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Poker News | Gambling and the Law

WTO Countries go after US because of UIGEA

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Costa Rica announced recently that it would join the European Union, Barbuda and Antigua, India and Australia in seeking compensation from the United States' removal of online gambling and online poker from its trade obligations under the World Trade Organization. The WTO has repeatedly ruled against the US, finding it in violation of its agreements with the WTO with regard to its stance on online gaming. Japan has expressed interest in the matter, but has yet to ask for compensation. Barbuda and Antigua are seeking over $3 million in compensation, but Costa Rica has not as yet revealed the amount they are seeking.

After the most recent ruling against the US, the United States Trade Representative's office announced that it would change its trade commitments to the other 150 members of the WTO. Under the 1994 Global Agreement on Trade in Services (GATS), if a country withdraws its commitments other nations can seek compensation for any services trade opportunities that they could prove they lost through the change.

Costa Rica will join other nations in seeking compensation for lost revenue as a result of the UIGEA and the crackdown in online gambling. Costa Rica houses more online gambling companies than any other country in the world, and its economy has been adversely affected by the UIGEA and recent arrests of proprietors of online gaming and sports betting sites.

Over 1,000 employees of BetOnSports lost their jobs when the company was forced to shut down after the UIGEA was signed into law by President Bush. Bodog, BetUS and other Costa Rican-based firms have also experienced layoffs. The effects of this US anti-gambling movement have been felt by other industries as well, as sectors of the Costa Rican banking, telecommunications, hotel and entertainment industries have seen a decrease in revenue as a result of the crackdown.

Costa Rican Minister of Commerce Marco Vinicio Ruiz confirmed that Costa Rica would be seeking monetary compensation from the US for the lost revenues. It remains to be seen if the US government will honor the contracts signed with the rest of the world, or disregard them when it doesn't suit their mood to comply, as they have done to date with regards to the UIGEA and online gaming.

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