MONEY OR MORALITY

4 May 2007

Fair comment from mainstream press on the US online gambling position

The strange and hypocritical posture of the United States government on Internet gambling was squarely under the spotlight again as the week ended, with massive international media coverage of the launch of Barney Frank's Internet Gambling Regulation and Enforcement Act of 2007.

One of the better articles appeared in the Guardian, which very pertinently asked why Internet gambling had been singled out for attack in a country where almost every other type of gambling abounded in at least 50 of the states in the Union.

The article went on to examine the genesis of the Unlawful Internet Gambling Enforcement Act, pungently recording the events of last October when Republicans attached a clause outlawing online gambling to an unrelated bill on port security, and reminding readers that this "...was passed, with minimal debate, in the middle of the night just before Congress broke for mid-term elections."

"Those in favour of prohibition cited "public morals" - they worried that little could be done to monitor or treat gambling addiction if people with a problem could wager thousands, in private, at the touch of a button. But in the six months since the ban was enacted, unease about the draconian nature of the law has grown from a murmur to a clamour."

The World Trade Organisation action against the USA by tiny Antigua and Barbuda is also noted, with the observation that the WTO ruled that the US online gambling prohibition and its horse racing carve-out discriminated against foreign firms and was illegal.

Discussing the Frank initiative to amend the UIGEA, the Guardian quotes Congressman Frank, who chairs the House financial services committee, as saying: "The existing legislation is an inappropriate interference on the personal freedom of Americans and this interference should be undone."

The Guardian observes that there is a juicy financial carrot dangling in his move to license and regulate online gambling. Frank's proposal would licence and tax online casinos, raising an estimated $20 billion (GBP10 billion) for the US Treasury over five years.

The article quotes portal owner Gordon Price, who says that money, rather than morality, is the root of the issue: "The problem the Republicans had with internet gambling was that it was run off-shore and wasn't taxed. The US was getting no money from it - it was all flowing out to foreign companies and they didn't like that."

Price, who owns one of several portals urging US players to support the Frank initiative with their political representatives, says the native American lobby was instrumental in pressing for the UIGEA ban on financial transactions with online gambling sites in order to protect revenues at casinos on tribal land: "Every day, new laws are being implemented allowing new slot parlours and casino games across the country. There's no way this ban was a moral issue," he argues.

Pressure is mounting on the US government over its unequal stance on Internet gambling. The World Trade Organisation ruled last month that the UIGEA ban was illegal because certain domestic activities, including horseracing, were exempt, making it discriminatory law.

The unenviable plight of British businessman David Carruthers is also examined in the piece. The former Betonsports CEO has been under house arrest in St. Louis for the past eight months or more pending charges of running an illegal gambling racket. And according to court documents, the judge in the case, Mary Ann Medler, has offered Mr Carruthers' lawyers the opportunity to use the WTO ruling to argue for dismissal of the case.

Carruthers understands the impact of American anti-online gambling activity only too well; he was unexpectedly arrested, allegedly for running a gaming racket, while he changed planes in the US last summer – a decision dubbed "Stalinist" by Congressman Frank.

Carruthers has been under house arrest at a hotel in St Louis, Missouri, ever since. He has to wear an electronic tag and he is allowed outside twice a day - once for four hours and once for two hours.

The Guardian opines that the brightest hope for Carruthers and for the rest of the gambling industry lies with the WTO, which found the ban unlawful because it includes a number of exceptions. Inter-state electronic betting on horseracing is, for example, legal within America - but foreign firms offering online wagers are prohibited.

Attorneys in Carruthers' trial are likely to attempt to have the prosecution thrown out on the grounds that it relies on a regulation judged illegal under international law. The US is yet to respond to the WTO's ruling but as Price points out, it can hardly ignore it entirely: "It's very important for the US to follow the orders of the WTO if we want China to follow rulings in our favour."

That said, the article concludes that Frank's bill has little immediate chance of becoming law because the Democrat leadership, including speaker Nancy Pelosi, has expressed little enthusiasm for it. And Harry Curtis, a leisure analyst at JP Morgan, says: "Most politicians simply don't want to have their names associated with gambling."

The bottom line is that America may not back down entirely, but it isn't easy to prohibit such a popular pastime which, proponents argue, is part of the human condition.

The author ends on an amusing note: "As George Bernard Shaw put it: 'If you eliminate smoking and gambling, you will be amazed to find that almost all an Englishman's pleasures can be, and mostly are, shared by his dog.'"

Online Casino News courtesy of InfoPowa

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