 There was a lot of noise last week when the present United States Administration appeared to finally put some actual regulations behind the 2006 Unlawful Internet Gaming Enforcement Act. On further examination though it appears that nothing may have changed. For one thing, the "new" regulations still say nothing about what is and what is not "unlawful internet gaming". Those definitions seem to be left to either local jurisdictions or to the banks and financial institutions who must bear the brunt of the UIGEA.
Second, the new regulations are now in a comment period and will not be a compliance burden on financial institution until December 1, 2009. This leaves plenty of time for the new administration and a friendly Congress to kill the law, even on grounds of it being "overly vague" or a "regulatory burden on the financial institutions" involved. There is actually no need for any agency to actually address the issue of unlawful internet gaming.
It was and remains a poorly written piece of legislation, which in all likelihood is unenforceable on its face. It was a good scare tactic but it also mobilized the poker industry, which should have positive consequences for poker players in the long term.
The European Union, on the other hand, seems drawing ever closer to actually making some kind of decision on internet gaming policy. Unfortunately, in this case, it would seem that the individual nations involved in the EU dispute seem to be gaining support for local rather than EU control. While the public arguments are centered on moral and social customs about gambling within varying cultures; the truth is more like that some countries are making a huge amount of money via their private gambling fiefdoms and they don't want to share. Remember we are not talking about taxation or regulatory fees, like we are in the U.S. No, the European Union members are after the rake from gaming sites. In the EU, some countries want to be your book maker. Maybe we can replace volunteer armies with just those citizens who are behind on their gambling debts.
The EU position is that gaming is an industry just like wine and cheese and automobiles. The countries who have staked out a private gaming website do not want to relinquish their income stream, so they argue that gambling is a moral question. Right now in the EU, it appears that the decision making scale may be tipping to the side of moral greed and away from an open markets policy.
 Now that the dust has cleared on the federal elections in the United States, what does the new political line-up in Washington D.C. mean for online poker?
First, the news is mostly good. The democrats will have increased majority is both houses of congress as well as President Obama in the white house. Democrats are generally more favorable to a regulation of online gaming as opposed to a prohibition. Additionally, almost no one wants to put excess regulatory burden on the financial system during the present economic crisis, which is exactly what the draconian provisions of the Unlawful Internet Gaming Enforcement Act attempted to do.
Second, the various congressional committees that dealt with the various potential regulations of the internet and commerce are all in the hands of committee chairmen, who favor online gaming. Also several of those committee will be gaining new members, who politically will be expected to follow the party line on more liberal and open internet gaming politics.
So, what to expect:
-unless the old administration acts before January 20th to get out policies and guidelines based on the two year old UIGEA; expect such rules to never see the light of day under the new administration.
-expect several bills to hit the new congress early in 2009 with slow but steady progress through the cumbersome approval process.
-breakthroughs in trade policy negotiation on online poker with both the European Union and other jurisdictions, like Antigua.
Will it happen soon? No.
Will it happen? Yes, definitely yes.
When the new more open U.S. government takes over next year, there is every belief that their national prohibitionist position on online gaming will at some point be reversed. Eventually the U.S. will regulate the online poker industry for U.S. players.
Let me suggest that this will make similar decisions in all parts of the world much more difficult. Let's take Sweden's Svenska Spel gaming monopoly for example. Despite EU pressure Svenska Spel and other national owned and operated gaming monopolies continue to both operate and exclude other online sites from operating within certain geographic boundaries.
There are advantages to government run sites. A uniform, non-English language is often used. Social and moral concerns are addressed within the strictures of a unique cultural set. And the government makes a lot of money on the rake.
But here comes the not too distant crisis of conscience and of pocket book. As far as online poker, the U.S. constitutes the largest revenue stream and dollar for dollar, euro for euro, lira for lira, peso for peso; the Americans gamble for more cash then any other nation on the net. This, of course, has to do with multiple factors of disposable income, as well as high speed internet penetration.
The problem? Do you want to keep these American gamblers out of your market, when they could substantially increase your revenue by inviting them in?
Well no, you say, bring them in to our website.
Here is the problem that all nations will face in the new unfolding open online marketplace. Countries, like the US, will ban your site, if you ban their sites. So Svenska Spel will have to let their citizens out, if they let others in. This will be a hard decision for some national gaming monopolies but the change in the U.S. law will also make the overall EU decision easier. The monster revenue potential of opening to the United States market will be just too much to ignore. What will break down trade barriers is not thoughtful regulation but the specter of lost profits.
 Reacting to a court ruling in the State of Kentucky, Microgaming has announced it will restrict (ban) access to all of its poker platforms from thirteen states in the U.S. Citing "laws already on the books but not being enforced" the blocks will go into effect "within the time period for the Kentucky ruling", which is now less than 30 days.
The states to be blocked are: Illinois, Indiana, Kentucky, Louisiana, Michigan, Nevada, New Jersey, New York, Oregon, South Dakota, Washington, Wisconsin, and Utah.
The gaming websites that run on the Microgaming platform are most notably: Doyles's Room, Gnuf and all Eurolinx affiliates.
Once again the various political entities in the U.S. are legislating at cross purposes much like the confederacy of the European Union. While the U.S. Federal government is moving to regulation, tax and control online poker; individual states are seeking to restrict internet access and control the hearts, minds and wallets of their citizens.
 Costa Rica has become the most recent nation to step up its demands that the United States honor its obligations under the treaties of the World Trade Organization. Until now, Costa Rica has let Antigua and the European Union push the U.S. for WTO trade compensation but now Costa Rica has decided to assert its claims. So the continuing international Internet gambling dispute, potentially valued in the billions of dollars, adds another player. Costa Rica and Antigua separately filed for World Trade Organization arbitration on January 28th, seeking compensation from the United States as a result of the U.S. withdrawal of its commitment on cross-border gambling services.
With each new dispute and filing, the potential that previously "completed" negotiations with the nations of the European Union and others become more likely to fall apart. Why would the E.U. take less than Costa Rica or Antigua over the same trade violations? The Costa Rican arbitration filing makes it possible for the E.U. to reconsider its settlement with the U.S. and (re)join the arbitration proceeding, opening up a new phase in the Internet gambling trade dispute.
"The decision by Antigua and Costa Rica to take the United States to arbitration will test the limits of the WTO process and squarely challenge the U.S. resolve to withdraw its GATS commitments; if the U.S. finds the decision of the WTO arbitrator unacceptable, under procedures outlined in the GATS, it could unilaterally withdraw, creating an unprecedented crisis of confidence in the global trading system. The best solution remains for Congress to pass legislation that would create a legal and regulated framework for online gaming in the United States and for the United States to remain in the GATs schedule to provide all providers legal protection under the WTO."
"If the U.S. withdraws following another adverse arbitral decision, the country would face potential retaliation from all WTO Members affected by the arbitration, a pool of countries including the EU, Canada, and Japan; inviting sanctions at a time when both the U.S. Administration and Congress are both striving to stimulate an economy on the edge of recession seems foolhardy at best, especially when draft domestic legislation already exists that would create a renewed flow of both business and tax revenues throughout the nation's gaming sectors."
 The World Trade Oganization began life on 1 January 1995, but its trading system is half a century older. Since 1948, the General Agreement on Tariffs and Trade (GATT) had provided the rules for the system. [from WTO website]
"Essentially, the WTO is a place where member governments go, to try to sort out the trade problems they face with each other. The first step is to talk. The WTO was born out of negotiations, and everything the WTO does is the result of negotiations.
Where countries have faced trade barriers and wanted them lowered, the negotiations have helped to liberalize trade. But the WTO is not just about liberalizing trade, and in some circumstances its rules support maintaining trade barriers — for example to protect consumers or prevent the spread of disease."
This week poker players around the world learned a very big lesson: When the biggest, wealthiest, most powerful government on earth does not want you to play online, you are not going to play online.
Today the WTO Antigua-Barbuda dispute with the United States was settled for $21 Million a year not the $3.2 Billion previously awarded. A few days ago the European Union settle its similar dispute with the United State with some minor trade concessions.
 It would seem that the more action taken by individual national governments the less clear the legality of the online poker industry becomes. Take a look at a few of these comments made over the last several days.
"The US trade representative said press reports had 'misrepresented' an agreement with the European Commission this week to resolve a trade dispute over the US ban on online gambling. A spokeswoman said the agreement, in which the US offered concessions on the postal, courier and other sectors, would not involve "any change" in US law or practice and was simply intended to provide greater legal certainty to some sectors."
One wonders how 'concessions' do not involve 'change'?
The Guardian Unlimited ran a unique and comprehensive discussion on the state of online poker in the United States, several sections are excerpted below with added links for those who might like a fuller view of the entire legal and international trade process unfolding.
More than 100 of America's top poker players descended on Washington earlier this week to lobby politicians to rescind the controversial law that aims to prohibit online gambling.
Earlier this week the World Trade Organisation and the US announced that they needed more time to work out the envisaged billions of dollars worth of compensation, as the ban (Unlawful Internet Gaming Enforcement Act) breaks global trade rules.
At the same time, American legal and banking experts are attempting to decipher just how the ban will work when the law is finally implemented.
It was last October the then Senate majority leader Bill Frist, a Republican, pushed though the Unlawful Internet Gambling Enforcement Act (UIGEA), almost his last accomplishment before he retired, to protect children and problems gamblers from going astray.
The UIGEA does not ban online gambling per se but, when implemented, makes it illegal for banks and credit card companies to facilitate payments to and from gambling businesses.
 Just when it looked like the United States was going to buy its way out of the World Trade Organiations rulings based on the Unlawful Internet Gaming Enforcement Act, another shoe dropped.
Antigua and Barbuda, which won the original WTO ruling, has announced that the $3.4 billion judgment against the US was only the first step. It seems that:
"The $3.4 billion is just what we're entitled to by virtue of them not having complied with the decision."
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The decision, of course, being the restraint of trade issue when the US closed its cyber-borders to other countries. But it seems there are more damages to be discussed:
"We still have yet to file a claim that addresses the US withdrawal from the 1995 General Agreement on Trade in Services (GATS) treaty which allows international access to the US online gaming market."
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Early suggestions are that this second claim will be at least as large as the first, bringing the total claim to over $7 billion. Add that to the European Union $15 billion claim against the US for withdrawing from GATS and it appears that the US may not have enough trade concessions available to support the UIGEA.
It would seem that Goliath may want to rethink the evils of online gaming before the wax in the bald eagle's wings begins to melt from flying too close to the Caribbean sun. (Mixed metaphors courtesy of my freshman 'Myths and Fables' course or was that the 'Introduction for American Politics'?).
 I want to ask every US poker player a question:
"What have you done lately to repeal the Unlawful Interent Gaming Enforcement Act?"
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I want to ask all non-US players a slightly different question:
"Are you aware that emails to government officials are effective no matter who they come from?" and "Wouldn't you like the US fish back in the online poker pond?"
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Below is a very clear statement (OK, so its a lot more clear with my added comments) of what you can do today in five minutes to get the US Government to back off on the UIGEA. I will work! Take the time to do something to defend your poker freedom today.
This comes from the Antigua Online Gaming Association, who are of course in this for the money. Hey everyone is! But in this case they happen to be on our side.
As you may be aware, online gaming has been under attack by the United States for the last decade. The Government of Antigua and Barbuda has successfully challenged the malicious prosecution of Antiguan operators in the World Trade Organization. The WTO has found that the US's application of its laws against Antiguan entities is protectionist and in violation of the General Agreement on Trade in Services.
This is absolutely true but the US government is attempting to ignore this ruling even though it may cause severe trade problems with the European Union and several other major trading partners. The issue here is not gaming, the WTO rule that was used to make this decision has a wide range of applications on a whole variety of trade issues.
Now that Antigua has won the legal battle, it can use political support in Congress. Here's how you can help. Please email and phone your Representative in the House of Representatives and your two Senators. Remind them that the United States needs to abide by the decision in the Antigua-Gaming matter if they expect other countries to comply with WTO decisions in favor of the United States.
Literally Billions of dollars of trade rulings in favor the the United States could be in peril if the US ignores the Antigua decision.
Here is a link to a letter to the USTR from Representative Ros-Lehtinen, the ranking Republican on the House Committee on Foreign Affairs:
Rep. Ros-Lehtinen eloquently noted, "...our failure to resolve this dispute may harm our credibility as we seek to press countries like China regarding their violations on a range of issues, including intellectual property protection, subsidies, and currency manipulation." She further warned, "In the event the United States fails to reach a satisfactory resolution of the Antigua dispute, it could provide China with an argument to ignore a WTO decision favorable to the United States."
Please send the link above to your Representative and Senators. Ask them to send similar letters to the United States Trade Representative. Let them know you vote, you pay taxes, and you think the United States should comply with the decision in the Antigua-Gaming matter.
Don't assume anyone in Congress knows this information, further don't assume they know you know. Its a bluff, call them on it now, with a quick email.
To contact your Representative and two Senators, follow the links below or call the Capitol switchboard at (202) 224-3121 and give them your zip code. Make sure you call three times.
US House of Representatives
US Senate
Take a Stand! You can do it while playing a Sit-n-Go, which is something they want to take away from you.
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