As I have previously told my readers, I recently had an eye-opening experience while visiting Antigua and Barbuda and meeting with members of the Antiguan government. I met with Leroy King, the CEO of the Financial Services Regulatory Commission (the Commission); Kaye McDonald, the Director of Gaming (a division of the Commission); and Cliff Williams, a regulatory department manager.
They explained that Antigua brought the World Trade Organization (WTO) dispute on behalf of legally licensed gaming operators in Antigua who want to provide gambling services on a remote, cross-border basis to U.S. customers.
This is particularly important to Antigua, because the small developing nation has limited natural resources and relies heavily upon tourism. Of course, tourism is at the mercy of natural disasters, economic realities, and other factors. Therefore, since 1982, Antigua enacted legislation geared toward the provision of international financial services in order to enable economic diversification.
Antigua currently licenses and regulates only 38 gaming companies. Those companies must reside in Antigua, which means employment for Antiguan citizens. While Antigua's economy is growing, the current position of the U.S. regarding remote gambling threatens the country's economy.
The Antiguan government has concluded that many legislators and government officials incorrectly believe that all "remote" betting violates state and federal law. In fact, the U.S. sanctions a vast remote betting market.
First of all, what is "remote" betting? It is gambling such that the bettor and the operator are not in the same physical proximity. The bettor is in one physical location and communicates his wager via telephone or other electronic means to an operator at another location.
Antiguan officials seem to be much more educated about American gaming laws then we are. Since the '70s, U.S. wagering companies have openly offered state-sanctioned intrastate remote betting in the U.S..
Currently, 18 states have enacted licensing schemes that sanction and regulate remote pari-mutuel account wagering. Operators accept cross-border wagers from residents of at least 39 states. The U.S. pari-mutuel betting industry now encompasses a network of more than 1,000 wagering sites nationwide, including racetracks and off-track wagering facilities.
Americans wager approximately $15 billion per year on horse and dog races. For the past few years, more than 85 percent of this total wagering "handle" was placed at off-track locations. The National Thoroughbred Racing Association estimates that remote betting makes up more than 20 percent of the pari-mutuel handle.
In summary, in different places in the U.S., we have remote betting for race- and sportsbook wagering and we have remote lottery play and other types of remote gambling.
Despite the existence of a multi-billion-dollar sanctioned remote gambling industry in the U.S., our government takes the untenable position that all remote gambling in the U.S. is illegal. If all remote gambling were illegal, it would also be illegal for Antigua to offer such gambling in the U.S. However, since we commonly know we can bet on a horse race or buy a lottery ticket remotely, the U.S. position could not possibly be correct.
Since the U.S. joined the WTO and agreed to be bound by international rules of fair play in commerce, something is going to have to give. The U.S. is a respected member of the WTO, and its current position is untenable. Some time this month, the WTO is expected to issue its ruling as to whether the U.S. is now in compliance. I predict the WTO will rule that the U.S. is not in compliance and then we will wait to see what position our government will take.
