Happy Holidays to everyone stopping by to read my blog. May you have a healthy and prosperous new year.

The Holiday spirit touches people in very different and often unsuspected ways. Yesterday it touched me. It was an incredibly beautiful day in the desert, about 70 degrees, with blue skies and absolutely no wind: the perfect day for a bike ride. I got on my bike and kept riding all the way from Palm Desert to Palm Springs and back again, about a 32-mile jaunt.

I was about two miles from the turn around point, cutting through the Palm Springs Airport and cruising to a stop for the traffic light where the airport exits on to Tahquitz Canyon Road. It was there I heard a high-pitched voice from behind me. “Hey,” the voice said, “is that a Trek Madone?”

I was now stopped at the light and turned to look. The voice belonged to kid about 11, and I realized he must be into bicycles in a big way if he could recognized the make and model of my bike from a distance. I stopped to talk to him, and we were soon joined by his older brother, younger sister, and his mom.

Turns out the kid was visiting his mother from Boulder, Colorado, and I told him that he lives in the bicycling capital of the United States, the home of Velo News Magazine, the Slipstream Racing Team, and lots of well-known bicycle racers. He knew all that, and prouldly told me he was just starting to get into bike racing and that he loved cyclo-cross too, because, he told me, “You get to race in the snow, the mud, and the goop of winter and that was a lot of fun.”

We chatted for about five minutes when I wished them all a happy holiday and pedaled off, thinking how nice it was to meet such an pleasant, focused, well spoken, and polite kid–a kid who has a passion and is pursuing it.

After riding into downtown Palm Springs and returning through the airport again, I saw another cyclist stopped with a map in his hand, and obviously trying to figure out where to go. I asked him if he needed directions. Turned out he was from Germany but spoke pretty good English and we were able to communicate.

He just arrived yesterday, had ridden from his sister’s house and had no idea how to get back. But he had the address and a map, and I was able to point him in the right direction. He told me he liked my bike and asked whether it was expensive. I told him I got it for about 60 percent of the original price because it was last year’s model and came painted with Discovery Team’s logo and colors, and since there was no more Discovery Team, Trek had to reduce the prices on this model to clear their inventory.

He was riding a borrowed bike, but told me about the bike he rides at home in Germany. We wished each other a happy holiday and I pedaled off, through the airport, through Cathedral City and Rancho Mirage until I was back in Palm Desert.

I was daydreaming as I rode, thinking that all in all, it had been a good year and I had plenty to be thankful for. I’m not sentimental in the least, and have never been caught up in all the seasonal celebrations. But there was good cheer in the air yesterday, and it came to me on two occasions on the access road leading to and from the Palm Springs Airport.

In fact, if I had spotted Santa’s sleigh making an apporach to the runway as I pedaled home through the airport, I wouldn’t have been surprised at all.

The World Trade Organization Issues a Decision
On December 21 a World Trade Organization (WTO) arbitrary panel ruled that Antigua is entitled to $21 million a year from the United States, a far cry from the $3.4 billion that Antigua sought in its claim against the US regarding online gaming.

The WTO’s ruling took into account only money Antigua lost through online horse-racing wagers, instead of all online gaming. The panel chose not to account for all online wagering that takes place in the US. Instead, it only awarded Antigua compensation from online wagers that are taxed and regulated.

While that’s the underlying logic to the WTO’s decision, it seems the WTO simply decided to throw Antigua a bone, and a small one at that, while allowing the US to pursue their course of unfair trade practices at a bargain price. Call it a tax on ufair trade practices, or the small cost of moralistic legislation that will cause the US to stay out of step with most of the rest of the world, while prohibiting citizens like you and me to play poker with our own money from the privacy of our own homes. There’s a larger cost too, the loss of billions in tax revenue and job creation that would accrue to the US if they were to regulate and tax online gaming.

Some Background on this Case
Antigua’s claim against the US is predicated on the US allowing certain forms of online wagering, such as horse race wagers, but prevents access to other forms of online gambling and therefore violates those sections of the General Agreement for Trades and Services (GATS) that cover online gambling.

Who’s Still Chasing Down the US; Who Settled Their Claims
The European Union, Japan, Canada, India, Costa Rica, and Macao joined Antigua in seeking sanctions against the US. The US settled with the EU, Japan, and Canada, but negotiations with India, Costa Rica, and Macao continue.

Letting the Fish Off the Hook
While online gaming companies urged their host countries to stand tough against the US in order to force them to reviser online gambling laws, the EU settled for smallish concessions. This let the US off the hook for much less than the amount that would be lost to the gaming industry itself as well as lost taxes to their host countries that are excluded from the US online gaming market—the largest in the world.

This Decision Can’t Be Appealed
The decision issued by the WTO arbitrary panel cannot be appealed, although the WTO must first approve the arbitrator’s decision before Antigua can act, and that approval will not come until January.

WORLDWIDE REACTION TO THE WORLD TRADE ORGANIZATION’S DECISION
Because there are so man y parties involved in this case, there are reactions from many quarters, and the issues involved in this case still comprise a very unsettled situation.

The Remote Gambling Association
Online gaming in the US is anything but neatly tied up and put aside in a box. The Remote Gambling Association, a trade association representing European internet gambling companies, plans to file a complaint against the United States for violating WTO rules by targeting foreign gaming companies while not prosecuting US online gaming operators.

The RGA said the WTO decision fails to address “…discriminatory and protectionist US practices against European and other foreign online operators in the form of selective prosecution related to trade in gambling services.”

The RGA’s Clive Hawkswood said: “How would US investors and businessmen feel if they invested in a business in the UK based on international law commitments, and then suddenly the UK not only passed new laws forcing them to shut down their business, but then tried to throw them in jail for past activities while still allowing their domestic competitors to continue on doing the same thing? That’s what is happening to our industry in the US.”

Safe and Secure internet Gambling Initiative
Jeffrey Sandman, spokesperson for The Safe and Secure internet Gambling Initiative, said the RGA’s action should encourage lawmakers to regulate internet gambling through Representative Barney Frank’s proposed internet Gambling Regulation and Enforcement Act.

According to Sandman, “It is time for the US to end its hypocritical practices that discriminate against foreign online gambling operators, while allowing US gambling operators to accept bets for certain forms of gambling. Regulation of internet gambling should be supported as a means to resolve this trade dispute.”

Trade Law Expert, Professor Joseph Weiler
Joseph Weiler, a professor of law at New York University, commented, “What is particularly troubling is that these prosecutions for past activity are still continuing. To compound it by selecting only non-US targets is even more troubling. To clarify the situation for the future for all is one thing, but that does not seem to be the case here.”

Anti-Gambling Advocate, Representative Bob Goodlatte
“Considering that Antigua and Barbuda were asking for over $3 billion in compensation, and they were only awarded a token $21 million, this decision is a partial victory for the U.S.,” said Rep. Bob Goodlatte, (R-VA), a staunch opponent of all online gaming—except, of course, for online horse race wagering. The inconsistency there stems from the fact that the horse race industry is a major contributor to Goodlatte’s campaigns. For the full story on how Rep Goodlatte’s philosophical inconsistencies, see my blog entry dated December 3, 2007.

Financial Services Roundtable
The Financial Services Round Table warned that regulations being drafted to enforce the Unlawful internet Gambling Enforcement Act (UIGEA) will present major compliance obstacles unless the Bush administration clarifies its conflicting views on online betting.

Bank of America
The Bank of America said that the Government should provide a list of specific entities that banks are forbidden to take payments from. “Without a definition of what is legal,” the Bank of America stated that “financial institutions will be forced to block legitimate transactions in order to avoid the possibility of permitting an illegal transaction.”

Antigua’s Reaction
Antigua’s finance minister Errol Cort described the WTO’s decision as a setback for the small Caribbean nation. Antigua had sought to apply $3.4 billion in trade sanctions against the US to compensate the nation for lost revenue due to unfair trade practices, but were instead awarded $21 million by the WTO.
Still, Cort is hopeful, saying “We think that this decision, as terribly flawed as it may be, should still have the desired result of getting the US to sit down with us and seek an amicable resolution. We look forward to meeting with the U.S. delegation in the very near future.”

Read the Full WTO Decision
The full text of the WTO decision can be accessed here:

PDF version of WTO decision: http://www.wto.org/english/tratop_e/dispu_e/285arb_e.pdf

When I was a kid growing up in Brooklyn, the Mafia did a ruthlessly effective job of collecting protection money from small businesses in the neighborhood. Bakers, butchers, bars, and others—they all paid their tithe to the local collector.

It was a nuisance, to be sure, but small potatoes when measured against the latest version of protection rackets: The shakedowns conducted by the US government. US Attorney Catherine L. Hanaway (pictured right), in a role befitting the boss of bosses, announced in a press release that Microsoft Corporation, Google, Inc. and Yahoo! entered into settlements with the US to resolve claims that they promoted illegal gambling. The total amount of the three settlements—or should I say shakedowns—is $31.5 million.

Running a Protection Racket: The Mafia Was Small Potatoes Compared to the Feds
While the mob’s take back in the day amounted to sums that were measured individually in the hundreds, and possibly the thousands for businesses that could afford to pay that kind of freight and didn’t have the cojones to stand up to the local mob collector. Even allowing for inflation over time, the government has raised the shakedown scheme to a level undreamed of by neighborhood capos of old.

If You Don’t Have the Balls to Stand Up to Them, the Bully Will Run Right Over You
It appears that Microsoft, Google, and Yahoo are severely lacking in the cojones department too. They absolutely rolled over and submitted to the big bully, instead of standing up and saying,”C’mon, bring it. Charge me with a crime,” then watching as the US government turned tail and scarpered off, because they’ve never charged anyone with online gambling offenses except in cases that violate the wire act—and that doesn’t apply to online poker.

Microsoft, Google, and Yahoo: Groveling Like Bitches on a Leash
Microsoft paid out $21 million: $4.5 million to the United States and a $7.5 million contribution to the International Center for Missing and Exploited Children (ICMEC) to establish a fund to assist ICMEC with its national and international mission. They also agreed to provide a $9 million online, public service advertising campaign to inform and educate a target audience comprised of college level or younger people that online gambling enterprises are illegal under U.S. law. The educational—or perhaps “indoctrinational” is a better word for it—campaign will run for three years, beginning in early 2008. This settlement, based on illegal conduct that Microsoft Corporation neither contests nor admits, resolves claims that between 1997 and June 2007, Microsoft received payments from on-line gambling businesses for advertising on-line gambling.

Google got off cheap, settling out for $3 million to resolves claims that they also neither contest nor admit that they received payments from on-line gambling businesses for advertising on-line gambling between 1997 and June 2007.
The Yahoo! settlement of $7.5 million also resolves claims, which they neither contest nor admit that they received payments from on-line gambling businesses for advertising on-line gambling between 1997 and December 2007. The company has now forfeited $3 million directly to the United States. Yahoo! Also agreed to provide $4.5 million worth of online advertising for a public service advertising campaign. The campaign, to begin January 2008, will tell users that operators and participants in online or telephonic sports bookmaking and casino-type gambling activities doing business in the United States may be subject to arrest and prosecution.

These settlements involve corporate conduct the Government found in violation of the Federal Wire Wager Act, federal wagering excise tax laws and various states’ statutes and municipal laws prohibiting gambling. Unregulated commercial gambling is illegal throughout the United States.

Take My Lunch Money Mr. Schoolyard Bully, But Please, Don’t Hit Me…
This, of course, is subject to challenge. Microsoft, Yahoo!, and Google simply gave their lunch money to the schoolyard bully, figuring that paying protection would keep them from a bloody nose on the way home from school.

Hanaway’s Spin…
According to Hanaway, “Honest taxpayers and gambling industry personnel who do follow the law suffer from those who promote illegal online behavior.”

…And Mine
Get up, Microsoft, Google, and Yahoo! Get on your feet. What kind of wusses are you? Stop groveling. Stand up to the government and maybe you’ll have the rights you deserve. If you don’t stand up to them they’ll take your lunch money again, and again, and again, in myriad ways, time after time, until they bleed you into abject submission or you decide that enough is enough and decide to fight back.

According to an agreement signed a few days ago, the US will provide the European Union (EU) with trade concessions in mail services and warehousing as compensation for removing gambling services from its World Trade Organization (WTO) commitment. Although the EU sought $100 billion in concessions, these accommodations fall far short of the mark.

The agreement offers new U.S. market opportunities for European companies involved in testing and analysis services, as well as in research and development, and postal and courier services.

Gambling will no longer be covered by US WTO commitments, and instead of choosing to regulate and license online gaming and garner billions in tax revenues in the process, the US will provide concessions to the EU in an amount less than $100 billion. Not a good deal from my perspective, but it satisfies those who see online gaming as morally wrong—except, of course, things like horseracing and fantasy sports, which have successfully lobbied their way through our congress and were cut out of the process.

No One Gets Off Scot Free…

The US decision to renege on treaty commitments to the WTO and close its markets to offshore internet gambling operators, meant the US had to compensate other governments that would be affected by its decision. According to WTO treaty obligations, any government harmed in this manner is entitled to negotiate compensation with the United States. The European Union, Canada, Japan, India, Australia, Costa Rica and Macao joined Antigua in requesting talks. Australia dropped its claim while Japan reached a deal.

…and Our Bad Deal Now Sets a Precedent

The agreement between the EU and the US will now play a role in ongoing negotiations between the US and China, India, Canada and other countries over the WTO issue. This includes the dispute with Antigua. A ruling on the amount of compensation due Antigua has been delayed.

A Short History of Legislative Stupidity

Last year the United States’ Unlawful Internet Gaming Enforcement Act (UIGEA) stopped U.S. banks and credit card companies from processing payments to online gambling businesses located offshore, closing off a growing business worth more than $12 billion. In March 2007, the World Trade Organization ruled that the US ban was illegal. The WTO ruled that although the US had the right to prevent offshore betting to protect public order and public morals, our government broke trade agreements because rules were unequally applied to American operators offering remote betting on horse and dog racing.

The WTO will soon rule on Antigua’s request to impose $3.4 billion in commercial sanctions against the US for its failure to comply with the ruling. Antigua, the smallest nation ever to win a WTO dispute, has requested an intellectual property rights waiver that would permit software, movie, and music piracy. Needless to say, this alarmed software and media companies no end, including Microsoft and Universal Pictures, and the Recording Industry Association of America.

This ruling is a blow to European online gaming companies, as firms such as PartyGaming hoped the EU might turn down a settlement in favor of fighting to restore their ability to operate in the United States.

Throw Them Under the Bus, Kick ‘em to the Curb … It’s All in a Day’s (Political) Work

Does this agreement sell out American couriers such as UPS and FedEx? Did the EU throw their own gaming industry under the bus? Time will tell. This complex affair could have been settled easily and simply had congress chosen to pass Representative Barney Frank’s (D-MA) bill, but leave it to politicians to continue to muck things up, and kill the goose laying a golden egg full of tax revenue in the process.

Congressman Barney Frank’s (D-MA) Internet Gambling Regulation and Enforcement Act, a bill that would regulate and license online gambling in the United States, has attracted Representative Ellen O. Taucher, (D-CA) as its forty-fifth cosponsor.

Congresswoman Taucher is a member of the Aviation sub-committee; the powerful Highways, Transit and Pipelines subcommittee, and chairwoman of the Strategic Forces Subcommittee.

Here is the list of representatives supporting Congressman Frank’s IGREA, a bill that would overturn the Unlawful Internet Gaming Enforcement Act (UIGEA):

Neil Abercrombie (D-Hawaii)

John Larson (D-Conn.)

Gary Ackerman (D-N.Y.)

Carolyn McCarthy (D-N.Y.)

Robert Andrews (D-N.J.)

Jim McDermott (D-Wash.)

Joe Baca (D-Calif.)

James McGovern (D-Mass.)

Shelley Berkley (D-Nev.)

Charlie Melancon (D-La.)

Howard Berman (D-Calif.)

James Moran (D-Va.)

Earl Blumenauer (D-Ore.)

Ron Paul (R-Texas)

Michael Capuano (D-Mass.)

Ed Perlmutter (D-Colo.)

Russ Carnahan (D-Mo.)

Ciro Rodriguez (D-Texas)

Julia Carson (D-Ind.)

Steven Rothman (D-N.J.)

William Lacy Clay (D-Mo.)

Linda Sanchez (D-Calif.)

Steve Cohen (D-Tenn.)

Adam Schiff (D-Calif.)

Joseph Crowley (D-N.Y.)

Robert Scott (D-Va.)

William Delahunt (D-Mass.)

Adam Smith (D-Wash.)

Bob Filner (D-Calif.)

Bennie Thompson (D-Miss.)

Vito Fossella (R-N.Y.)

Edolphus Towns (D-N.Y.)

Raul Grijalva (D-Ariz.)

Melvin Watt (D-N.C.)

Luis Gutierrez (D-Ill.)

Anthony Weiner (D-N.Y.)

Alcee Hastings (D-Fla.)

Robert Wexler (D-Fla.)

Michael Honda (D-Calif.)

Lynn Woolsey (D-Calif.)

Steve Israel (D-N.Y.)

Albert Wynn (D-Md.)

Peter King (R-N.Y.)

Don Young (R-Alaska)

Ellen Taucher (D-Cal)

Congressman Frank continues to state the importance of US players contacting their political representatives to express their position. This is, according to Barney Frank, one of the most effective ways in which further support for this and the regulation of US online gambling can be achieved.

If your congressional representative is not on this list of cosponsors, contact his office by letter, email, phone, or through the Poker Players Alliance at http://www.pokerplayersalliance.org/ and make sure your viuews are made crystal clear to him or her.

That’s the least we can do to protect our rights, and ensure that we can play poker online in the privacy of our own home.

We’re Number One—again! For the second year running, Lycos announced that “poker” was the top search engine topic during the year. Despite a year of headline grabbing activity by such tabloid-cover headline grabbers as Britney Spears, Paris Hilton, Anna Nicole Smith, Barry Bonds, Lindsay Lohan, and even Pamela Anderson, poker still generates more search activity than any other term.
I’ve read that poker’s popularity is diminishing. It’s not. While funding an online poker account is admittedly tougher with UIGEA in effect, and there’s way too much poker programming on TV that’s repetitive, uninteresting, and has weak production values, our collective interest in poker is not slowing down. The engine is running full speed ahead, and the interest in the game of poker has not abated—and doesn’t look like it will anytime soon.

So go ahead. Punch “poker” into your search engine of choice. Just to get a sense of how popular poker is, I typed “poker” into Google as I was writing this post, and 14,700,000 hits on all that’s available about poker will never be able to do it; the information overload is just too great. But if that information overload is indicative of interest in our game, it means you should always be able to find a poker game regardless of where you are located.

So stick a finger up in the air. And tell anyone who’ll listen, “We’re number One!”

As the trade dispute between Europe and the US over Internet gaming industry continues, the British Government said it favors regulation instead of prohibition.