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Is It Legal To Bar Foreign Online Poker?
#58 - 1--ADMIN--Is It Legal To Bar Foreign Online Poker?--2007-05-28 10:08:06
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Is It Legal To Bar Foreign Online Poker?
by
I.
Nelson Rose filed under
Poker
News on 2007-05-28 [Originally appeared in the
May
28, 2007 issue of Poker Player]
 |
| I. Nelson Rose |
The latest decision from the World Trade Organization
("WTO") shows that foreign licensed Internet poker operators are fighting back
against the many governments, including the United States, which are threatening
to arrest them. The WTO ruled that the U.S. has not taken any steps to comply
with its prior decisions. It declared that the U.S. was discriminating against
Antigua's legal online operators by charging them with crimes while allowing
American operators to take bets on the Internet.
The European Court of Justice ("ECJ") recently issued
a similar decision. It declared that Italy could not charge British citizens
with crimes under Italian law for taking bets online, since Italy had made it
impossible for anyone who was not Italian to get a license.
This does not mean that a state cannot keep out
foreign legal gaming. Each situation is unique.
The first step is to find a statute or regulation
that might apply. Most fights against remote betting stop here, because
lawmakers simply have not enacted the necessary laws.
The federal Department of Justice, which is charged
with enforcing federal laws, asserts the Wire Act covers all forms of interstate
and international gambling. But the few courts that have looked at the issue
have ruled the Wire Act is limited to bets on sports events and horse and dog
races. So foreign poker sites cannot be charged under that law.
Almost all other federal and state statutes also have
severe weaknesses, such as not clearly stating that they apply to activities
taking place partially in other countries. The recently enacted Unlawful
Internet Gambling Enforcement Act does nothing to correct this problem. An
underhanded political move by the failed politician Bill Frist, this Act applies
only to Internet gambling that is unlawful under some other federal or state
law. If there is a law in place, the situation gets complicated.
States start with the right to bar all goods and
services, even if these come from places where it is legal to sell and ship
these products. The problem arises when a government has agreed, sometimes
unintentionally, to eliminate its trade barriers.
Usually when a state joins a federation, like the
states of the United States, or signs a treaty organization, like the European
Union, it finds it has opened its borders to goods and services from its sister
states or trade partners. But decision-makers have unanimously agreed that
gambling is different from other legal businesses. A government can bar foreign
gaming, if it can come up with good reasons for doing so.
States that want to exclude legal foreign gambling
always raise the same arguments: fear of fraud, money laundering, organized
crime, underage and problem gambling, and because it offends local morality.
Governments cannot rely solely on the real reason - to keep out competition. It
is almost impossible to successfully argue that a state has the right to exclude
a legal activity when that state allows only local operators to do the exact
same thing.
This is what happened to the U.S. in its fight with
Antigua in the WTO. The WTO ruled that the U.S. agreed to let in legal gambling
from other members of the WTO. But it then bought the argument that federal laws
against remote gambling were necessary to protect Americans. So, the U.S. would
have won. But Antigua raised the Interstate Horseracing Act, which allows
Americans to bet on races from their homes, but only with operators in U.S.
states. Since there is no reason for this discrimination against Antiguan
horsebooks, the U.S. was held to be in violation of the WTO treaties.
The same type of analysis can be done with any two
countries and any form of gambling, for anyone willing to spend large amounts of
time and money.
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