking off Microsoft or allowing Internet downloaded copies to be legally used there and then start snivelling about that WTO decision, you're going to find your ambassadors kicked out, your airline agreements cancelled, your ship docking rights in America cut off, and Phillipine entry into the US banned. For starters.

No, the country itself won't sell the products. Antigua will license the activity.

If the WTO sanctions it, other countries will abide by the decision. Why? Because other countries respect international agreements. Because other countries are offended by the US trying to weasel out of this adverse decision.

All of the member countries of the WTO agree to abide by the decisions of the panels. The US can come into compliance or accept the sanctions. It's their choice. Of course ths US could also come to the table and negotiate in good faith, something they have refused to do to this point.

I am not free to name names, but intellectual property interests have already started to express their concerns. They do not want to see IP sanctions come to fruition. They fear not just the sanctions, but the precedent.

As for your figure John, why would the Antiguan Government and industry walk away from a market that Barney Frank says is worth $12 to $15 billion per year for a one time payment of $120 million? Even if Frank is off by a factor of 10 or even 100, settle for one year?

For a thorough summary of the case to date I recommend this article/interview:

http://www.theregister.co.uk/2007/07/16/antigua_wto_mendel/

[SBR_John]

Well I'd put the gaming in Antigua at about 5% of the Antiguan GDP at its peak.

The GDP of Antigua is about $1 billion. So that's 2.5 years worth of industry which is about the time it would take for the US to recall that service on morals.

[Dandy Lion]

Hell, I can't blame Antigua one bit. If the U.S. isn't going to honor a court order then why should Antigua play by the rules of the U.S.A.

Why should anybody but Americans, really?

[JC]

Well I'd put the gaming in Antigua at about 5% of the Antiguan GDP at its peak.

The GDP of Antigua is about $1 billion. So that's 2.5 years worth of industry which is about the time it would take for the US to recall that service on morals.

What would Antiguan gaming have been worth is they were free to operate without harassment? You need to take that into account.

If you look at it from a withdrawal of commitments point of view, it's not just the time since the case started, it's that plus all of the lost revenue moving forward.

Two independent and well known economists came up with $3.4 billion per year. It's up to the US to argue it down if they can and for a WTO panel to decide. There is NO appeal from the next panel. I'm sure Mendel wouldn't put that number forward if he couldn't back it up with data.

There were many people who never thought Antigua could win this case. It took a long time and a lot of hard work, but the US finally conceded when they waived their last appeal and started this hail Mary attempt to alter their schedule. Now people are saying Antigua won't get any valuable sanctions. Maybe they're right, maybe they're wrong. We'll see.

That makes for another interesting point. If Antiguan sanctions meant nothing to the US, why would it go through the unprecedented maneuver to try and alter its schedule and anger the entire trade community?

[SBR_John]

I'd take all action it would be less than half of the proposed $3.4 billion. I didnt say Antigua wouldnt get any sanctions. The millions the US will pay will be their sanction. Do you really think the US will allow patents and copyrights to be stripped by a country with 67,000? Even in ones wildest imagination?

As for the fine or sanction if you will, thats nearly 4 years of total GNP for the entire nation! Love to hear the reasoning but common sense dictates they are starting high. This action was somewhat narrow to horse racing as I recall which is beside the point.

Maybe my guess of $120 million is too low. It could be a lot more but I seriously doubt it will exceed the total GNP for the entire country which is about $900 million. I will admit I do not know what precedent may be in regards to WTO settlements. If anyone does I'd love to hear them.

In any case, a money settlement does not help gaming advocates unless it was an ongoing payment. Which I have seen no mention of.

It was a noble cause but sadly completely ignored by the US. I fear once the check is cut its all over.

[JC]

It wasn't narrow about horse racing. That's just how the US spun it.

It was about rmote gaming, and the panel said you can't calim you have a moral aversion to remote gaming while you offer remote gaming in your country such as horse racing.

The last paragraph of the decision states the Wire Act, IGBA, and the Travel Act are out of compliance. Not the horse racing laws which Antigua never challenged.

[Dandy Lion]

I'd take all action it would be less than half of the proposed $3.4 billion. I didnt say Antigua wouldnt get any sanctions. The millions the US will pay will be their sanction. Do you really think the US will allow patents and copyrights to be stripped by a country with 67,000? Even in ones wildest imagination?

Exactly. The sanction will be the money to be paid. End of story.

Anyway. This is surely the most intelligent and important thread on any forum anywhere right now.

[Omnivorous Frog]

That makes for another interesting point. If Antiguan sanctions meant nothing to the US, why would it go through the unprecedented maneuver to try and alter its schedule and anger the entire trade community?

Huh? The last time I checked the US had no problems angering anybody, as winning hearts and minds is a fraudulent a slogan as you can get. They had no problem arresting and detaining foreign CEO's, former CEO's, ruining corporations on the AIM, hurting our staunchest ally. The 800 lb. gorilla does not care about angering anyone. Like one prominent British bookmaker said, those blokes are out of control and dangerous. Here is my new US slogan for US towards that pretend organization, "Go ahead, make me pay."

[SBR_John]

I certainly admire the passion of JC and all those that have supported this fight for all these years. Fighting City Hall and winning takes an unusal degree of courage.

After the check is cut where do we stand? The WTO fight probably delayed and even watered down some of the proposed anti-gaming bills for a while. Perhaps even the DOJ was less enthusiastic about making a bigger stink for a while.

Longer term one could say it brought US lawmakers a dose of reality that online gaming is coming one way or the other.

[bigloser]

Huh? The last time I checked the US had no problems angering anybody,

The US has complied with EVERY WTO ruling against them prior to this (and there are over 20 I believe).
This is unprecedented, the US will lose, and writing a cheque for 1 billion may be the way out.