Antigua fights U.S. ban on internet gambling | IXGAMES

IS GAMBLING A DRUG?

U.S. lawmakers opposed to Internet gambling liken the industry to crack cocaine, warning that online wagering opens an unfettered avenue to addiction-prone gamblers. Congress outlawed Internet gambling in a bill signed by President Bush last year, sending shock waves through a fast-growing industry that takes in an estimated $12 billion a year. Even though Internet gambling remains legal across much of the globe, stock prices of European firms that offer online wagering plunged. Meanwhile, U.S. authorities stepped up their crackdown by arresting directors of the firms who crossed American soil. In Antigua, where authorities turned to financial services and Internet gaming in the 1990s to diversify their economy after hurricanes devastated the tourism industry, the U.S. crackdown has been a stinging blow. Employment in the sector – once 10 percent of all jobs on the island – has dropped by 80 percent to about 600, while the number of Internet gambling firms has dwindled to fewer than 40. Since 1999, revenues for the firms plummeted from nearly $1 billion to about $130 million, while license fees paid to the government fell from $90 million to $20 million. ”There’s no other sector here that can absorb these workers,” said Kaye McDonald, director of gaming for Antigua and Barbuda’s Financial Services Regulatory Commission. `With the amount of Americans who continue to gamble, prohibition really doesn’t work. We have adopted stringent regulations to protect the players, and that seems to me a better approach.” Antigua won its dispute with the United States before the WTO, which ruled that America violated the international trade body’s rules by blocking the island’s access to U.S. gamers. Instead of complying, American officials stunned many observers by announcing they would rewrite U.S. commitments to WTO agreements. Antigua has responded with the only weapon allowed under WTO auspices, laying a claim for $3.4 billion in sanctions against the United States. While some doubt the tiny island has the clout to enforce the sanctions, other nations have lined up with claims, saying they have also been unfairly blocked from the U.S. market. Antigua’s lawyer - Mark Mendel, says the dispute with the United States has been ”maddening” because so many forms of gambling – from horse tracks to Indian casinos and lotteries – are allowed in America. ”The U.S. position has been completely hypocritical,” he said. ‘I’ve seen one study that says no U.S. citizen lives more than two hours’ drive from a casino.” ”We want Antigua to be the place of choice for people who want to gamble over the Internet,” `Our regulations allow no exceptions. Our operators have to present their internal controls for review every year. We are determined to protect the players.”