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Antigua to Complain to WTO Regarding U.S. Actions Against Online Poker

Posted on April 27th, 2011

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The issue on the U.S. crackdown on online poker sites for allegedly violating money laundering laws on top of the Unlawful Internet Gambling Enforcement Act of 2006 is causing Antigua and Barbuda to consider seeking United Nations and World Trade Organization intervention. Antigua and Barbuda are two of the most prolific license givers for online poker sites and insists that the U.S. action was not only illegal, it also violated trade laws on equality and open markets. The latest turn of events was motivated by the U.S. arresting up to 11 company executives from three well-known online poker sites – PokerStars, Full Tilt Poker, and Absolute Poker – and indicting them in U.S. courts for allegedly laundering up to $3 billion in money from paying U.S. citizens.

On top of the charges for fraud, illegal gambling and money laundering, U.S. agencies also seized the domains of the three websites hampering their operation. Antigua and Barbuda were host countries to those sites, are suffering from the effects of a shutdown in operation, and could lobby the World Trade Organization for action to enforce fair trade practices given the U.S. actions. (PokerStars is incorporated in the Isle of Man while Full Tilt Poker is incorporated in Ireland.) In a statement released to Reuters by Mark Mendel, the legal advisor for the countries in the Caribbean affected by the U.S. action, “I don’t think there’s another country in the world that puts people in jail for engaging in trade that’s lawful under international law. It’s as if Antigua would put Americans in jail for selling pineapples.”

The latest developments saw U.S. prosecutors striking a deal with operators to re-open their websites so that U.S. citizens can withdraw money from their online accounts as well as continue operations for those now playing from U.S. soil. Antigua and Barbuda have long argued that the U.S. Unlawful Internet Gaming Enforcement Act which prohibits financial institutions in the U.S. to process payments that eventually go into these sites is in itself illegal and in direct violation of the spirit of WTO laws on fair trade. The argument centers on the fact that gambling is already legal in most states so the concept of gambling for money is not alien to U.S. citizens or the U.S. Government.

A quick review of previous issues shows that the WTO has already ruled against the U.S. before. Antigua officials will meet over the weekend to discuss whether it will seek an audience with the WTO to review the issue and rule once and for all what the U.S. has to do before it enacts a protectionist law against borderless gambling. Adds Harold Lovell, Antigua’s finance minister, “I am concerned that at this point in time United States authorities continue to prosecute non-domestic suppliers of remote gaming services in clear contravention of international law.” For the most part, Antigua’s ire is understandable. Online gambling is the island-nation’s second biggest employer second only to tourism, as confirmed by the Journal of International Commerce and Economics. Antigua says that it’s betting operators have been approved by the WTO to offer its services to American consumers and there is no reason for the U.S. to deny this.

On the issue of whether or not the companies are defrauding American players of their money as argued by prosecutors. Mendel said “They’re not defrauding anybody. They’re not stealing money from anybody. They’re just trying to run their businesses.” The U.S. has long tried to enact legislation both at the state and federal levels to legalize online gambling but it has not succeeded so far in that regard. New Jersey legislature passed a law to legalize online poker only to be vetoed by Gov. Chris Christie last month. California is still deep in talks for concessions to pass its version of the bill and so is Florida. Iowa is looking more likely to wait for next legislative session in order to do anything.

Foreign observers widely perceive the move as the U.S.’s way of cleaning the field from competitors so it can put forward its own system that will generate revenues through taxation and licensing fees.