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United States, Online Gaming and the World Trade Organization

23 November 2010 by admin

New Jersey, or more specifically Senator Raymond Lesniak, seems bent on thumbing its nose at the lawmakers who created the Unlawful Internet Gambling Enforcement Act back in 2006. The bill that would legalize and regulate online gambling in New Jersey is not only for New Jersey residents; that bill would also allow Atlantic City casinos online counterparts to accept foreign players too. And that is a bit of a thorn in the side of the World Trade Organization.

The WTO is swinging into play because if New Jersey’s bill passes and foreigners can play in a U.S. run online casino it has the potential to open up international trade issues…again.

That is right! New Jersey and Lesniak are looking to poke and poke and poke at U.S. lawmakers for signing such a poorly written bill like UIGEA into act. Back when UIGEA was signed into law the QTO had to deal with claims of infringement on international trade agreements—U.S. lawmakers may think they can tell U.S. citizens what is and what is not good for them, but they cannot tell foreigners that. After UIGEA was passed, Antigua and Barbuda put in cases against UIGEA and won. The European Union is also not pleased with UIGEA, viewing it as an offense of what Europe has to offer and limiting the potential to profit from business with U.S. citizens.

Lesniak is hoping to show lawmakers on the federal level that UIGEA is silly and that it is possible to regulate online gaming to allow U.S. players to play. And he does not mind bringing in international trade issues if it will draw Washington’s eye to it:

“We are going to be raising World Trade Organization issues by taking international gaming in New Jersey and showing how juvenile our federal government’s policy is with regards to online gambling. It makes no sense, we are trying to isolate and segregate something people want to do, they do everywhere, and we create a mass of restrictions that is unconstitutional and quite frankly just dumb in terms of governmental policy,” Lesniak said.

That has got to be one of my favorite quotes in regards to UIGEA. But Lesniak does have a point. UIGEA is on the unconstitutional side. While U.S. citizens can have freedom to choose what religion they wish to practice, federal lawmakers have taken away the choice of U.S. citizens to spend the money they have earned on online gambling and, at the same time, taken away the choice to play casino games online as a form of entertainment.

While Representative Barney Frank has been working to overturn UIGEA for the last few years, Lesniak has made faster progress. The good news about this is that if New Jersey Governor Chris Christie signs the New Jersey bill into law and New Jersey can successfully regulate online gambling within their state and show how regulating online gambling can generate a profit, it will be possible for Frank to use New Jersey a case to back up his quest overturn UIGEA.

If Governor Christie can sign Lesniak’s bill into law by the end of this year, Atlantic City casinos could have their online counterparts up and running some time in 2011. But those online casino counter parts have to located within Atlantic City limits in order to fall under the regulations already written into the bill.

New Jersey is on its way to lead the U.S. into online gambling regulation. And if it succeeds, which seems likely, the revenue generated in New Jersey will serve as an example to Washington, and will most likely cause other states to legalize and regulate online gambling; Florida and California lawmakers are already in talks about doing so. Hopefully World Trade Organization issues will be close to a minimum. Although the federal government could make things a lot easier if they were to just repeal UIGEA and regulate online gaming.

4 Responses to “United States, Online Gaming and the World Trade Organization”

  1. […] wary about the idea of having the government regulate online gambling. While I support the full legalization of online gambling in countries where there is no current fully legal market – such as in the United States – I […]

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  3. danielle jacobs says:

    I am really impressed on what Senator Lesniak did just to legalize online gambling in New Jersey. And I am looking forward that other states would follow this success 🙂

  4. James says:

    If this passes, it will be interesting to see how the WTO reacts. It’s an interesting situation, because the state of New Jersey does not have a treaty with the WTO, but the U.S. federal government does. However, the Constitution does not allow states to sign their own foreign treaties. This should be interesting.