by Hillary LaClair, Senior Editor January 10, 2009
Despite the numerous amount of online casinos licensed an operated in Antigua and Barbuda, the two nations are facing the same economic recession as the U.S. Similarly, the country’s leaders have asked for loans to create a more fruitful work environment. What has Antigua in an uproar, however, is that the settlement agreed upon by the U.S. – that has yet to be paid – would more than cover the sought after loan.
The World Trade Organization ruled some time ago that the U.S. pay Antigua $21 million in damages caused when the U.S. placed a ban on offshore internet casino gambling. Although several deadlines have come and gone in the year since the ruling was made, the U.S. has continually failed to pay its dues. Every time that a deadline would pass, U.S. Trade Representative Susan Schwab would initiate negotiations with the country, rather than pay out on its debt. The rumors that the U.S. would build a military base to compensate for this debt were found to be untrue.
A spokesperson claims on behalf of Antigua that the country has applied for a $30 million loan from the Caribbean Development Bank to create more jobs and boost the economy. The financial crisis has apparently reached to a level of severity that may cause Prime Minister Baldwin Spenser to suspend income tax in order to bailout the island residents.
When one considers the U.S. national debt, and the money thrown away on needless endeavors, such as the space program, $21 million does not amount to much. The stubbornness of the current administration in refusing to pay its debt to Antigua has caused countless people suffering and impoverished conditions.
It is hoped that Schwab’s successor, Ron Kirk, will put an end to the charade. Kirk has always encouraged free trade to flourish in his legislative history. “Trade has been one of the only bright sports for the U.S. economy, and the Obama team is going to needy every tool in its tool box,” said U.S. Chamber of Commerce Vice President, John Murphy.
Millions of Americans owe their jobs to the U.S.’s ability to sell goods and services overseas or vice versa. In North Texas, where Kirk served as a mayor in Dallas, 425 foreign-operated businesses and multinational corporations account for more than 250,000 jobs. Many of these positions are the result of the international free trade agreement, which made it easier for Canada, the U.S. and Mexico to trade products and services. The payment to Antigua is not only vital to that nation’s survival, but to its own in terms of maintaining a healthy relationship with offshore trade markets. Additionally, the prospect of an legalized online casino market may prevent another WTO dispute, wherein it becomes the responsibility of the U.S. to pay for a failing economy.
In the next four years, Kirk’s negotiation and political skills will be put to the test. Antigua’s Finance Minister, Dr. Errol Cort, has exhibited an enormous amount of endurance throughout the negotiation process, asking for his people to have patience even during such economic turmoil.
The notion that U.S. Trade Representatives had reached a deal with Antigua that relieved the nation of a prior settlement, reported as fact by the Salt Lake Tribune, was found to be inaccurate. An article of December 26th, written by Cathy Mckitrick, told readers that the latest WTO negotiations ended in a settlement agreement on damages owed to Antigua in banning offshore online casino. This is not entirely true, however, as Mckitrick’s sources were more than a year old.
The article claimed the deal was not announced publicly because the U.S. had dubbed it a national security issue, and referred to comments made by Peter Riggs of the Forum on Democracy and Trade, wherein he shunned Trade Representativesfor keeping it secret. In turn, the article caused much speculation that a military base was to be built in Antigua in lieu of a $21 million settlement.
“In 2007, Antigua and Barbuda sought the ability to violate U.S. intellectual-property law in exchange for these restrictions.
Instead, the U.S. trade representative negotiated a different agreement, with concessions that have not been released due to "national security" concerns.”
An additional editorial was published in the Salt Lake Tribune on January 5th, which continued to report on the outdated trade agreement, as though it were current and relevant to the latest trade negotiations. Online Casino Advisory reports, however, that after researching the matter, their team was unable to confirm that this was true.
The team later contacted Mckitrick, who cited sources that were over a year old, and concerned an entirely separate matter between the U.S. and the European Union. The quote published from Peter Riggs had in fact, not pertained to Antigua at all. Had the article reported on the EU, rather than Antigua, it would have been factual, as the last WTO dispute ended in an undisclosed settlement. The EU is next in line for further WTO negotiations, however.
The article has caused the inaccuracy to be published in many media outlets – in online casino forums and international newspapers, including the Antigua Sun. Several attempts were made to gain insight as to why Mckitrick did not properly check her facts, but have so far been unsuccessful.
Online Casino Advisory reports, “This was brought to Mckitrick’s attention, but no retraction nor correction was forthcoming. Instead, as noted about the editorial, the Tribune continued to act as if the initial story had been flawless. Meanwhile, as reports continued to wind around the Internet, the Antigua Sun wrote about the possibility of an undisclosed deal.”
Mark Mendel, a legal representative for Antigua in the WTO negotiations has assured that no settlement has been reached, and that Antigua is still determined to collect on the $21 million that was promised, and to which several deadlines have not been met. Mendel claims that he does not trust the source of the rumors. It is uncertain how long the negotiations will continue, or whether they will extend into the upcoming U.S. administration.
Land casinos continue to struggle with the plummeting U.S. economy, with revenues expected to decline into 2010. The customer base is thinning as middle class Americans reprioritize their finances. The same cannot be said of online casinos, which continue to flourish, despite the recession, and their land counterparts want a piece of the action.
Las Vegas casinos in particular are warming to the idea of internet casinos, where the same variety of games is offered – from internet slots, video poker and bingo to sports betting. Strip casino operators feel that if their services were more easily accessible, specifically via the internet, they would see more visitors and higher revenues. The prospect of international gamblers is just as appealing.
Should the land casino industry collapse in Las Vegas, 26 percent of Nevada’s workforce would suddenly find themselves unemployed. This accounts for 732,000 jobs and $29.4 billion in wages.
With this in mind, David Schwartz of the UNLV’s Center for Gaming Research has advocated a legalized internet gambling industry. “Basically people are allowed to gamble but they don’t have any of the protections they would get from legal gaming,” said Schwartz. “Having legal online gambling would really help the Strip casinos with their marketing. It would help them find out who is gambling out there.”
For many in the U.S., a trip to the casino means plane tickets, hotel rooms and time away from home, as gambling is banned in 11 States. While many gambling in online casinos cite this as the reason, some feel taking a trip to the casino is all the fun. “You get something for your money instead of sitting in front of a computer,” opines Joe Bonin.
Industry experts claim that the addition of an online casino option to Las Vegas establishments would be more of a marketing tool than an economic one, as the revenue would be miniscule compared to that of live casinos. “I don’t think it would magically save everything,” Schwartz added. “It may help reverse the decline, but obviously they are going to have to get more people coming on here if they want to bring the revenues up.”
Casino operators now look the President-elect Barack Obama to overturn anti-gambling laws as the only obstacle that stands in the way of the industry. Although internet gambling has been the recent hot topic of U.S. legislation, no timeline has been determined for the reconsideration of the Unlawful Internet Gambling Enforcement Act (UIGEA).
David Schwartz has served at the University of Nevada Las Vegas since 2001, where he oversees the acquisition of new material for the Center. Schwartz gives lectures and consultation on gaming related issues as well.
He was born and raised in Atlantic City and holds a master’s in anthropology and history. From there, Schwartz earned a doctorate in US History at UCLA. As one of the youngest Ph.D.’s at UCLA, he filed his dissertation, Suburban Xanadu. Now a published book, Suburban Xanadu has, according to UNLV, “charted the evolution of the casino industry on the Las Vegas Strip from 1945-1978.”
Despite the recent alterations in the UK Advertising Standards Authority’s regulations, online casino operators continue to struggle in releasing appropriate adverts. The ASA has banned a Ladbrokes television advertising campaign because it allegedly links online casino gambling with “excessive risk taking.”
Two adverts came into question, as they display esteemed online casino gamers Willem Snyman and J “snake eyes” Kowalski reminiscing over dubious adventures as younger men. The first advertisement shows a young man diving with sharks with raw meat sewn to his adorned seal-like wet suit, while the other features a man sky diving with a parachute constructed of a potato chip package.
At the end of each commercial, viewers are prompted with the quip, “If only he’d seen Ladbrokes.com, his thrill buds would have been quenched.” The ASA felt that these adverts “portrayed gambling in a context of toughness,” or that it painted online gambling as an excessive risk.
Ladbrokes feels to the contrary, however, stating that the asinine nature of the advertisements set off any impression that the danger of gambling is appealing. “Ladbrokes fully supports the code of practice relating to gambling advertising but this ruling is an example of political correctness going too far,” said John O’Reilly, managing director at Ladbrokes. “The idea that an advertisement using absurd humor is somehow going to make gambling dangerously appealing is nonsense.”
The online casino has responded to the banning of their ad campaign, with a full page print in The Sun newspaper. The advertisement, directed at the ASA, depicts a photoID kit and the headline, “Missing: A Funny Bone.”
Online bingo players will be eager to learn the results of this year’s WhichBingo UK Awards. The 2008 ‘Site of the Year’ and ‘New Site of the Year’ have been announced, after a vigorous search through hundreds of bingo websites.
Online UK bingo rooms of all caliber were put through the test, allowing “minnows” the same opportunity to win as the leading websites in the industry. In the end, the results came down to a vote in December, where bingo players were given the chance to voice their opinion. A total of more than 240 UK websites were included in the voting process, as well as international bingo rooms.
As a result, WhichBingo UK has awarded Jackpotjoy the honor of ‘UK Online Bingo Site of the Year 2008. Bingo Playground received the ‘UK New Online Bingo Site of the Year 2008’ award, and Bingo Billy, the ‘International Online Bingo Site of the Year 2008.’
“WhichBingo Site of the Year 2008 – it’s a fantastic achievement – I’ve got a brilliant group of people working for Jackpotjoy and the best chat hosts in the business. We are delighted with this award,” said Noel Hayden, Jackpotjoy CEO.
The WhichBingo awards are the longest-running in the industry. 2008 marks the sixth year of this tradition, as well as the highest voter turnout. “2008 has been a remarkable year for online bingo. Our annual awards give players their opportunity to tell bingo sites who they think is delivering the best in entertainment, value and prizes,” said Phil Fraser of WhichBingo. “Congratulations go not only to our winners but to all the sites that came in the top 10 of each award.”
Despite anti-gaming laws, online casinos continue to thrive in the U.S. Experts say that the largely unregulated industry, 1,300 websites strong, is contributing to an increase in problem gaming in the U.S. In 1997, studies showed that casinos earned a revenue of $650 million annually – a number that has increased to $2 billion in the following years.
The lack of U.S. regulated online casinos forces gamblers into the arms of shady operations who operate on offshore servers. As such, these operations can fold and run virtually overnight when suspected of fraud. Many closely monitored internet casinos, with age restrictions, deposit limits and self-exclusion policies have been made unavailable to U.S. players. Currently, an estimated $5 billion is spent on problem gamblers in the U.S. every year.
American youths are most commonly affected by unregulated internet casinos, according to the American Psychiatric Association. Gambling rates are highest for people in their teens and twenties. A monitored industry could mean higher age restrictions and enforcement in the U.S. that is desperately needed for some. Nearly every regulated internet casino now requires a valid form of identification in order to deposit money, in most cases a valid photo ID. Additionally, many of these establishments allow their users to put a deposit or spending limit on their account, to prevent such occurrences. Some casinos have even implemented a self-exclusion policy, where users can opt to have the casino decline their account for a period of time – an option that is rarely available in land counterparts.
“Most of the time parents aren’t monitoring what their kids are doing on the internet, so they’re just sort of free to gamble their heart’s content,” says Jean Stringer, MFT, a marriage and family counselor.
Approximately 10 to 15 percent of U.S. and Canadian youths say that they’ve dealt with issues related to gambling. In this group, 1 to 6 percent are believed to have gambling addictions – showing several signs of problem gambling, such as preoccupation with gaming, the need to increase their bets every time, restlessness when not gambling, using internet casinos to escape from “difficult emotions,” and chasing losses with further wagers.
Advancing technology has now allowed for several university students, as well as high school students, a credit card at their disposal – a vital instrument in gambling online. According to an article in littleabout.com, credit cards are the “mechanism that makes rolling the internet dice possible,” and that young people are “easily lured by the power of the plastic cards issued be fiercely competitive finance companies lending money at sky high rates.”
“You invest a small amount of money, and you receive a large return. Once that happens, there’s a reinforcement element,” Stringer added. “There’s an element of denial. There has to be a certain commitment to realizing you have a problem and really wanting to stop it.”
Stringer concludes, “I think there should be more education in the schools to warn young people {about} the potential effects of gambling on the internet.”
According to the Telegraph, security analysts have found that a branch of al-Qaeda has utilizied internet casinos to launder money for attacks. The newspaper reports that a group of computer experts have created an “online University of Jihad,” where individuals throughout Britain are trained as potential terrorists.
The online University was created to avoid its recruits travelling to Pakistani camps, and its software, Mujahidden Secrets 2, is impervious to intelligence agents. As such, al-Qaeda militants may communicate using e-mail without retribution.“Al-Qaeda want to create a University of Jihad online, both in a spiritual and financial sense. They want a community that can carry out attack without having to travel aboard for training,” says Terry Prattar, a specialist in counter-terrorism.
Prattar notes that al-Qaeda has made use of the internet to finance this University, including the use of online casino gambling websites to launder money. Recruited youths are prompted to post on online forums to “prove themselves.”
Additionally, a specialist group known as the Al Ansar Media Battalion, has posted videos of American and British troops under physical attack to “make people here feel they are taking part in what [is] going on over there,” according to Pattar.
The internet is being used in many ways to promote insurgents. One individual, dubbed the Bagdhad Sniper, was said to have gathered a massive following through the use of social networking site, Facebook. However, coalition forces believe that they have since killed him.
The terrorist organizations in Iraq, Pakistan and Afghanistan are additionally using Google maps as an information resource for targeting designated victims.
Security analysts are now encouraging moderate Muslims to post in the online forums to engage in rational discussion among young people. An intelligence source has described this methods as one of “ideas, not weapons and a campaign of internet, not training camps.”
Online casino advocates feel that the proper regulation of internet gambling could be advantageous in the war on terror. Internet companies such as E*Trade, which has been fined on two separate occasions for failing to properly implement money laundering screening, have received moderation – therefore tightening their ability to detect money laundering.
Currently, the internet gambling websites used by terrorists are lacking any source of U.S. regulation. As such, the government is not privileged to vital information as to their whereabouts. E*Trade claims that they since have put a safeguard in place to avoid future money laundering.
“E*trade upgraded its system to provide an automated method to monitor for this particular activity, and those systems have been in place for over a year,” said company spokesperson Pamela Erickson.
Similar regulations could be applied to online casinos, which would then serve as a valuable tool for the government against any person or terrorist organization that is unlawfully using gambling sites for this purpose. Currently, U.S. officials report that they are using anti-gambling laws to prosecute those involved in money laundering. However, there is much information that remains unavailable while online gambling remains a criminal offense.
Casinomeister.com has added another rogue online casino to its list. Microgaming powered Grand Prive has been labeled untrustworthy because it has taken its leave from the U.S. market. All Microgaming casinos have exited the U.S. following the Kentucky domain seizures. The difference with Grand Prive is that is has abandoned its affiliate programs.
Online casino affiliates are website operators that are awarded a cut of the profits when referring customers to the casino. Usually, and as was the case with Grand Prive, the casino pays the affiliate for the entire duration of the player’s stay with the casino.
“Trust is a must in this industry – and in the midst of flaccid regulators and licensing jurisdictions, self regulation is the only recourse when trust has been discarded and kicked to the curb,” reads a notice on Casinomeister. “Here we have a Microgaming powered casino group announce their departure from the US market, and closing of all affiliate groups.”
Grand Prive will cease future payments to its previous U.S. affiliates, even while their referred players are active. The company will continue to profit from the customers that came from the affiliates, and the affiliates will be out of a paycheck. “Baaaad casino practice,” says CasinoMeister. “If they are willing to do this with their business partners, how do you think they plan on treating their players?”
During the first bout of the Kentucky domain seizure case, Microgaming’s website went offline. The gaming provider began to block all U.S. residents, without giving notice. It relied on its affiliates to explain to these users that they were no longer welcome. Now, Microgaming intends to leave hundreds, if not thousands, of its business partners in the cold.
The Grand Prive Group prompted its affiliates to visit the Villa Fortuna Affiliates group, which they say is “…up, running and ready to forge a new business relationship with you.” However, the group will not accept U.S. business.
Casinomeister has listed Belle Vegas Online, Casino Grand Bay, Kasino Grand Bay, Grand Bay Poker, Lake Palace Casino, Jupiter Club Casino, Road House Reels Casino, Fortune Junction Casino, Jackpot Wheel Casino, Villa Fortuna Casino and Villa Fortuna as rogue websites associated with Grand Prive.
While Casinomeister is an online casino affiliate, it has never been a business partner of Grand Prive. The statement concludes, “I have never been an affiliate of the Grand Prive Group, so this rogue listing is not out of spite. This listing is to inform the online casino community that this sort of underhanded behavior is unacceptable.
“Avoid these casinos at all costs.”
The group is dedicated to providing internet gamblers with a comprehensive list of trustworthy and also dishonest gambling sites. It also provides its members with free arbitration when a casino is suspected of foul play.
by Hillary LaClair, Senior Editor December 31, 2008
The U.S. may possibly have set a record number of dangerous precedents for the world of internet casino gambling this year – the latest of which, although maybe inadvertent, could criminalize online casino affiliate websites.
Earlier this year, New York State passed legislation forcing Amazon.com to pay taxes, despite Amazon not having a physical presence in the state. A prior Supreme Court ruling has relieved Amazon of having to collect NYS taxes, stating that without the e-tailer’s warehouse or office in the state, it is the customer must declare the purchase on their next tax return.
As a result, Governor David Paterson and his legal team have argued that the affiliate marketers are Amazon’s physical presence. New York now intends to collect $50 million annually from the online retailer. Should the court rule in favor of New York, internet affiliate programs would be treated as extensions of the company’s that they advertise. Perhaps this is good news for New York, but it is potentially devastating for online casino affiliates – especially those based in the United States.
Currently, online casino affiliate programs avoid legal prosecution from the U.S. because they are not gambling websites.Affiliates may advertise for internet casinos, but are not responsible if the websites accept U.S. wagers. A victory for New York would mean either force the affiliate websites to block U.S. users or to shut down altogether.
Joe Brennan Jr. of iMEGA particularly fears for the outcome of the case. “You now have states that are cash-strapped and looking for new ways to bring in revenue,” said Brennan. “New York has been forward-thinking, so to speak, when it comes to approaching the internet.”
It is his belief that New York may soon follow in the footsteps of Kentucky, and pursue legal action against gambling sites. A ruling by the Kentucky Court of Appeals, according to Brennan, may allow New York to attempt a seizure of websites, including Amazon.com. “All you have to do is look at what is going on in Kentucky and see that states may have a leverage option available to them should Kentucky prevail.”
New York is among 11 other U.S. states that have banned gambling from its borders. As such, should the upcoming administration over turn the anti-internet gambling laws, NY may still decide to prevent its residents from participating.
However, Peterson is seeking a major expansion of gambling in the state to allow more multi-state lotteries and increase the hours of operation for Quick Draw games and video-lottery parlors. With the $15.4 billion deficit in the 2009-10 fiscal year, Paterson may turn to the internet to compensate. A gambling expansion could result in $308 million. If he were to consider online casinos, millions would turn into billions.
by Hillary LaClair, Senior Editor December 30, 2008
The U.S. has been involved in negotiations with Antigua and the World Trade Organization, in Antigua’s attempt to collect on a $21 million annual settlement. The fine was levied as the result of U.S. bans on offshore internet casino gambling, which the WTO ultimately decided were not only a display of protectionism, but a violation of free trade and the General Agreement on Trade in Services (GATS).
Since the settlement was reached, however, the U.S. has failed to pay out on a number of given deadlines. Antiguan Finance Minister, Dr. Errol Cort, has asked that Antigua be patient with the U.S. Cort noted in fall that negotiations with the WTO might continue into the next year. Rumor has it that a deal has been reached with US Trade Representative Susan Schwab.
An article in the Salt Lake City Tribune says that the U.S. is believed to have been relieved of the $21 million per year settlement, for reasons that are classified as a national security issue. Many are wondering what the U.S. has offered in lieu of the ban of online casinos.
One conclusion has been that the U.S. might place a military base on Antigua, to create hundreds of jobs as well as stable revenue flow for the nation. If this is true, the outlook is grim for the future of online casino gambling in the U.S. The Department of Justice continues to lash out at offshore casino websites, and the installment of a military base essentially means that the U.S. will go to drastic measures before admitting fault for discriminating against overseas gambling establishments.
Anti-gamblers are concerned about the potential of a military base Antigua. The worry stems from the Philippines, where decades of an U.S. military base have resulted in black markets, drug-dealing, illegal gambling and prostitution.
Peter Riggs for the Forum on Democracy and Trade is disturbed to find that the terms of the agreement have been kept a secret. Riggs’ suspicion is that, rather than a military base, the agreement involved research and development services, as well as associated tax credits, affecting the way states do business.
“This is potentially a very big deal,” said Riggs. “We were stunned that they classified it as national security and got away with it.”
WTO negotiations do not stop with Antigua. The European Union is slated next on the list, with much heavier claims. The first online gambling website was launched in 1995. Now, more than 2,000 offshore sites are in operation, and will soon prove a difficult industry for the U.S. to combat.
