The Remote Gaming Association (RGA) has filed a complaint against the US under the European Union’s Trade Barriers Regulation on behalf of European online gambling companies. Clive Hawkswood, RGA’s Chief Executive said, “We have been left with no choice but to pursue all legal avenues available to challenge the US Department of Justice for its discriminatory enforcement activities against European online gaming operators.”

In their press release, the RGA pointed out that while the US Department of Justice continues to claim that all online gambling is illegal and has exerted pressure on foreign online gaming companies with forfeitures and threatened prosecutions, they have left domestic online gambling companies, specifically relating to online horseracing wagering, unfettered.

RGA’s announcement comes on the heels of the WTO settlement between the European Union and the US. In a case initiated by Antigua and Barbuda, the WTO determined that US online gambling laws and policies were discriminatory and violated the conditions of their trade commitments. Rather than conform to the 1994 services agreement, the US filed to withdraw access to its online gambling market from WTO trading partners, opening the floodgates of compensation claims against the US. The terms of the agreement granted the EU access to previously restricted US postal, warehousing and analysis and testing markets, but represented no compensation to the very online gaming companies that were being discriminated against.

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Today marked another mile-stone in the effort to legalize certain Internet skill games at the federal level.

Rep. Robert E. Andrews [NJ-1] became the 21st representative to co-sponsor the Skill Games Exemption bill H.R. 2610 offered by Florida congressman, Robert Wexler.

Congressman Andrews is currently serving his 10th term in congress. During that time he has served on the Education and Labor Committee and is currently the chairman of that committee. He also is on the Subcommittee of Higher Education, Lifelong Learning and Competitiveness.

He sits on the House Armed Services committee and the Subcommittees of Oversight and Investigations, as well as Terrorism and Unconventional Threats committees, and he also serves on the Budget Committee.

The Philadelphia Inquirer credits him as “being properly focused on fixing the looming fiscal disaster in Washington.”

The congressman in not typical of most, he takes the train from his home daily in New Jersey and returns from Washington DC to his family the same night. Over his career he has been a strong supporter of his constituents and is known for fighting for them and their needs.

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The United States faces a token $21 million in annual trade sanctions as a result of its online betting ban, the World Trade Organization said Friday in awarding Antigua and Barbuda the right to target U.S. services, copyrights and trademarks.

The decision is a setback for the Caribbean island nation, which sought the right to impose $3.4 billion in retaliatory measures against U.S. commercial services and intellectual property.

Washington acknowledged its Internet gambling restrictions were ruled illegal by the WTO, but argued that Antigua should only be compensated for about $500,000 for lost annual revenue.

The case has drawn the attention of a number of U.S. industries, partly because of the ways Antigua has proposed retaliating against the much larger U.S. economy. Washington’s attempt to escape its legal loss by proposing a revision of the WTO’s key treaty on trade in services has also fueled interest.

The office of the U.S. Trade Representative noted that Antigua was seeking sanctions worth more than three times the size of its entire economy.

“Antigua’s claim was patently excessive,” it said in a statement. “The United States is pleased that the figure arrived at by the arbitrator is over 100 times lower than Antigua’s claim.”

However, the U.S. said it was concerned that Antigua could now violate some American intellectual property rights — which could range from CDs and DVDs to computer software, industrial designs and designer clothing.

The ruling could “establish a harmful precedent for a WTO member to affirmatively authorize what would otherwise be considered acts of piracy, counterfeiting or other forms of … infringement,” the U.S. said.

The U.S. and Antigua cannot appeal Friday’s decision.

Realistically, it would have been very difficult for a country the size of Antigua’s to implement hundreds of millions of dollars worth of trade sanctions on the U.S. without harming its own economy and the welfare of its citizens. Ecuador was awarded similar retaliation rights in a bananas dispute with the European Union in 2000, but failed to come up with an effective way to introduce countermeasures.

The WTO arbitration panel said it had to adopt its own approach to come up with a fair retaliation figure in view of the wide difference in how the U.S. and Antigua estimated the economic effect of the gambling ban.

“In doing so, we feel we are on shaky grounds,” the panel said in an 88-page decision.

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INTERNET GAMBLING — (Senate – December 18, 2007)

Sen. Jon Kyl [R-AZ]: Mr. President, I would like my colleagues to be aware of an important letter signed by 45 State attorneys general expressing “grave concerns” about Representative BARNEY FRANK’s Internet Gambling Regulation and Enforcement Act, H.R. 2046.

The State attorneys general note that the recently enacted Unlawful Internet Gambling Enforcement Act of 2006 has “effectively driven many illicit gambling operators from the American marketplace.” The Frank bill “proposes to do the opposite, by replacing state regulations with a federal licensing program that would permit Internet gambling companies to do business with U.S. customers.”

A federal license would supersede any state enforcement action, because 5387 in H.R. 2046 would grant an affirmative defense against any prosecution or enforcement action under any Federal or State law to any person who possesses a valid license and complies with the requirements of H.R. 2046. This divestment of state gambling enforcement power is sweeping and unprecedented.

One final but very important point from the letter is the impact of the so-called “opt-out” provisions. Specifically, the letter reads:

[T]he opt-outs may prove illusory. They will likely be challenged before the World Trade Organization. The World Trade Organization has already shown itself to be hostile to U.S. restrictions on Internet gambling. If it strikes down state opt-outs as unduly restrictive of trade, the way will be open to the greatest expansion of legalized gambling in American history and near total preemption of State laws restricting Internet gambling.

The Frank bill is unacceptable to the State attorneys general and it ought to be unacceptable to Members of Congress as well. I urge my colleagues to oppose the Frank bill or any similar proposals that would create a permissive Federal licensing scheme for Internet gambling.

I ask unanimous consent to have printed in the Record the letter from the National Association of Attorneys General.

There being no objection, the material was ordered to be printed in the RECORD, as follows:

ATTORNEYS GENERAL,

Washington, DC, November 30, 2007.

TO THE LEADERSHIP OF THE U.S. HOUSE OF REPRESENTATIVES AND SENATE:

We, the Attorneys General of our respective States, have grave concerns about H.R. 2046, the “Internet Gambling Regulation and Enforcement Act of 2007.” We believe that the bill would undermine States’ traditional powers to make and enforce their own gambling laws.

On March 21, 2006, 49 NAAG members wrote to the leadership of Congress:

“We encourage the United States Congress to help combat the skirting of state gambling regulations by enacting legislation which would address Internet gambling, while at the same time ensuring that the authority to set overall gambling regulations and policy remains where it has traditionally been most effective: at the state level.”

Congress responded by enacting the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), which has effectively driven many illicit gambling operators from the American marketplace.

But now, less than a year later, H.R. 2046 proposes to do the opposite, by replacing state regulations with a federal licensing program that would permit Internet gambling companies to do business with U.S. customers. The Department of the Treasury would alone decide who would receive federal licenses and whether the licensees were complying with their terms. This would represent the first time in history that the federal government would be responsible for issuing gambling licenses.

A federal license would supersede any state enforcement action, because §5387 in H.R. 2046 would grant an affirmative defense against any prosecution or enforcement action under any Federal or State law to any person who possesses a valid license and complies with the requirements of H.R. 2046. This divestment of state gambling enforcement power is sweeping and unprecedented.

The bill would legalize Internet gambling in each State, unless the Governor clearly specifies existing state restrictions barring Internet gambling in whole or in part. On that basis, a State may “opt out” of legalization for all Internet gambling or certain types of gambling. However, the opt-out for types of gambling does not clearly preserve the right of States to place conditions on legal types of gambling. Thus, for example, if the State permits poker in licensed card rooms, but only between 10 a.m. and midnight, and the amount wagered cannot exceed $100 per day and the participants must be 21 or older, the federal law might nevertheless allow 18-year-olds in that State to wager much larger amounts on poker around the clock.

Furthermore, the opt-outs may prove illusory. They will likely be challenged before the World Trade Organization. The World Trade Organization has already shown itself to be hostile to U.S. restrictions on Internet gambling. If it strikes down state opt-outs as unduly restrictive of trade, the way will be open to the greatest expansion of legalized gambling in American history and near total preemption of State laws restricting Internet gambling.

Sincerely,

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A Farmingville man who ran illegal Texas Hold ‘em poker games in the basement of his home was arrested Wednesday night after an undercover investigation, Suffolk police said.

Joseph Giannino, 41, of 27 Hickory Ave. in Farmingville, was arrested at his home during a 10:30 p.m. raid by Suffolk police.

Officers executed a search warrant while a game was in progress, and they seized four poker tables, three metal cases full of chips and a box containing almost 100 decks of cards.

They also seized several computers and approximately $2,000 in cash.

Giannino was charged with promoting gambling and criminal nuisance, both misdemeanors, and was given a field appearance ticket for arraignment at First District Court in Central Islip on February 20.

The raid was conducted by Sixth Precinct Crime Section Officers, assisted by Emergency Services Officers, the Sixth Precinct Gang Unit and the Sixth Precinct COPE Unit.

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Three of the world’s most-popular websites have agreed to pay a collective $31.5 million to settle allegations that they promoted illegal online gambling operations.

The U.S. attorney in St. Louis announced the settlements Wednesday with Microsoft Corp., Yahoo Inc. and Google Inc., which she accused of selling ads that steered U.S. Web surfers to offshore gambling websites. The Justice Department considers publishers of such gambling ads to be accessories to a crime.

Without admitting or denying liability, the three companies agreed to forfeit millions of dollars they took in from the suspect ads, and Microsoft and Yahoo vowed to run public service campaigns warning young people that online gambling is illegal.

The agreements come as part of a U.S. crackdown that has included the arrests of top executives of publicly traded British companies that have accepted online bets from Americans. The government also has reached a multimillion-dollar settlement with EBay Inc.’s PayPal subsidiary for processing gambling transactions.

A year ago, President Bush signed a law that made such wagering, and the processing of many payments related to wagering, more explicitly illegal.

All three Internet companies said they had stopped accepting gambling ads in 2004, more than six months after the government warned magazine publishers that similar ads were illegal.

U.S. Atty. Catherine L. Hanaway, who also won a $7.2-million settlement from the Sporting News in January 2006, agreed to waive any additional liability of the Internet companies.

Although they generally stopped selling such ads several years ago, she said, the settlement agreements cover the years 1997 to 2007 to provide the companies more protection from prosecution.

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European online gaming firms are filing a formal complaint against the United States for discrimination after their controversial exit from the US market.

The companies say that the US Department of Justice has violated international trade law by kicking them out of the market and taking legal action while allowing domestic online gaming operators to continue trading.

The move by the Remote Gaming Association (RGA) comes only days after the European Union agreed a trade deal with the US to compensate the bloc for loss of earnings from gaming.

European online gaming firms, such as PartyGaming, 888.com and Sportingbet, have been hit hard after they were forced to stop doing business in the lucrative US market following a rule change last year.
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“We have been left with no choice but to pursue all legal avenues available to challenge the US Department of Justice for its discriminatory enforcement activities against European online gaming operators,” Clive Hawkswood, the chief executive of the RGA, said.

The group has asked the EU to investigate the situation, arguing that although the US has repeatedly stated that all forms of online gambling are illegal, it has enforced this view only with non-US businesses.

“How would US investors and businessmen feel if they invested in a business in the UK based on international law commitments, and then suddenly the UK not only passed new laws forcing them to shut down their business but tried to throw them in jail for past activities, while still allowing their domestic competitors to continue on doing the same thing?” Mr Hawkswood said.

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The Bowie Elks Lodge in Gambrills received a reprimand from the Anne Arundel County Liquor Board Dec. 11 after police found lodge members playing poker in August.

The board agreed to expunge the violation from the club’s record if it has no other violations for one year and if the lodge pays the administrative costs for the hearing.

Lodge members were ordered to appear before the liquor board after police entered the club on an anonymous tip Aug. 13 and discovered an illegal poker game ongoing.

When police went to the lodge, they confiscated $406, a poker table, poker chips and playing cards, according to an Anne Arundel County police report.

Eight men, three of whom listed Bowie addresses, were involved in the game, the report said.

No charges have been filed, according to Maryland court records.

Detective Lemuel Aulton of the Anne Arundel County Police Department told the liquor board that the lodge members and staff were ‘‘very cooperative” with police, and the men admitted they were playing a low-stakes poker game.

Attorneys general from 43 states have come out against a bill to roll back a ban on Internet gambling.

In a Nov. 30 letter to congressional leaders, the National Association of Attorneys General expressed “grave concerns” about a bill by Rep. Barney Frank, D-Mass., that would repeal the 2006 ban and appoint the Department of Treasury to regulate online wagering in the United States.

The attorneys general praised the ban, saying it has driven many illegal gambling operators from the American marketplace.

“But now, less than a year later, (Frank’s bill) proposes to do the opposite, by replacing state regulations with a federal licensing program that would permit Internet gambling companies to do business with U.S. customers,” the letter said.
    
The attorneys general also voiced skepticism about “opt-outs” in the bill, which would allow states to continue prohibiting Internet gambling within their borders.

Nevada Attorney General Catherine Cortez Masto did not sign the letter. Other states with attorneys general who did not sign the letter were Iowa, Kentucky, Massachusetts, Michigan, Nebraska and New York.

Frank said he would be willing to work with the attorneys general who signed the letter to address their concerns, but he also said the letter puzzled him.

“It seems inconsistent that conservatives would want states to regulate the Internet,” Frank said.

In addition, the current federal ban on Internet gambling does not give states a regulatory role, Frank said.

Despite the concerns of the attorneys general, Frank acknowledged his bill remains stalled and is unlikely to advance in 2008.

“We still don’t have enough support. We’re waiting to see if gamblers on the Internet are going to generate that support,” Frank said.

So far, Frank’s bill has 45 co-sponsors.

An alternative bill by Rep. Shelley Berkley, D-Nev., has 68 co-sponsors, including Frank.

Berkley’s bill calls for a one-year study of Internet gambling by the National Research Council of the National Academy of Sciences.

Unlike Frank, Berkley expects her bill to gain traction next year.

“I think my bill would be the appropriate first step,” Berkley said. “Otherwise, we are going to continue to legislate piecemeal without having any information from a study whatsoever.”

Both Berkley and Frank said this week’s settlement between the European Union and the United States should bolster their bills.

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