We all know how the U.S. government feels about internet gambling – they don’t like it and will do anything within their power to stop it. However now, in a fascinating turn of events, the U.S. government’s battle against online gambling may have allowed one of their other foes a huge victory against them – Piracy! This week the World Trade Organization (WTO) has ruled that the nation of Antigua and Barbuda can suspend U.S. copyrights! Seems like Johnny Depp might not be the most famous pirate of the Caribbean for much longer!
Since the internet entered the public domain in the 1990s, the U.S. DOJ took the position that the Federal Wire Act bans all forms of online gambling and has worked indomitably to arrest, indict and impede online gaming sites and U.S. citizens who frequent them.
When you look at the amount of money that U.S. citizens spend on lottery tickets however, the government’s crusade against online gambling, seems a little bit overzealous and rather unusual.
Forbes contributor Mark Gibbs points to an article by Professor I. Nelson Rose in which he points out that American’s spend billions on lottery tickets. Citing figures from 2009 which saw $92.3 billion spend on gambling, Rose highlights that this is more than what was spent on all live events, concerts, spectator sports, movie theaters and all forms of recorded music combined!
Back in 1994, the Caribbean nation of Antigua and Barbuda passed the Free Trade & Processing act which allowed licenses to be granted for those who wanted to open online casinos. In a short period of time, Antigua started making a serious profit from internet gambling, which by the year 2000 had amounted to somewhere in the region of $1.716 billion. Cue the U.S. clampdown – before long Antigua went from having 59% of global online gambling, billions in profits and over a thousand people employed in the industry in 2001, to having just 7% of global online gambling and just over 300 people employed by 2007!
Antigua could see what the U.S. clampdown was doing to their most profitable industry by the mid 2003 and went about challenging the U.S. “total prohibition of cross-border gambling services offered by Antiguan operators.”
In 2004 the WTO Dispute Panel ruled in Antigua’s favor, finding that the U.S. restrictions on cross-border gambling were in direct violation of international treaties. The U.S. appealed, but it was in vain, they were given one year to sort out their “offending laws” – however, unsurprisingly, no correction was ever made.
In 2006 Antigua put in a complaint to the WTO about the U.S. failure to rectify the offending laws and the Compliance Panel found there complaint to be justified.
So this is where piracy comes into the equation, after the U.S. showed no willingness to comply with the WTO recommendation, Antigua put in a request to level concessions against them in a bid to counter the economic effect of their failure to allow cross-border gambling.
According to WTO rules, Antigua is permitted to ensure that their sanctions are a “practical and effective” way of inducing U.S. compliance and they chose to suspend payment of intellectual property rights.
A WTO meeting in Geneva on January 28th 2013 granted the Antiguan’s request!
“In other words, copyright for US works such as music, photographs, films, and books would no longer apply in Antigua and thus Antigua could provide those materials on any terms they pleased to anyone without compensation to whatever American entities own the works … to the tune of $21 million annually!”
A TorrentFreak report states that the Antiguan government is now planning to launch a website selling U.S. media to customers from all over the world and because they do not have to compensate the makers, they can pretty much chose to sell the goods for whatever price they see fit!
The granting of this concession is a huge victory for a small Caribbean nation against a global superpower, but as Gibbs points out,
“While there’s a certain justice in the WTO decision, the mechanism for extracting justice is going to heavily penalize and impact American business and not the people who created the problem in the first place: Overzealous US politicians and government bureaucrats.”
Gibbs believes that the U.S. government should attempt to settle with Antigua before the damage is done, however he isn’t overly optimistic that such a settlement can be reached!