Thursday, February 28, 2013

Antigua, Duke Ferdinand, and World War $

Perhaps this isn’t news, but the United States is a piss-poor dancing partner. They always lead, whether you like it or not, and if they step all over your feet, they blame you. In that regard, they’re much like that popular, attractive person with whom you tried dancing at that freshman frolic back in high school, just not as drunk or sweaty.

So it is with the U.S. and Antigua. The U.S. is stepping all over Antigua’s toes, and Antigua has finally gotten tired of it and is threatening to stop dancing. The principal of the school has now stepped in, and maybe Christian Slater is getting involved... I dunno. I’m tired of the analogy. Did the Christian Slater reference date me?

As has been documented on this website, Antigua has announced plans to open up a “piracy” website on their island as a form of economic retribution for the UIGEA, which shut out a large and immensely profitable market for Antigua’s online casinos. This would not actually be piracy since piracy requires recognition of copyright laws. Antigua has been given approval to ignore copyright laws, thus making the “piracy” not actual piracy.

It was the World Trade Organization (WTO) that gave them clearance to do this after Antigua was victorious in multiple cases against the U.S. regarding the UIGEA. As if to convey beyond any doubt that Americans are a mob of children, the United States has been almost inspiringly intransigent, coming as close to literally putting their fingers in their ears and going “LA LA LA LA!” as I think is possible for an actual country.

Because the U.S. prefers reality to be whatever they say it is, they have begun a campaign of misinformation. It hasn’t been going too well, with most industry watchers rather firmly on Antigua’s side. But the U.S. persists in their attempts, and is at the very least muddying the waters, which is more success than they deserve.

The story out of the States remains as it was during the beginning of this kerfuffle back in late January: namely that Antigua has been belligerent with U.S. negotiators and has repeatedly rejected good-faith offers. Antigua, of course, denies this.

There are two primary reasons why I think that the U.S. is, for lack of a better word, lying when they say this. First, what in the history of the United States’ dealings with small nations makes anyone think that they are telling the truth? Their record on international relations is a carnival of terror that few other Western nations can match. Remember, the U.S. has already lied when they claimed to have won a case that they completely, absolutely, totally LOST. There was no question. They lost. They didn’t even bother to try to spin the story; they simply denied it wholesale!

Second, Antigua is well justified in rejecting anything other than the elimination of the UIGEA, because it violates trade agreements. There is no way that Antigua can be the bull-headed party in these negotiations, because all they want is for the U.S. to follow the trade regulations that the U.S. themselves wrote.

Just for the sake of argument, let’s posit that Antigua is indeed being as intractable as the U.S. is accusing them of being. What would that conversation look like?

Antigua: The UIGEA violates the WTO. We demand that it be revoked.
USA: No. We will give you other things.
Antigua: We don’t want other things. We want the UIGEA revoked.
USA: No. We will give you other things.
Antigua: We don’t want other things. We want the UIGEA revoked.

Even if we imagine the most inane negotiations possible, Antigua is the one with justice, such as it is, on their side. The U.S. simply cannot avoid reality, and that is coming through in their bizarre reactions to their ever-shrinking position (such as when they claimed to have won their case with the WTO immediately after actually losing their case with the WTO, and their succession of veiled threats to Antigua).

On a side note, even if the U.S. successfully bribes Antigua as they did with Canada and the UK, the trade violation remains! That point ultimately negates anything and everything the U.S. says. Just because a criminal has managed to placate any aggrieved parties doesn’t change the fact that a law was broken. As long as the UIGEA stands, the U.S. remains open to cases brought by any other countries. Will the U.S. bribe every country on Earth?

The members of CARICOM during the meeting at which
full support for Antigua was announced.
No matter how deserving of disdainful disregard America’s colossal temper tantrum may be, Antigua cannot, and will not, ignore it. Antigua has now enlisted the full support of CARICOM, the cooperative of Caribbean nations. This is a significant, if not entirely unexpected, development. I say that it isn’t unexpected because CARICOM has a solid history of collaboration among member states going back to its formation in the early 1970’s (and a history of getting screwed by the U.S.). It remains significant because, even though all of the Caribbean nations combined don’t even equal the population of Florida or the GDP of Nebraska, they represent more of what Antigua needs — more people, more money, and more voices. When in a fight with an overgrown baby, these are the only weapons that work.

That said, small nations banding together against a larger nation isn’t of much note aside from recognizing that it happened, and what the events may represent from a policy standpoint — fodder for think tanks and pretty much no one else. What makes the story a whole lot more interesting is the list of member nations of CARICOM.

CARICOM is composed of three classes of nations: Members, Associates, and Observing Nations. The three classifications are related to how engaged the nation is with the overall group, and also whether the overall group allows that nation to be engaged. So for example, Observer Nations engage in at least one of the policy committees, but have not yet been accepted as full members.

Among the full members is the expected collection of small island nations, but also found in that list is Montserrat, a British territory. Britain, of course, is the same nation that was bribed by the United States a few years ago to not make a fuss about the UIGEA. One can only assume that the Queen is none too happy with this turn of events.

Of course, Britain can’t get too upset with Montserrat, since the group of Associate Nations is composed entirely of British Territories, including the jewel in their crown: Bermuda. Indeed, the Associate classification was specifically created for the various British Territory nations that wanted to join the party, starting in the early 1990’s.

The story gets positively ridiculous when we see that Puerto Rico, a commonwealth of the very country that is causing this problem, is an Observing Member! Even more absurd, if that’s possible at this point, the U.S. Virgin Islands have been campaigning hard for the last two years to be allowed into the cooperative. That would put two segments of the United States' socio-political structure in direct opposition to the rest of the United States!

The U.S. has been battling itself over the UIGEA in the halls of congress for years (instigated by the alarmingly corrupt Bill Frist). It is now battling itself overseas. What’s next, interplanetary self-conflict? This is far more than the left hand not knowing what the right is doing. This is the left hand actively plotting to kill the right. This is bad comedy.

The CARICOM backing is doubly interesting because of the possible effects that it will have on other countries. To see what I mean, let’s look at Brazil. In 2010, Brazil threatened to appeal to the WTO for similar sanctions, totaling $238 million — over ten times Antigua’s total. (To be fair, Antigua initially requested sanctions of over $2 billion.) They haven’t made much noise since then, but CARICOM may be the poke that Brazil needs to re-enter the ring. Two members of CARICOM, Guyana and Suriname, share borders with Brazil. Another Observing Nation, Venezuela, likewise shares a border. Brazil now directly abuts a whole bunch of countries that are making official statements in defiance of the United States.

Likewise we have Mexico, the largest Observing member of CARICOM, and suddenly a major player in the U.S./Antigua dispute. Apart from Brazil, Mexico is the only other nation south of the Rio Grande that has any sway on the international stage. As such, while economic relations between the two has sometimes been contentious, Mexico and Brazil are linked in both economic ways, and also philosophical ways vis-a-vis their position in relation to the rest of the world. Whatever Mexico does, Brazil will consider closely. CARICOM’s backing may also portend a full declaration of support from Mexico itself — a nation that has had a tense relationship with the U.S. and NAFTA after the fall of the PRI dictatorship.1 Mexico weighing in as an independent entity would be even more significant an event than Brazil because of the increasingly close economic ties that connect them with the U.S.

While the potential for Mexico to enter the ring is certainly exciting, Brazil remains the most interesting rogue element. For the past year, Brazil has been vociferously arguing that the WTO doesn’t have sharp enough teeth. By that, they believe that the financial and economic tools (including sanctions and tariff limits) that the WTO enforces between nations need to be far more significant than they currently are. They are also one of the most vocal countries when it comes to stressing that the WTO needs to show more teeth to affirm that it isn’t some limp noodle of a regulatory body, and to perhaps prevent a complete collapse of the organization.

The most salient situation fueling the cynical perspective with which Brazil now finds itself in conflict is the failure of the Doha Talks. The WTO is defined by various “talks,”in which policy decisions are made. The Doha Round of talks were meant to be a significant upgrade to the previous Uruguay Talks, which were started in 1986 and laid the groundwork for what would become the WTO. These failures evinced weakness that the U.S. is likely consciously exploiting in its dealings with Antigua, relying on the belief that major nations won’t stand with the rest of the group. Brazil is thus highly motivated to escalate this situation in order to make a point about the WTO having strength enough to remain coherent, and even force the mighty United States to play nice.

Azevedo at the United Nations Conference on Trade and
Moreover, Brazil’s dedication to taking on the U.S. could prove highly beneficial for their nominee for the Director-General of the WTO, Roberto Azevedo, and they aren’t ignorant of this advantage. Brazil has been specifically portarying itself and Azevedo as crusaders against Western (read: American) intransigence in its quest to garner support from other countries.

Adding fuel to Brazil’s fire is how little love is lost between the U.S.and pretty much everything to its south. I mentioned the failed Doha Talks, which were supposed to usher in a new era of streamlined free-trade between nations. Guess which nation was the cause of the failure? I’ll give you a hint: a lot of brave, free people live there.

As one would imagine, this has turned the WTO into a bubbling pot of tension. Brazil has already stood toe-to-toe with the U.S. in a smaller case involving orange juice. If they can do that again on a larger scale, CARICOM won’t be the only ones standing in unity behind them. Indeed, all of Latin America seems ready to support a single candidate for the WTO leadership — an unprecedented show of cooperation, and an utter condemnation of the bullying these nations are facing at the hands of the U.S.

Granted, this bullying is something that the U.S. has done for decades. And indeed, it is not only the U.S. that is making trouble for the WTO. (The Doha Talks failed after India, China, and the U.S. clashed, but most agree that it was the States’ fault for putting protectionist economic policies over actual benefits for poor countries.) What is perhaps causing the sudden rise in tension and activity on the part of other nations is that it was the United States, under Ronald Reagan and his buddy Margaret Thatcher, who pushed hard for international free trade agreements. For many countries, these policies had highly negative consequences. Agreements like the WTO were the direct cause of catastrophic collapses of native industries in many small countries who were, indeed, too small to really compete — something with which the gigantic U.S. was little concerned.

The one place where they could compete, though, was in the rising tide of technological industries. Many small countries saw huge boosts compliments of the loss of borders and the cheap cost of entry. Again, the U.S. initially wrote trade laws to benefit the U.S. So when these trade laws were being used to the detriment of the U.S., they had a habit of ignoring them, or being outright aggressive. The West pushed for treaties that harmed small countries, and then when the harm may come back around, they reject the treaties. The hypocrisy is just too much to bear, and it is coloring negotiations in the Doha Talks.

This disconnect is perhaps unsurprising. It is the reason why there are many in the world who honestly feel that the entire planet should get to vote for the American President — because U.S. actions affect absolutely everyone to a great degree.3 And while the U.S. isn’t exactly a coruscating example of measured, selfless thought, there are those in government who don’t seem to have drank the Manifest Destiny Kool-Aid. Barney Frank, the same Barney Frank who was the loudest voice against the UIGEA, argued that “capitalism works better from every perspective when the economic decision makers are forced to share power with those who will be affected by those decisions.”

That is precisely the situation in which we do not find ourselves. Instead, the policy makers are utterly disconnected from the effects of their policies. They are rich, powerful, priviledged — truly the masters of the universe. And in even small cases, such as the Antigua/WTO case, when those who are affected rise up and threaten to visit these effects upon the lords above, those in power balk and fight back. In the American system, power is for the elite. Everyone else must simply get in line.

Kim Dotcom leaving a courthouse after fighting the illegal
raid on his house.
For an excellent, non-gambling example of this (and amazingly an example that has yet to be mentioned by Noam Chomsky), let’s look at the Megaupload case.

Megaupload was a massive file-storage service started in two other small nations: New Zealand and Hong Kong (I count Hong Kong as a separate entity from China). Like Antigua, it rode the wave of technological expansion brought about by the Internet and broadband connections. The service was being used by many for copyright infringement, but the site itself was merely a tool for storing things online. It was also a popular tool, with tens of millions of paying users. Obviously the U.S. didn’t like this, so they seized the domain, shut down the site, and worked with New Zealand authorities to arrest its founder, Kim Dotcom, on what are becoming increasingly apparent as trumped-up charges.

The case again represents the imbalance between small nations and large (and the grotesque power that special interests hold over American foreign policy), with the U.S. applying extreme pressure on New Zealand to acquiesce even in contradiction of its own laws. People there, including judges, are beginning to get angry. They are beginning to see the U.S. explicitly as the enemy. They are beginning to realize that just because corruption happens under the auspices of some official agreement, it is still corruption. This is a catastrophe. When countries follow our lead only because they are afraid of retribution, we become a parasite. It fundamentally undermines our position in the world and our ability to peacefully engage in just about anything.

How many Antigua-like cases will be necessary before the U.S. stops behaving like a spoiled child? How many losses at the WTO? How many countries must publicly declare their disgust with U.S. actions? I focus on the UIGEA because this is a gambling website, but it is only one element of a grand infection in U.S. government. It started under Reagan, and ever since, regardless of whether the president was Democrat or Republican, it has only gotten worse.

Nations are rightfully becoming frustrated. Indeed, U.S. obstinateness seems to be exacerbating these frustrations to the breaking point. Nations will seek out whatever tools they can to strike back at what they rightfully see as Goliath to their David. The small nations like Antigua succeeded in the post-Reagan era of globalization by utilizing specific tools. The U.S. then said, “No. You cannot use these tools because we don’t like them.” These small nations then looked for tools to fight this fight, and the U.S. responded with “No. You cannot use these tools because we refuse to recognize them.

No matter the rhetoric behind which U.S. representatives try to hide, these events indicate a country that is utterly in the wrong. Moreover, the events represent the tightening noose around the neck of not only the UIGEA, but the selfish behavior of the U.S. Even if the U.S. successfully placates Antigua (quite possible), the illegality of the UIGEA remains, as does the ever-increasing anger and resentment in the hearts of other nations. My greatest concern is that the U.S. has no desire to actually bring the UIGEA case to resolution. Instead they are only interested in stalling Antigua as they execute a longer-term plan. To wit, they successfully negotiate the WTO into a form that negates Antigua’s position entirely, and thus the position of any future countries that would dare to use the WTO against the U.S. There isn’t even the faintest semblance of justice in such a scenario.

Assuming that that does not happen, the potential for larger-scale applications of the WTO’s laws, and significant economic warfare, is what gives the fight with Antigua greater magnitude. As goes Antigua, so may go dozens of other small countries. It is perhaps for this reason that the U.S. refuses to bend, and would instead willingly damage its reputation as it clod-footedly stomps all over another country — if they show weakness, it will be exploited.

Regardless of the reason, the status quo is a mess and the U.S. is only making it worse. Antigua is raising the support of all the “also ran” countries who have spent the past fifty years being abused. This is set against the backdrop of a weakened and disintegrating WTO,2 where Brazil, a possible ally of Antigua, is taking up the banner of savior. And don’t let the U.S. fool you. They also do not want the WTO to collapse, since it is of almost incalculable benefit to American corporations. Thus the U.S. must, for the time being, speak out both sides of their mouth, defending the WTO in one breath, and trying to argue against it in another. One wonders how far they are willing to go in service of this self-defeating policy.

So where do we stand?  We have NAFTA, the WTO, CARICOM, Brazil, the U.S., territories of the U.S., and little Antigua all at loggerheads in a bizarre web of conflict. Saying that this fight has “sides” belies its complexity. What can be said, though, is that the only people who are satisfied with the current situation are American corporations. Everyone else is getting the short end of at least one stick. There is fundamental tension in this arrangement that cannot persist. It must break. And when it does, it’s going to be intense.

So finally, after an entire post, my title is explained. World War I was started because of a small event (the assassination of Archduke Franz Ferdinand) which took place inside of a complex network of associations and agreements made among nations all jockeying for position in a global hierarchy —precisely the arrangement in which we find ourselves now. The assassination was not the cause, but it was a spark. It was the tension, anger, and conflict that, once released, caused the disintegration of the status quo and the ushering in of a new status.

Obviously, no matter how contentious these proceedings get, they will never reach the level of actual warfare. I don’t think my analogy is off-base, though. World War I was significant because it was the expression of war that no one thought was possible. I feel that there is economic warfare that almost no one thinks is possible just waiting to become manifest. Imagine if China suddenly stopped selling to the U.S., or if the U.S. suddenly stopped buying. It would cause the collapse of the global economy. Everything would crumble.

Yes, the people who say that this could never come to pass are probably correct. But in the seminal historical work The Guns of August, author Barbara Tuchman talks about how that very belief is one of the reasons why WWI was allowed to happen: no one thought that it could. Adding credence to the comparison was another dogma of those involved in the war: free trade made war impossible. The tight economic ties among countries made the financial consequences so great as to negate even the possibility of war. Obviously, they were wrong. But what happens when the economic ties are the war?

Think about it. What do trade agreements do? They create weapons. They may not have bullets or bombs, but in a world that is economically linked on a massive scale, the economic weapons could be just as significant. This was actually the explicit purpose of agreements like the WTO. If the pressure of conflict could be released in economic warfare instead of physical warfare, so the thinking went, then the world would be a better place.

I find this hard to argue with. Someone being poor is better than someone being dead. But the end result is still suffering, and if the combatants are wildly mismatched, like the U.S. vs. almost anyone, then the suffering can be severe. We are already seeing the possible effects of these weapons in nations that produce enough food to feed everyone, but everyone is still starving. Or the strange case of quinoa. As Paola Flores from The Huffington Post reports,
“Experts fear that trend could harm food stocks in this poor nation where one in five children suffers from chronic malnutrition.

And with quinoa now costing three times as much as rice in La Paz markets, it isn’t eaten much by Bolivians. Its consumption averages a little more than a kilogram, (2.2 pounds) per year for each Bolivian.”
This situation was not crafted with the intent of being a weapon, nor was the collateral damage to Bolivia’s poor population done on purpose, but there is suffering here nonetheless. It seems that few people understand how powerful these economic weapons are. Even the simple act of their creation caused damage! The smaller nations seem to have no clue, as evidenced by their joining of trade agreements that did not, would not, and could not ever provide a benefit. I suspect that the larger nations are more aware of the dangers. Indeed, assuming that the U.S. is keenly aware of the situation may further help explain their schizophrenic intransigence. They want to defend against the weapons while also maintaining the possibility of their use in the future.

Again, much like World War I, I imagine that another large country is the focus of this. In Europe in the early 1900s, it was Britain, France, and Germany playing a bizarre game of Risk, using smaller nations as pawns. Now, it is The European Union, the U.S., and China playing economic Risk, likewise using smaller nations as pawns.

Aside from the fact that I see parallels between The Guns of August and our current situation, the most unsettling thing is that the weapons being created do not appear as powerful as they actually are. They may act as a sort of “gateway weapon,” whereby countries deploy them, only to deploy more significant measures in the future. Perhaps all that is needed is some sort of demonstration that the weapons have power. Or perhaps all that is needed is an opportunity to exercise their full potential.

I feel that I should close this bit of semi-paranoid prognostication with the qualification that it is highly unlikely that such an extreme level of economic war would ever occur. What worries me is that “All things are subject to interpretation. Whichever interpretation prevails at a given time is a function of power and not truth.”4 And that power is currently contained within the great ivory towers of nations so disconnected from the rest of the world, that they believe themselves to be beyond consequence, beyond harm, indeed, beyond truth.5

Right now, someone, somewhere, in a position of power believes that, and will enter into a game of brinkmanship believing that such an extreme end could never come about. As Barbara Tuchman wrote, “war is the unfolding of miscalculations.”6 Indeed, we may already be past the point of no return. The collapse of the WTO, and indeed of the global economy, is a fait accompli. And the dawn of a new economic era to replace the one birthed by World War II is inevitable. If true, the variables that will become so apparent to historians are now clouded by noise, activity, and ignorance. Because in the midst of war and crisis nothing is clear or as certain as it appears in hindsight.”6

The nations of World War I didn’t see it coming. Even after it came, they didn’t think it had. Stupidity, arrogance, belligerence, and greed can go a long way toward destroying an empire. And when I look out over the world’s nations, I see only one empire left.

Our Duke Ferdinand may already be dead. All that we await are the sounds of gunfire over the clear, blue waters of the mighty Danube.

1: NAFTA is an amazingly contentious agreement. At the time of its initial negotiation, a majority of people in both Canada and the U.S. were against it.  Mexico was under a dictatorship, the PRI, so the positive public opinion polls were likely propaganda. Now, though, both Canada and Mexico show solid support for NAFTA, while the U.S. is about 50/50. The odd thing is that every country believes that the other two countries made out better under the agreement, which evinces an undercurrent of significant tension. Moreover, for the purposes of this article, NAFTA provides a good analog for analysis of the WTO, since both agreements cover similar ground, and the WTO was even more contentious. This situation is yet another seed of discontent that is priming nations to lash out against the U.S. when given the opportunity — an opportunity like the UIGEA.

2: An interesting point that doesn
’t apply to this article specifically but should none the less be mentioned is that the WTO is causing immense conflict in other industries. The recent horse meat scandal in the United Kingdom has actually cast the WTO again into the ring because trade agreements make it very difficult for nations to regulate their food supply else face severe WTO sanctions.

“The EU has banned the non-therapeutic use of hormones in its food industry, citing many studies that indicate that hormones, particularly implants of pellets containing estradiol, could cause cancer. Following the challenge by the U.S. and Canada, citing the onerous provisions of the SPS Agreement and other WTO rules, the WTO ruled against Europe's ban.

“The WTO panel demanded scientific certainty that hormones cause cancer or other adverse health effects, thus eviscerating the precautionary principle as a basis for food safety regulations. This ruling has frightening implications for the ability of governments to set high standards to protect public health. It means that European consumers and governments are forced to accept imports of beef raised with hormones or be penalized with harsh trade sanctions. Public opinion in Europe is strongly demanding defiance of this WTO ruling. The U.S. and Canada have produced lists of exports important to Europe, including luxury items such as prosciutto, cheeses, and Dijon mustard, among other things, on which they intend to slap 100 percent tariffs if the EU fails to comply. These retaliatory measures will total more than $125m.

— Debbi Barker and Jerry Mander, International Forum on Globalization
Again, these issues within the WTO may be the reason why the U.S. is stalling. They know that it is unstable and are awaiting a point of capitulation that will allow them negotiate more favorable terms. Regardless, the duplicity is almost insane, defending the WTO as necessary in one instance and condemning it in another.

3: Humorously, if the world did vote, we wouldn’t have every election being damn-near 50/50. In the Obama/Romney election, Romney would have garnered less than 9% of the vote. 

4: This quote is popularly attributed to Nietzsche, but is one of those kinda’ sorta quotes that appears to be a combination of things written by him. It is certainly in line with Nietzsche’s thinking, and he oft repeated that there is no truth, only interpretation.

5: I know that I’m harping on this point, but how else to explain the U.S. claiming to win a case that they lost?

6: Also from The Guns of August.

Friday, February 22, 2013

What A Long Strange Trip It's Been

Our journey started back in June, when Lincoln discussed the corruption of online gambling gathering places.  With that corruption now fundamental to their being, Lincoln asked if justice for those wronged by online gambling companies was possible. This segued into a series of posts about those who should be fighting for that justice, the casino police.

The subject spiraled into something of such complexity that I want to lend my hand to try to condense it into something simple, while also providing my own insight... such as it is. I provide raw points under each synopsis. To see the supporting arguments and links, click through to the article. Actually, the articles are loaded with data that you should read regardless. So read them. Like Arnold said about getting to the choppah: “Do it now!”

Is Justice Possible?:

What are the requirements for achieving justice? Can they even be met? At least in the current environment, I have my doubts.

The first hurdle that justice seekers must overcome are those for whom the information would seemingly be most useful: other players. This hurdle is perhaps the most infuriating because it is rooted in nothing other than human stupidity.

No matter the truth of a given situation, other players will attack a person coming in to present possible fraud. Indeed, I imagine that many legitimate complaints that would have revealed fraud were suppressed not because of systemic corruption, but because players were bull-headed, intransigent pricks (see: Nifty29 on Casinomeister for perhaps the most glistening example of this).

The second hurdle is, of course,  the Casino Police themselves. The Police will pummel any player who is reporting possible wrongdoing with insults and skepticism. There are many motivations for this, be they practical or psychological, but for now it is simply the fact that the behavior exists that is important.

The second hurdle that must be cleared is that the data presented as evidence of wrongdoing must be statistically significant. This is brutally hard. Events that seem wildly improbable may in actuality be highly probable over the course of many games. It may seem amazing to you, but it must happen to someone. One-hundred losing blackjack games in a row? It could happen. The data shown must represent an event that has a one-in-a-trillion, or one-in-a-quadrillion chance — an event that would require a million monkeys at a million blackjack tables a million years to reasonably experience.

But all that does is prove that justice should be meted! We are still left to rely on the Police to mete out said justice, and one would grow old waiting for them to step up to the proverbial plate. This behavior is found at Casinomeister, certainly, but is actually found with even greater strength at Sportsbook Review, where the corruption isn’t even hidden. There the corruption of the system is treated as widely accepted knowledge by those in the forums.

While the behavior of the players in many of these circumstances is rather appalling, they are still merely assholes. The failure  occurred with the Casino Police. Either through their own efforts or perhaps via organic growth, the Casino Police are charged with maintaining a semblance of order in an otherwise unregulated, global industry. They have power, and they are currently abusing that power. Perhaps it has become a cliched saying since the success of the Spider-Man movies, but the sentiment is true: with great power comes great responsibility.

Casino Police “On the Pad”? (And the Addendum):

The primary agent in the online casino police system is Casinomeister, which is more or less the online name for its founder, Bryan Bailey. Being, as he is, a focal point for online gamblers, it is almost not surprising that he has become noticeably corrupted. Loci in any industry are inherently valuable to the constituents of that industry, and barring some sort of impartial power like government regulations, they will work to control those loci. As such, Casinomeister has become a tool the casinos use to control the negative publicity that their actions would receive in an honest system.

Casinomeister’s main tool for dealing with casino complaints is the “Pitch-a-Bitch,” or PAB. It’s a cute name for a complaint. This seems straightforward enough, except that the PAB process is obtuse and completely secret. If a player says too much before filing the PAB, their request will be rejected, and they are not allowed to talk about it after the PAB is finished. Everything is secret.

One does not have to look far for analogs to this behavior. The United States' actions in Iraq were completely predicated on "secret" knowledge. We had to trust the government. The appeal for trust is based on the argument that an authority has knowledge that others do not, and that if others had this knowledge, they would all reach the same conclusion.

Of course, actually releasing this secret information after the fact is never part of the bargain. The two times this information has been released (The Pentagon Papers and the Wikileaks incidents), the sheer extent to which the authorities lied is laid bare. Secret knowledge is never a good thing, nor is it ever a righteous justification for action. And while secret knowledge may be at times necessary, whether it is accepted or not must always be done after analysis of the context. Online gambling was not, is not, and never will be the correct context.

This black box of justice and information has unsurprisingly resulted in a number of wild injustices, many of them enacted by Casinomeister against players who have come seeking help. He happily uses his secret knowledge argument as a cudgel to suppress dissent and inconvenient information. Furthermore, even when it is obvious that his bias and corruption has been laid bare, he falls back on making fun of posters who prove him wrong. He knows full well that there are few other places for players to go. They can either accept his terms or not be a part of the game.

The corruption has become pathological. The industry is literally sick.

Casino Police Still “On the Pad”? Part 1:

Casinomeister has many instances of what appears to be corruption, but in only a few cases is this corruption plainly visible. One of the most salient, an incident where a potential injustice at the hands of Casinomeister was averted only because of the persistence of his “flock” of forum members, is doubly notable because it happened way back in 2008. While interesting in its own right, for the purposes of this analysis it serves to show that Casinomeister’s modus operandi has remained consistent for many years, even before the full effects of the UIGEA had wreaked havoc.

It also reveals that, when compared to a more recent case from 2012, while his M-O has not changed, the level of his resolve in protecting his chosen casinos has increased. The case from 2008 resulted in CM (barely) admitting that he was wrong. Whereas the 2012 case resulted in CM throwing a hissy-fit, banning the forum member, and locking the thread, thus shutting down any further discussion. When pressed, he appealed to his secret knowledge, and finally resorted to mocking forum members.

Casinomeister has also evolved insofar as his principles. Bots (programs that play the game for you) do nothing except speed up play or allow for perfect play strategy (in the games that allow it). Still, most casinos list bots as being against their Terms of Service. I won't go into the reasons why, but rest assured that these reasons are scummy.

Bots do not alter the games, and there is nothing about bots that could be considered cheating. Not a single thing. Moreover, even if they were legitimately classifiable as cheating, it is impossible to prove that a player was using a bot beyond a shadow of a doubt, meaning that any implementation of this rule will inevitably result in injustice. Casinomeister himself says this on his philosophy page.

Of course, when trying to defend his chosen casinos in the forums, he refers to anyone who uses a bot as a fraudster. Casinomeister is not consistent with logic or himself.

Casino Police "On the Pad"? Part 2:

This post adumbrates the gymnastics that Casinomeister goes through to 1: protect the casinos that are paying him protection money by suppressing criticism; and 2: do so without seeming like the Soviet News Agency.

On the former, he fails partially, and on the latter, he fails completely. I admit, this may seem as though it is becoming a multi-post Casinomeister bash-fest, and that is somewhat true. The overarching lesson to be taken away, though (and a subject which will be further addressed in later articles), is the existence of a corrupt industry in which Casinomeister is only a single player is the grander point that must be taken away. But for the time being, we will focus heavily on Casinomeister.

Analyzed in this post is the now infamous "Jaguar" incident. Basically, Betfred (a casino whose unethical practices just keep popping up) offered a Jaguar (the car, not the cat) in an ongoing blackjack competition. So a player went crazy playing blackjack. After winning, Betfred used excuse after excuse to avoid handing over the Jag, finally relying on the "he used a bot" argument.

But it's not that simple! Oh no! It's never that simple when lies stack upon lies.

First, Betfred, behind closed doors, turned over logs to Casinomeister "proving" that a bot was used. Casinomeister analyzed these logs and came to the same conclusion. Unfortunately, neither Casinomeister nor his employee MaxD are terribly informed regarding statistics, mathematics, and programming. And by that, I mean that they don't seem to know jack squat.

Eventually, Casinomeister responded as I think most seasoned vets assumed he would — he threatened to close the thread. On this day, there were nearly thirty posts to the thread. Easily the most popular post on Casinomeister in months, and he was threatening to shut it down.

Casino Police "On the Pad"? Part 3:

As was mentioned in Part 2, the level of attention and interest in this event was reaching a fever pitch. People were demanding answers and were demanding that the process be opened up for public view. But since Casinomeister relies on private knowledge for things to work the way he likes, this of course wasn't an option.

Thus, in one of the largest clusterfucks to ever appear on Casinomeister — and that is saying something — Bryan Bailey hands off his data to Eliot Jacobson of Certified Fair Gambling to “prove” that a player was using a bot, and was thus righteously denied his winnings.

Mr. Jacobson was provided game logs for a slot called Ocean Princess. He was not given game logs for the game (Pontoon) that was actually used to win the Jaguar, nor was he even given game logs that were within the same time frame as the Jaguar promotion. He was given game logs for a different game from over a month previous.

His analysis contained many details, some of which prove that Casinomeister and MaxD cannot read even basic log files, but what is important is his final conclusion: the player used a bot for these periods of game play.

Long story short, I am willing to accept that for the game analyzed, the player was likely using a bot. This cannot be proved, but it seems probable. The problem is, and remains, that the game analyzed had nothing to do with the winnings that were denied. Let me reiterate that: the casino denied a man his winnings because he may have used a bot on a different game in the past.

It almost goes without saying that Casinomeister’s and Betfred's behavior has hitherto been abysmal. They were abusive, confrontational, arrogant, and flat-out wrong on more than one occasion.

After Jacboson’s analysis was posted, Casinomeister then pulled what amounts to a bait-&-switch. After relying on the reputation of Jacobson, he then stretches the conclusion to say that "the same behaviors appeared in [the] black jack play."

Same behaviors? What the hell does that mean? How can the same behaviors of a slot be seen in a card game? What were the specific numbers? Why were slot games and not the blackjack games provided to Jacobson if they indeed displayed the same "behavior"? What secrets are behind the door?

None of these answers were ever provided. Not one.

Jacobson reenters the conversation at this point to defend his analysis. While I remain dedicated to my statement that Eliot Jacobson is one of the few trustworthy guys in the industry, he is quite off base in his conclusions (so much so that I wonder what he was being told behind the scenes).

The thread has now kicked into high gear, garnering fifty posts per day — perhaps the most popular thread in years. Users keep asking the same questions — the same questions that are destined to never be answered.

Casinomeister was caught. His corruption was on display for all to see. His arrogance, belligerence, manipulation, outright ignorance, and lack of transparency presented his character in a stark, unflattering light — as if any light could be flattering. So he did the only thing in his power.

He shut down the thread.

There are a number of conclusions to be drawn from this analysis. Perhaps most pertinently: Casinomeister is utterly corrupt, as I have mentioned on numerous occasions. But importantly, CM is a mere fraction of the total problem. His behavior provides us a symptom, but the underlying illness does not lie with him alone.

The reason I say that this incident revealed the corruption of the overall system was because of the back-room collaboration between Betfred and Casinomeister. It wasn't merely CM screwing the player, or Betfred; it was both of them working together to pass bad information and suppress dissent.

While Betfred has most certainly been unethical, have they been corrupt? And by corrupt, I mean are they knowingly and intentionally misleading players and lying about the odds of their games? At least vis-a-vis these events, we cannot draw that conclusion. As I think I've made apparent, though, we can draw that conclusion about Casinomeister. Boy howdy, can we draw it.

(BIG Note: These analyses were written before the latest Betfred blowup involving rigged games. Before this, Betfred received the benefit of the doubt. Now, we can be almost completely sure that Betfred is knowingly and willfully corrupt.)

Standing juxtaposed to this... mess, is Gambling Grumbles. Grumbles is another casino complaint website and, as far as I know, is not corrupt. They are not part of the system, like Casinomeister is. How do I know that Gambling Grumbles is independent while Casinomeister is not?

In a case that was eerily similar to the case at CM, Gambling Grumbles addressed a complaint that involved Betfred, Playtech, Blackjack, and an alleged bot. How convenient of them to provide us with a direct comparison.

In this case, since Grumbles is not on Betfred’s payrole, Betfred delayed and offered up excuse after excuse to explain why they wouldn’t turn over the play logs. After some back and forth and endless song and dance, it became apparent that Betfred was simply unwilling to play ball. Grumbles went so far as to say, in less crude terminology, that Betfred was full of shit in their accusation of bot usage.

What we are seeing here is the little, nobody website that Casinomeister was in the nascent, salad days of the online casino industry. Grumbles is the new guard, Casinomeister is the old, destined to switch places.

To describe corruption as rot is, I think, accurate. It slowly but surely disintegrates the foundation on which any organization must exist. Sometimes, this can take a long time to manifest (Lord, just look at the American automotive industry!), but in the end, they all crumble.

We can see the inevitable results of this rot in Alexa's traffic charts. Casinomeister is slowly falling (the chart only goes back two years, if we could see back longer, the trend would be the same). And while we must recognize that Alexa isn't the most accurate method for determining the popularity of a website, it can be useful for broad trends. And this broad trend isn't encouraging.

Likewise for the chart for Sportsbook Review, which is so corrupt that it almost appears to be an inside joke among forum members. While SBR is a significantly less popular website, and as such its chart data aren't as robust, the trend is identical: down.

For me, these are the beginnings of something good. Sportsbook Review and Casinomeister are now rotted. The rot took hold because those running the websites became accustomed to the money that flowed in when the American market was open. When that money spigot turned off, they were no longer able to afford the lifestyles to which they had grown accustomed. This situation provided the fertile ground in which the seed of corruption was able to germinate.

If we can start a system that is run by people who are not accustomed to a preexisting and expensive way of life, and are thus more willing to accept smaller amounts of money for their services, we can return to a semblance of justice in the industry. This is genuine hope and should not be ignored by those who enjoy online gaming.

Indeed, what online gamblers should be doing is actively engaging with these other services. In a corrupt industry, we have few ways of fighting for right. But the nature of the Internet makes moving to another company or another service so easy that standing up for ourselves becomes almost effortless. All we need to do is become informed and then perform these (easy) actions based on that information.

We need to encourage other online gambling websites, be they The POGG, Gambling Grumbles, Beating Bonuses, or the Wizard of Vegas. They are small and insignificant, but all it takes from us is our participation, nothing more.

If only everything were so easy.

Sunday, February 17, 2013

A Wart's Opinion - A Global Marketplace?

The last time there was a "Sin Prohibition" in the US - liquor, from 1920 to 1933 - it led to, among other things, that wonderful event known as the Saint Valentines Day Massacre.

Wiki has this to say under the title Prohibition in the United States:
The lack of a solid popular consensus for the ban resulted in the growth of vast criminal organizations, including the modern American Mafia, and various other criminal cliques. Widespread disregard of the law also generated rampant corruption among politicians and within police forces.
You would have thought that the "brain trust" that the US refers to as "our elected representatives" would have learned from history.  You would have thought.

The US has been living under the newest "Sin Prohibition" - internet gambling - for about 6 years.

The reason for this prohibition is NOT the "gambling" part of that "internet gambling" phrase.  After all, the US has Las Vegas, Atlantic City, and a wide number of Native American reservation casinos.  It has state-sanctioned slot parlors.  It has in-state lotteries and multi-state lotteries.  It has "Scratch and Win tickets" and "Parimutuel tickets".  Clearly, gambling in the US is not any problem at all - it's everywhere.

The reason for this prohibition is the "internet" part of "internet gambling", because internet equals offshore.  The US has no "onshore internet gambling system" in place.  And all of the businesses that run (and profit from) all of those other forms of gambling do not want the US customer's gambling budget to leave the country (or the state, or the reservation).

So ... the US Government simply closes and locks the "offshore cashier window" with the UIGEA, ignores things for a little while, and then goes about the business of screwing anyone in the industry that the DOJ, or ICANN, can get their hands on.  (One of the results, as I mentioned in an earlier post, is the growth of the "Black Market Bathtub Gin" version of the "offshore internet gambling" business.  And what a wonderful business that proves to be - so honest and "customer friendly".)

The irony is that the reason the US has no "onshore internet gambling system" in place is because of those businesses that run all of those other forms of gambling.  Las Vegas does not want their customer's bets going to Montana.  The Florida lottery does not want their customer's bets going to Ohio.  And some states, or counties, do not want their customers to bet at all.

OK, we know all of this.  The bottom line of this part of the narrative - The US Government has actively blocked US customers from spending their money in offshore businesses, to the advantage of the US corporations and the disadvantage of the US customers.

Once upon a time (1900 and earlier) the US was primarily an "agrarian economy".  The Great Depression arrived, accompanied by the Dust Bowl, and the US became a "nothing economy".

World War II arrived and we became a "manufacturing economy".  In the 1970s and 1980s Japan kicked the snot out of our largest manufacturing industries.  What did manufacturing Management do in response (after wiping off the snot)?

Well, first of all, they diddled and twiddled.  They asked for "short-term protection" support from the Government.  They moved pieces around by "shaking the box" - a lot of activity but with no results.

Ultimately, they embraced "automation".  This results in making high-wage, high-value-added jobs being done by fewer and fewer people.  (The US people get screwed.)

And then they embraced "offshoring".  This results in lower wage, lower-value-added jobs being sent to third world countries for cheaper labor.  (The US people get screwed.)

The US Government has no problem with US manufacturing companies spending their money in offshore businesses, to the advantage of the US corporations and the disadvantage of the US customers.

Once again we change, this time from a "manufacturing economy" to a "service economy".  I won't go on at length about this one.  Just call our Help Line and ask them in which part of India they live.  Or call our Software Department and ask them in which part of Pakistan they live.

The US Government has no problem with US service companies spending their money in offshore businesses, to the advantage of the US corporations and the disadvantage of the US customers.

OK, we know all of this too.  The bottom line of this part of the narrative - The only part of the US economy that is actively blocked by the US Government from making use of "offshoring" is the US customer, because of the advantages for the US corporations and in spite of the disadvantages for the US customers.

Side Note **********

#1 - The US Government made drug importation illegal in 1987.

#2 - For reasons, Canadian drug prices are as much as 80 percent below those in the United States.

#3 - In early 2003 a man named Carl Moore started a business named Rx Depot.  Customers arrive with their prescriptions and fill out a medical questionnaire, both of which are faxed to a Canadian pharmacy.  There, the pharmacist consults with a physician, who approves the prescription.  The drugs are then mailed directly to the customer.

Online Quote:
Soon after Rx Depot opened its first storefront in the parking lot of Tulsa's Fontana Shopping Center--right by the Acura dealership and Monterrey's Mexican restaurant--a frail-looking woman walked in and asked the elder Moore for a price check on tamoxifen, a drug for treating breast cancer.  When he told her it would cost $45, "she started crying," he recalls.  The woman explained that she had stopped taking the drug a year earlier because she couldn't afford the $390 her local pharmacy charged for the same prescription.  "She told me she felt she had a new lease on life," Moore says of the moment when he realized his new venture was more than just a potential moneymaker.  "It changed my life, too.  I started wondering how many more people were out there who couldn't afford the drugs they needed to live."
In late 2003, the US FDA and the DOJ started the legal proceedings to shut down the Rx Depot.

It's worth repeating - The only part of the US economy that is actively blocked by the US Government from taking advantage of "offshoring" is the US customer, to the advantage of the US corporations and, in this case, to the severe disadvantage of this woman with breast cancer.

End Side Note **********

The UIGEA becomes law.  The US online gambling universe has become dark.  Time passes ---

--- (I'm thinking strains of Enya here, or maybe Eno's Ambient) ---

--- during which some stray neurons begin to bump into each other.  Other neurons join.  After awhile they coalesce and begin to resemble a thought - "profit".  Another thought forms, in a similar fashion but from a different part of the universe - "taxes".  (Those 2 thoughts pretty much consume the firing neurons available in the US that have an awareness of, or interest in, this industry.)

At some point thoughts lead to action.  With "Profit People" and "Taxes People" pulling the cart, and a carrot
Money Money MONEY Money Money
dangling from the end of the stick in front of them, well, that cart is going to move forward.

Thus begins the technical, operational and political challenge of developing an "onshore online gambling system".  The cart moves at the speed of a ping pong ball rolling down a slight incline that has been covered with molasses, but it does move.  (That's the word I was looking for - "glacial".)

As I mentioned in my very first post to this blog, "Ripples in the Water", all of that Money, Money, Money has to come from somewhere.  In the US's buy-sell economy, the only people bringing money to the table are known as "Customers".  (Yes, that same group of people to whom their Government has been so helpful previously.)

Prior to the UIGEA the "offshore online casino" customers paid about 3% of their bet to the casino.  In my "Ripples" post I projected that the US Money, Money, Money people would create an "onshore online gambling system" that ultimately winds up costing the customers 10% of their bet.

So, the Government closes and locks the "offshore cashier window", eventually opens up an "onshore online gambling system", and charges the customers 3 times as much for the privilege.  At those prices, there won't be any "outside the country" money coming in.  The "offshore cashier window" will remain closed to the US customers - their only option is that honest and "customer friendly" (and now probably rapidly growing) "Bathtub Gin Black Market".

The only people, group, organization or entity that is getting screwed here ... the US customers.

The BOTTOM LINE of this post:

The only part of the US economy that is actively, legally (and aggressively) blocked by the US Government from taking advantage of "offshoring" is the US customer.

- The US Government (UIGEA) closes down the "offshore online casinos", but provides no "onshore online casino" option.  This alone did not create the "Bathtub Gin Black Market", but there can be little doubt that it fueled it as nothing else could.  (I don't think that I need to provide any conclusion as to the benefits to the US customers that arise when their only option is "Bathtub Gin".)

- The US Government (taxes) and the US Corporations (profits) ultimately begin to pursue that "onshore casino option" (at the glacial pace expected from two huge bureaucracies), but the result, as with the pharmaceutical example, will be the same product as the "offshore online casinos" but at 3 times the price.

- Who wins?  The current Federal and State Governments, who have repeatedly demonstrated over the past 20 years that they are the least "representative" Government since the US Civil War.

- Who else wins?  The US Corporations, who have repeatedly demonstrated that they are not "good citizens" and happily operate without any concern for the US customers.  (Truly, they would "sell their Grandmother for a buck".)

- Who loses?  Well, who is left?  The US customers.

It is as though both the Government and the Corporations view the US customers, the US people, as a herd of cattle.  The cattle have all been rounded up and surrounded by "the Walls of Alcatraz".  The Government and the Corporations circle the walls as vampire bats, feeding on them at their leisure, and defending all access to them from any outside vampire bats.

Monday, February 11, 2013

The End Of The UIGEA?

The next few months are going to be very interesting indeed.

But first, a brief history lesson.


For those not in the know, the United States has been something of a piss-ant these past many years as regards online gambling. Oh sure, they say that the reason for this is to protect American consumers from nefarious online characters, and indeed, there is likely some truth to this. The primary reason, though, has nothing to do with protecting consumers. It has to do with protecting those that American politicians actually serve: the special interests.

By special interests, at least in this specific situation, I am, of course, referring to the landed casino operations. They, in their infinite stupidity, believed that they were in competition with online casinos. Because you know how an online casino and a physical casino are practically the same thing. Just how Need For Speed is a perfectly reasonable replacement for driving a Ferrari.

The ultimate manifestation of this corruption was the UIGEA, or Unlawful Internet Gambling Enforcement Act.1 This act was a last-minute addition (added at 9:29pm the day before the vote by Senator Bill Frist2) to the SAFE Port Act, an act which was the result of our collective freak-out over the possibility that a Dubai company may buy an American port (because you know how all Arabs are babbling, towel-headed terrorists).

Predecessor bills to the UIGEA had been bubbling around in Congress since the 1990's, but none of them had managed to gain much traction (thus explaining why it was finally passed by literally sneaking it into another, highly popular bill... I love America). Initially, the government was relying on the Federal Wire Act to try to stop online gambling, but this could only apply to operations within the country. As such, it was buttressed with the passage of the UIGEA, which is essentially an end-run around the fact that the U.S. cannot regulate things that exist legally in other countries.

What do I mean by end-run around? In short, the UIGEA prevents American financial institutions from transferring money to companies in other countries that identify as online entertainment — read: gambling. It makes illegal something that by all rights should be legal in this country: financial transfers from one legal organization in one country to another legal organization in another country.

The likely reason for the passage of the UIGEA, while its earlier variants had all died, was the loss of the only other judicial tool used to block online betting: The Wire Act. For years, the U.S. had been relying on the Federal Wire Act to prosecute companies and individuals associated with gambling. This was going as swimmingly as anything the government does until 2002 when the courts ruled that the Wire Act only applied to online sports betting, not games of chance. From then until 2011, the Justice Department did what it does best: be intransigent and nonsensical. In the face of overwhelming evidence to the contrary, they kept claiming that The Wire Act did, in fact, apply to all forms of online gambling.

But even the Justice Department must face, ya' know, reality now and then. In December of 2011, they were forced to abandon The Wire Act entirely, leaving all of their judicial eggs in one basket. This reality was evinced in the Full Tilt Poker case, where the Justice Department didn't once mention the Wire Act in the indictment.

I wonder if their Law & Order walk was intended to be prophetic.

The U.S. wasn't just relying on the law, though, oh no! They also relied on the fact that the U.S. can do whatever the fuck it wants and can simply give the finger to anyone who protests. Using the "whaddaya gunna' do aboudit?" argument as justification, the U.S. arrested dozens of people, notably David Carruthers and the aforementioned Full Tilt Poker arrests.

The former happened before the UIGEA and was primarily political in nature (the U.S. was saying "we're so serious about this, we are willing to arrest people without any actual laws in place."). The latter happened after the UIGEA and relied almost exclusively on it for the arrests. Indeed, it appears that Full Tilt was definitely side-stepping the UIGEA, but as a wise man once said, an unjust law is no law at all.

Since then, the UIGEA has been used to justify wild oversteps of governmental power, such as the seizing of domain names that end with ".com." All .coms are registered in the United States, which means that the U.S. can go after them. This was first known as the ICE Seizures and initially began in the Quixotic battle against copyright infringement (which adds further irony considering that copyright considerations come into play with our current mess). This expanded into online gambling. And because this is the U.S., they, of course, could not go about their business without royally fucking things up.

If you are wondering: yes, these are all widely considered to be illegal actions on the part of the U.S. And if not illegal, their actions are just plain stupid. As Gerd Alexander from Duke Law School argued in a 2008 paper,
The United States federal government’s attempts to curb Internet gambling are beginning to resemble a game of whack-a-mole.

U.S. gamblers have demonstrated that they will continue gambling online. Neither the Act nor the DOJ have effectively addressed the dangers of online gambling. On the contrary, the U.S. has forced transparent and regulated publicly-traded companies out of the market, only to be replaced by more opaque and potentially unscrupulous privately-held companies. In so doing, the U.S. has amplified the risks of consumer abuse, underage gambling, problem gambling and money laundering.
Furthermore, the UIGEA flew in the face of what Americans actually felt, with over 85% of those surveyed supporting online gambling. Let that number sink in. The government enacted far-reaching policy for something that only 15% of citizens felt may be a problem. A greater number of people think ghosts exist.

When all of this was pointed out to them, they responded with "whaddaya gunna' do aboudit?"

The totality of these offenses angered more than just companies and customers. It also managed to upset a number of countries. Specifically, countries that had built up a significant business of online gaming and betting.

Enter Antigua. Antigua and the United States grew side-by-side in the online gambling frontier. The U.S. was far ahead of other countries when it came to online gaming, which is odd considering that it was far behind other countries when it came to broadband Internet access. But that's neither here nor there.

As the U.S. market expanded, Antigua was among one of a few countries that was providing the infrastructure to take advantage of this. As such, they saw the online gambling business grow into a multi-billion-dollar source of revenue. Dozens of companies flooded the small country with money, jobs, infrastructure investment, and a position at the forefront of a nascent industry. Times were great for Antigua — times that came to an abrupt end with the passage of the UIGEA.

As I mentioned, the U.S. had been making noise about online gambling for over a decade, and Antigua had likewise been making noise in response to this. It started with their first appeal to the World Trade Organization (WTO) in 2003 attacking the legality of American attempts at blocking online gambling, a ruling in their favor in 2004, 2007, and again in 2009. For awhile, it looked like their threats were empty, with no actual intent of ever leveraging their WTO rulings into some action. Even after Brazil indicated that they would follow in Antigua's footsteps, nothing happened.

Then, late last month, everything exploded.


Antigua, with the full and honest backing of the WTO, has announced plans to open a "piracy" website to distribute software, movies, music, games, and just about anything else covered under copyright in the United States. One thing that should be stressed is that what Antigua would be doing isn't actually piracy. Piracy implies a violation of recognized copyright laws. Antigua has been given permission to not recognize these laws, thus rendering piracy impossible. It's kinda' like James Bond being given a license to kill — it's not actually murder.

We are confident that in the coming days, our strategy will
have the desired effect.
- Antigua Finance and Economy Minister Harold Lovell
The United States has responded as one would expect them to, by losing their shit. Perhaps expecting rational reactions and argumentation is asking too much from the most powerful nation on Earth. After all, they have lost their case in the WTO multiple times, inexplicably claimed that they won, simply ignored the WTO, and continued to "negotiate" with Antigua, all the while trying to use the WTO to demand actions from other countries in other cases.

This is truly a perfect exemplar of the U.S. opinion on law: an unjust law is no law at all, and any law that is inconvenient for the U.S. is by definition unjust. Heads I win, tails you lose, and Antigua is now at war with that hubris. Considering the U.S.'s history with international law, it perhaps comes as no surprise that the laws that Antigua is using against the U.S. were created by the U.S. as tools for hegemonic control of international trade. It is impossible for the U.S. to violate laws.

In an interview for a recent book, noted deep thinker Noam Chomsky recounts statements made by liberal analyst and blogger Matthew Yglesias, who was criticizing those who attacked the U.S. for killing Osama Bin Laden without a trial. His criticisms were not of the Fox News, patriotic variety, though. He was attacking the idealistic naivete of those who relied on concepts of American law and justice to make their calls for a trial.
[Yglesias said] 'One of the main functions of the international institutional order is precisely to legitimate the use of deadly military force by western powers.' Of course, he didn’t mean Norway. He meant the United States. So the principle on which the international system is based is that the United States is entitled to use force at will. To talk about the United States violating international law or something like that is amazingly naive, completely silly.”
The United States is acting pissy because another country dared to use the laws written by and for the benefit of the United States against the United States. The impudence! And because the game isn't played like that, the U.S. has been acting like a child. A giant, powerful child that exists above the law. Indeed, this case has put out in stark display the alarmingly schizophrenic personality of the American government — we live for ideals, but the ideals are whatever we say they are, and even then they may not be. If that doesn't make sense, good. It shouldn't.


If we disregard all of the details and minutiae of international relations, what we are left with are two arguably unjust systems — the WTO and the UIGEA — both created by special interests groups, at loggerheads. So at its most fundamental level, this isn't a case of country vs. country, but a case of industry vs. industry.

As I write this, two lobbying groups in Washington— copyright and gambling — are clashing with each other over conflicting interests, and are using the U.S. government as a pawn in the furthering of these interests. As one would expect from the economic desires of a single industry, this behavior is actively harmful to almost everyone else and practically begging to instigate broader conflict.

And instigate broader conflict it has!

The WTO's issues are well-known, and certainly more far-reaching, but the UIGEA gives up nothing as regards pure drama. Combined with near-constant resistence to it from other countries, from those in the government not in the pocket of the gambling industry, from the people of the United States, and the fucking gambling industry itself, I can't help but think that the UIGEA's days may be numbered.

So how will this all play out? Let us analyze the possibilities.

1: The U.S. drops its conflict with Antigua.

This is guaranteed to not happen. The panicked copyright lobby in the U.S. is very strong. They are also quite stupid. This means that they, regardless of their battle being pointless or not, are going to fight it tooth and nail. They are going to press the congresspeople that they own very hard. They will not let up.

2:The U.S. bribes Antigua.

This seems likely. The U.S. has already shown a willingness to do this, much to the chagrin of many. Whether Antigua accepts the bribes or not is more in question.  The articles I've found all seem to indicate that the USA's offers currently suck, as exemplified by this interview with Mark Mendel, one of Antigua's lawyers.
"Antigua negotiates with the United States for years and years and years, the United States doesn't really want to negotiate, they definitely don't want to comply, and they haven't complied. Antigua, after 10 years of negotiating, loses its industry and said, "What in the world can we do?"
This behavior is not surprising since the U.S. subscribes to the legal school of "whaddaya gunna' do aboudit?" Moreover, when representatives from the U.S. try to argue that it is Antigua being intransigent, we can pretty confidently cough the word "bullshit" right in their faces.

But let's assume that the U.S. is suddenly willing to play ball. What kind of bribe would do, and from whence would it come? Antigua estimates that they are losing more than $3 billion per year because of the lack of gambling. If that's true, then Antigua would rightfully demand reparations on the order of $3 billion. The U.S. is never going to just provide billions of dollars, so it would be up to the aggrieved industry to pay, and I seriously doubt that the gambling industry would be willing or able to cough up an annual $3 billion bribe to an entire country.

Perhaps the necessary number would actually be lower. I think that Antigua's estimate is exaggerated. They're probably using that number as leverage in any negotiations. Based on my own research, if I'm being generous, I would peg their share of gambling revenue at around half to two-thirds of that. But even at $1.5-2 billion, that's a massive number. Current projections have the global gambling industry growing by 25% over the next 24 months, so Antigua's share would exceed $2 billion in more realistic numbers, and over $4 billion in their optimistic numbers.

Considering that as broadband Internet access continues to grow across the United States, the size of the market would also grow. Because let's face it, no one is playing NetEnt games on dial-up. Based on the growth of online casino use, Antigua would be able to expect 10% annual growth for at least the next few years. Looking at the landed American casino companies, whose industry has stagnated for years, I seriously doubt they are in a position to make any bribes of such magnitude.3

All of this means that the likelihood of the U.S. making a successful offer is low. They may be able to offer other things from other industries, though — cruise ships, manufacturing, etc. — but that would have to be a massively robust package, which is again something that I don't think the U.S. is willing to do.

3: The UIGEA gets repealed.

This seems equally likely as #2. As I mentioned, this has become a clash between two lobby groups: the copyright lobby and the gambling lobby. If we combine both the Indian lobby and the landed gambling lobby (which I believe includes lottery companies), they spend about $47mil. The entertainment, software, publishing, and broadcast industries spend over $350mil. Basically, the casino lobby can't possibly go toe-to-toe with the copyright lobby, and if this situation comes down to choosing one industry to support, the entertainers and programmers will bribe the UIGEA out of existence.

[We need to] enable Americans to bet on-line and put an end
to an inappropriate interference with their personal freedom."
- Barney Frank
Obviously, option #3 is the best option, and the very real possibility of it is exciting. There has been constant resistance to the UIGEA from the very beginning, most vocally from Barney Frank. But obviously, ideals and common sense have no purchase in the harsh, intellectual wasteland that is Washington DC. Other lobbyists, though? Yeah. They can get shit done.

There is a greater than low chance that the UIGEA will be gone before the year is out.

The unavoidable corollary to the repeal is that regulation of some form may come along for the ride. This could come in the form of taxes for casinos based within U.S. borders, which would be a boon for government coffers. But I also hope that it would trigger the founding of some sort of disinterested regulatory service like Casinomeister, but without the problematic corruption.

Nominally, we have those now. We have the UKGC, the GRA, the AGCC, and the KGC. But all of them have proven to be, at best, ineffectual, and at worst, outright corrupt. The plain truth of the matter is that online gambling is completely and utterly unregulated. This could be significantly alleviated with a large, watchdog-like website run by the government. Its effectiveness would of course be maximized if it was not used as an excuse to squeeze tax revenue, but that would require the government to be concerned with actually solving problems, which is something to which they seem strangely averse.


As I have said many times, I enjoy playing games online. I don't play much, but I do play enough where it is a pastime to which I look forward. The UIGEA made this pastime harder, more dangerous, and more annoying. But my personal feelings on the issue are like spitting in the rain — a small part of a cacophony of complaints and criticisms. It is the undeniable reality of the current situation that should, nay must, sway opinion.

The UIGEA has failed. Anyone with half a brain knew that it would fail even before it was passed. Now that it has been around for five years, we can say without doubt that it has failed. It has caused significant harm both to companies and to the United States' reputation among trading partners in the WTO. It is a disaster. There is no other word for it.

While the motivation for its death — lobbyist vs. lobbyist — is less than ideal, and indeed instills in me a depressing sense of futile cynicism about government, it is at least getting the job done. It is at least triggering change.

That is a good thing.


1: Don't let the name fool you. What it is regulating isn't unlawful. The language of the title makes it seem as though it is giving greater power to regulate something that was already illegal, but the bill is actually making something illegal. Online gambling is and always has been legal in the countries where the casinos operate. This is the U.S. trying to play around with language to legitimize a judicial and policy overreach.

2: Bill Frist, who has never done anything bad ever.

3: I looked at the stock data from the #1 and #2 gaming companies in the world, Caeser's and MGM. Ignoring recent speculative spikes compliments of New Jersey governor Chris Christie's support of a trial period for online gambling in New Jersey, the stocks saw massive plunges at the beginning of the recession and have been flat ever since. To describe the performance of gaming companies as "the doldrums" is a wild understatement.