Could United States Dispute Lead to Online Sports Gambling?

Published on: February 05, 2013 | Written by: Clay Travis

It hasn't gotten much attention, but the tiny island nation of Antigua and Barbuda scored a major victory over the United States last week. Over a decade ago Antigua and Barbuda emerged as an offshore gambling haven for American sports gamblers who wanted to bet on games but who didn't live in Nevada. The island nation leapt at the chance to pursue the online commerce, and the industry surged, bringing in billions of dollars in revenue to the tiny island nation. But then the United States government cracked down on these offshore sites, forbidding US residents from utilizing them and Antigua and Barbuda, facing collapsing revenues and thousands of lost jobs, filed a complaint with the WTO, alleging that the United States was guilty of unfair trade practices.

You can read the entire history of the decade-long dispute here.

Last week something wild happened -- the WTO granted Antigua and Barbuda authorization to retaliate against the United States for violating WTO agreements.

In what way?

The WTO suspended United States copyright protections in the islands.

Holy...

Yes, the WTO, the world's governing trade body, has ruled that American copyrights do not apply in Antigua and Barbuda.

Now, Antigua and Barbuda is limited to $21 million a year in profits that it can gain from selling United States copyrights, but that's still an extraordinary amount of power. Why? Because Antigua and Barbuda can set the prices for the copyrighted works it sells. You want to legally stream every HBO series ever created for less than a dollar? Have at it. You want to watch the newest Batman movie on your computer screen for ten cents? Knock it out.

This is an amazing story which still isn't getting that much attention.

Large American copyright holders have to be nervous as hell over this ruling. Thanks to Antigua and Barbuda setting the price for the content it could cost them United States companies billions in lost profits. All because of the United States completely misguided policy on online sports wagering. You'd think that our government would understand that prohibiting something that is incredibly popular is an absolute waste of time. 

You'd think that, but you'd be wrong.

Anyone with half a brain can see that instead of spending money trying to stop online sports gambling, we should be regulating and taxing the activity. Especially since sports wagering actually involves a degree of skill. That is, the best gamblers make money betting on games. Whereas there is zero skill in every form of state lotttery, it's complete and total chance, there is no skill in scratching off a ticket.

Meanwhile, Antigua and Barbuda and much of th rest of the world remains confused as to why our government is so aggressive about prohibiting online sports gambling, when it seems to welcome every other form of gambling, both on and offline. (Recently the Department of Justice has ruled that state lotteries could host online games so long as those lotteries only occurred online within the state. So you're not far away from being able to buy a lottery ticket online and scratch it off electronically).

Indeed, gambling is already a massive industry in our country. Every year Americans buy over $60 billion in lottery tickets in the 43 states that legalize lotteries. (By comparison's sake, we buy just $12 billion in movie tickets). Toss in casino gambling as well and in 2010 Americans spent more money on gambling, over $92 billion, than we did on all concerts, spectator sports, movies, plays, and all forms of recorded music combined.

These stats come from a great 2010 article, "The Third Wave of Legal Gambling."

Yet we continue to prohibit online sports gambling.

Why?

At a time when states and governments are all strapped for cash, do we really need to spend more of our tax dollars arresting and prosecuting people for permitting online sports wagering? Do we really need to spend more of our tax dollars attempting to defend a policy that so violates international treaties that the WTO allowed a small island nation to suspend our copyrights over our flagrant violation of international agreements?

Right now we can thank a 1992 law sponsored by New Jersey senator Bill Bradley for stripping away our legal right to bet on sports. Why did the law pass? Because Bradley persuaded congressmen that allowing extensive sports wagering increased the odds that players would fix games. Of course, the truth is legalizing sports wagering actually makes fixing games less likely. Taking sports wagering out of the underground and placing it front and center actually leads to irregular betting patterns being noticed immediately. Companies involved in sports wagering also have even more incentive than the leagues to ensure that there is no game fixing going on since game fixing costs them money.

But congressmen are often stupid, and they bought Bradley's weak sales pitch and an entire generation later you can still only legally wager on individual games in the state of Nevada.

Which is beyond insane and potentially unconstitutional. This is the argument that the state of New Jersey is pushing now, that federal prohibitions of sports wagering outside of Nevada is unconstitutional. After all, how can the federal government be in the business of picking winners and codifying monopolies -- hello state of Nevada -- while restricting other states and individuals from participating in sports wagering? Talk about a boondoggle for a special interest, how many other industries outside of sports gaming in America have the right to engage in something that the federal government will put a competitor in jail for doing?

Think about this for a minute, are there any?

Las Vegas has a codified exemption to a federal law that ensures they have the exclusive right for single game sports wagering in the country. As if that wasn't enough of a competitive advantage, if someone else attempts to compete with them, they go to jail.

Jail!

I don't care where your political persuasions lie, Democrat, Republican, or non-voter, doesn't that strike you as downright astounding? And flagrantly unconstitutional?

It does me.

Especially when NFL teams, who oppose sports gaming so stridently, are allowing their logoes to be used on scratch off lottery tickets.

Yep, the NFL, which so vigorously opposes sports wagering, is completely fine with being paid for scratch off tickets. The hypocrisy is mind-boggling.

So could the tiny island nation of Antigua and Barbuda raise the political pressure on the United States to come up with a logical online sports wagering policy?

As a sports fan who believes in free markets, I really, really hope so.

As an American who has seen how stupid our politicians are when it comes to making intelligent decisions, I have my doubts.