I’ve been trying for months to get reporters to cover is the free trade angle of the Internet gambling ban. Not only is the U.S. trying to impose its own laws and values on the rest of the world, (1) it’s doing so in a manner that protects a U.S. company — Paypal — from overseas competitors, and (2) the exemptions the bill allows for state lotteries, horse racing, and fantasy sports are a blatant violation of the WTO.

The WTO allows a country to ban some goods and services within its borders (Muslim countries with alcohol, for example), but you can’t ban a good or service from another country while allowing it to be sold from domestic providers. That’s sort of the whole point of “free trade.” The gambling ban does exactly that.

This has already been hashed out before. The tiny country of Antigua filed a WTO complaint against the U.S. last year, well before this latest law was passed. Antigua won its complaint in March. The Bush administration — free trade champion through and through — has chosen to simply ignore the ruling.

What’s interesting is that under WTO rules, Antigua is then permitted to retaliate. And what’s really interesting is just how the plucky little islanders might retaliate:

There’s no appetite for slapping trade sanctions on US goods; that would hurt Antiguan companies and consumers far more than Americans. Instead, the country may refuse to enforce American patents and trademarks. This would make it possible for Antiguan-based companies to produce knock-offs of American intellectual property, like video and music recordings or computer software. Such a tactic would get the attention of major US firms like Microsoft Corp. and entertainment titan Time Warner Inc. It would also put tiny Antigua’s trade war against the United States on front pages around the world.

Remember, all of this took place before the latest bill, which I think has even stronger free trade implications than the 1961 Wire Act (which served as governing federal law on Internet gambling until last month). Enforce this bill, and you could well see a couple of dozen countries that house gaming servers follow suit, each declaring themselves safe havens for IP pirates. And not just tiny bumps in the ocean. Britain stands to lose a couple billion in tax revenue from this bill.

All of this could well mean a mammoth clash of wills and special interests is in the offing, with Big Pharma, Hollywood, Big Software, and RIAA butting heads with the moral crusaders, eBay, and professional sports. And that, of course, would be terrific fun for the rest of us.

And all because Bob Goodlatte thinks card playin’ is fer’ the devil.

Thanks to Cato’s Sallie James for the tip.

This entry was posted on Thursday, October 19th, 2006 at 5:13 pm by Radley Balko and is filed under Gambling and Poker, Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.