WTO rules against US gambling ban

[maddogchen]

US laws prohibiting cross-border gambling break trade rules, the World Trade Organisation says.

The WTO case was brought by the Caribbean state of Antigua and Barbuda, host to many of the online casinos whose use is illegal in the US.

The ruling confirms a preliminary judgement issued in March.

But the US said it will appeal and - as a last resort - could activate its right to change the deal under which it joined the WTO in the first place.

"This panel report is deeply flawed," said a spokesman for US Trade Representative Robert Zoellick.

An appellate panel will now consider the appeal over the next few months.

'David and Goliath'

The ruling, written by a three-person panel, says the US law effectively breaches a 1994 global deal which liberalises trade in services.

Antigua and Barbuda, whose population is just 67,000, says it gets as many as 3,000 jobs from internet gambling.

The business has helped it weather the downturn in tourism.

The US law - which forbids paying for betting by means of US-issued credit cards or cheques - is endangering its economy, it said.

In a statement, the islands' government said it had won a "David and Goliath" fight, and insisted it had tried to reach a negotiated settlement only to be rebuffed five times.

It also quoted a survey suggesting the US was home to half the worldwide online gambling market.

'Shocking and troubling'

But the US says the ban, based on a 1961 federal law originally designed to cover telephone bets, is designed to protect against both money laundering and the exposure of vulnerable sections of society to gambling.

One often-cited example is stopping children from running up gambling bills on their parents' credit cards.

The WTO panel had turned down a request by the US to use a "public morals clause" in WTO rules to keep the ban, one trade official told Reuters.

The rebuff was "shocking and troubling", he said.

Antigua and Barbuda, however, represent just a small part of the world's online gaming.

The Government Accountability Office, until recently known as the General Accounting Office, has estimated that there are more than 1,800 internet gambling operations.

Text

What do you think of this? Should free trade apply to gambling?
edit: added link

 

[Kibbo]

What difference is there between a private American company running a gambling site and a Carribbian? If they can provide a better product, they should be allowed to. Of course, if you tax domestic companies, there should be no problem (except technical ones) with finding a way to tax a foreign one.

If you don't like gambling, ban it altogether. Solely banning foreign companies is on moral grounds is hypocritical.

 

[maddogchen]

how would you tax a foreign company for online transactions?

 

[RabidMongoose]

I don't understand...the US is only banning foreign online gambling companies? Or all online gambling companies of a certain type not based on domestic or foreign issues?

 

[InfectedMushroom]

Originally posted by: maddogchen
how would you tax a foreign company for online transactions?

hehe that seems to be the problem.
how can you show someone is using the site from the US or somewhere else for tax purposes?

 

[EagleKeeper]

Originally posted by: InfectedMushroom

Originally posted by: maddogchen
how would you tax a foreign company for online transactions?

hehe that seems to be the problem.
how can you show someone is using the site from the US or somewhere else for tax purposes?

Have to do it based on the IP

If the host country will not provided tax of US based revenues, the US does not want to supply any of the rvenue.

 

[maddogchen]

Originally posted by: RabidMongoose
I don't understand...the US is only banning foreign online gambling companies? Or all online gambling companies of a certain type not based on domestic or foreign issues?

from reading this and other articles it seems the US is banning people in the US from using US credit cards to participate in gambling online with companies located outside the US.

 

[InfectedMushroom]

Originally posted by: EagleKeeper

Originally posted by: InfectedMushroom

Originally posted by: maddogchen
how would you tax a foreign company for online transactions?

hehe that seems to be the problem.
how can you show someone is using the site from the US or somewhere else for tax purposes?

Have to do it based on the IP

If the host country will not provided tax of US based revenues, the US does not want to supply any of the rvenue.

big problem with that, i access my online poker sites through proxies. how can you tell where i come from?

 

[EagleKeeper]

Originally posted by: InfectedMushroom

Originally posted by: EagleKeeper

Originally posted by: InfectedMushroom

Originally posted by: maddogchen
how would you tax a foreign company for online transactions?

hehe that seems to be the problem.
how can you show someone is using the site from the US or somewhere else for tax purposes?

Have to do it based on the IP

If the host country will not provided tax of US based revenues, the US does not want to supply any of the rvenue.

big problem with that, i access my online poker sites through proxies. how can you tell where i come from?

How it is done is beyond my scope of knowledge.



I am just stating what the US government wants. Tax money.

And the off-shore gaming locations will not deliver.


Luckly, I do not need proxies

 

[InfectedMushroom]

Originally posted by: EagleKeeper



Luckly, I do not need proxies

hahahaha good one. well, i visit your nice city a few times a year.

 

[Kibbo]

They could impose the tax in the same way they are imposing the ban. Tax all credit card and banking transactions having to do with online casinos, period. Then, both foriegn and domestic casinos would be treated equally.

The taxation issue is really secondary, considering that they are trying to use moral justifications for thier blatantly protectionist policy.

 

[InfectedMushroom]

Originally posted by: Kibbo
They could impose the tax in the same way they are imposing the ban. Tax all credit card and banking transactions having to do with online casinos, period. Then, both foriegn and domestic casinos would be treated equally.

The taxation issue is really secondary, considering that they are trying to use moral justifications for thier blatantly protectionist policy.

there is a problem with taxing every credit card transaction too. i am not purchasing anything perse when i open an account with an online gambling casino and DEPOSIT a sum of money there.
i have not earned or bought anything yet. when i withdraw money though is when i may have won something.

 

[rahvin]

This isn't about taxes. This is about the fact that gambling is illegal is quite a few states. Utah in particular allows no form of gaming. All online gaming is banned unless you live in the state you are gambling in (for instance you can gamble online at some nevada casinos if you live in nevada). This is a state-rights issue that the WTO is trying to dictate to the US people. It's rediculous. In this instance our government is trying to protect a state right to regulation of gaming.

 

[EagleKeeper]

The states rights issue is a red herring.

$$$ is the driving point.
If taxable money is leaving a state/country they want a piece of it to be returned.

It is not.

There is enough gaming going on within different states, that is a state had the ability to control it within its borders, it would tax it.

The Internet allows it to be handled outside the borders and outside the taxation control.

 

[rahvin]

Originally posted by: EagleKeeper
The states rights issue is a red herring.

$$$ is the driving point.
If taxable money is leaving a state/country they want a piece of it to be returned.

It is not.

There is enough gaming going on within different states, that is a state had the ability to control it within its borders, it would tax it.

The Internet allows it to be handled outside the borders and outside the taxation control.

The only red-herring is saying that it's anything other than a moral issue. Gambling is not liked by the religious right, they want the ability to regulate it at the state level. If it was anything but what I say it was there wouldn't be federal laws prohibiting interstate (contained completely within US borders) gambling over the internet. And there IS a federal law baring interstate gambling.

Gambling, alcohol, prositution and soon to be tobacco are all regulated at the state level, and always will be even if we have to alter our membership in the WTO to make it happen.