Antigua dissatisfied with US position on Internet gaming

Published: Tuesday April 17, 2012
 

Prime Minister Baldwin Spencer says the United States (US) has not done enough to settle a long outstanding Internet gaming dispute with Antigua and Barbuda.

The Antiguan PM met with the US Trade Representative Ron Kirk on the issue on the weekend, but expressed disappointment that, although the case was first adjudicated in 2003, Antigua and Barbuda and the US are yet to find a "mutually agreeable solution to settle the case".

Spencer said Antigua and Barbuda had put forward several options to settle the case but that "there has been no fairness in the proposals received from the United States to date.

"Antigua and Barbuda's Internet gaming sector has been decimated by the actions of the United States, and we believe that we must be fairly compensated for those losses," Spencer said.

In an effort to bring a fresh perspective to the case, Spencer said he urged the trade representative to accept Antigua and Barbuda's recent proposal to take advantage of a "good offices" mediation effort by the director general of the World Trade Organization (WTO).

Spencer said Kirk acknowledged that a solution to the case had been elusive but assured him that "the United States remained committed to working with Antigua and Barbuda in finding a solution to the case".

The Antiguan leader said Kirk "expressed the willingness of his office to review the latest proposal from Antigua and Barbuda and to hold further discussions with Antigua and Barbuda's Ambassador in Washington, DC, over the next few days so that a strategy for further action could be discussed."

In 2005, the WTO ruled that the US had violated international trade agreements by prohibiting operation of offshore Internet gambling sites.

Antigua claimed that it lost US$3.4 billion a year due to the US action, but the WTO awarded Antigua US$21 million.

- CMC http://jamaica-gleaner.com/gleaner/20120417/business/business2.html

---

Antigua considers new case against USA at World Trade Organization

Steven Stradbrooke
April 9, 2012

Many in the gambling industry thought they’d received an early Christmas gift following December’s surprise announcement by the US Department of Justice that the Wire Act pertained only to online sports betting. For the nation of Antigua, it was like getting a Christmas gift they’d been promised years ago, but appeared to have got lost in the mail. For Antigua, the DoJ opinion appeared to be the first serious acknowledgement US authorities had given the World Trade Organization’s ruling that America needed to get its online gambling house in order.

...

‘OLD RELIABLE’ JUST WON’T CUT IT ANYMORE

Mark Mendel, Antigua’s lead attorney in the WTO dispute with the US, told CalvinAyre.com that the DoJ’s pre-Christmas bombshell had “vaporized … the entire defense. The American government has now admitted that we were right all along in our assertions about US gaming law. It is going to be very hard for them to fall back on the ‘old reliable’ that they ban all remote gaming because it is incapable of regulation. I am hopeful that they will realize at this point that settlement is in everyone’s best interest and engage on a constructive basis with Antigua.”

Problem is, as Mendel knows all too well, “to date, [the Americans] have simply ignored the whole thing.” It’s tempting to conclude that the US attitude towards the WTO is like how Robert De Niro’s character in Casino described the betting habits of Joe Pesci’s character Nicky Santorro. “When he won, he collected. When he lost, he told the bookies to go fuck themselves. I mean, what were they going to do, muscle Nicky? Nicky was the muscle.”

Looking ahead, Mendel says Antigua is considering a number of options, including “commencing a new case altogether.” In arriving at the $21m annual compensation figure, the WTO used a formula that considered only Antigua’s theoretical share of the US online horse wagering market. Given the imminent expansion of online betting options in the US, that horse-racing-only formula now seems even more insufficient.

Full text in http://calvinayre.com/2012/04/09/legal/antigua-considers-new-case-against-usa-at-world-trade-organization/


See also:
•WTO Antigua dispute still smoldering
• http://www.antiguawto.com/   WTO online gambling trade dispute brought by Antigua against the United States - Measures Affecting the Cross-Border Supply of Gambling and Betting Services (DS285) ("US-Gambling") case papers.
•WTO official case page

Costa Rica provides option for online gaming

Just like in 2008 and 2009, the CR Legislature met in late 2009 to vote on a law to regulate gaming and impose special taxes. No English translations exist of the bill, which is available here in Spanish http://twitdoc.com/c/r5xg5y

The workers of sportbook companies who employ thousands inside CR have a website http://www.empleadosapuestascr.com/ and Facebook page where they posted a call to sensible regulation of gaming which translation we quote below. "Sportsbooks" are call-centers in Costa Rica which hire thousands of Costa Ricans who take in calls for users of betting companies (not necessarily casinos or online gaming).

This legislation would affect mostly brick-and-mortar casinos, where Presidential candidates have made their concern about their relationship with sex tourism. The election in February of Laura Chinchilla has made restrictive regulation of casinos more likely although she has expressed her wishes of not endangering true tourism.

Online gaming have less of a negative effect since they have no physical location. As of now, Costa Rica companies are chartered to conduct online gaming through websites outside of Costa Rica. According to gamingzion.com, "Online gambling in Costa Rica is completely legal. It is so legal, in fact, that the country is home to more than 200 internet gambling organizations. These groups run websites that are licensed and hosted out of Costa Rica, but the sites target players all around the globe. Unlike some other of the world's internet gambling hotspots however, Costa Rica's online gambling scene is quite lacking in government oversight. Licenses are quite easy to obtain, and regulation is basically non-existent".

This makes Costa Rica an option when compared to high licensing fees in Malta, Panama or Belize. However, shortcomings in the Costa Rica banking system means that bets placed through credit cards (such as U.S.-based Visa) may be routed through processors in places such as Cyprus and Israel. The existence of legal restrictions in the Costa Rica itself, U.S. and other countries mean that online gaming websites must install appropriate filters to exclude users from those jurisdictions.

Costa Rica companies are subject to payment of income tax on their local income. This means that companies which conduct online gaming from foreign websites are not required to pay Costa Rica income tax, but still have to pay the Education and Culture Stamp Tax ( Ley del timbre de educación y cultura, N° 5923 de 18 de agosto de 1976) and pay a resident agent fee for filing form D-110 of said tax based on the net capital of the company.

Costa Rica companies can be Corporations or Limited Liability Companies. Their formation can take around 2 months (unlike 1-3 days in Panama) and shareholder meetings must be written every year into hard-bound ledgers. Nominees may be appointed as directors or shareholders.

---

A few of our coworkers at several bet processing centers have requested us to post our pledge in English as they wish to support us and join our fight. Their jobs are also at risk but they understand that, in reality, the majority of the jobs in danger are from Costa Rican citizens.

Dear Colleagues,

We urge the Congressmen and Government of Costa Rica to make a detailed review of the Regulation Law for Gambling and Casinos.

As employees of the SportsBooks we propose:

• Creating a law that would regulate the sportsbooks in a different way than land based Casinos.
• Reasonable fees or operating licenses rather than miscalculated taxes.
• Consider the Laws of other countries like Panama and Antigua as a base to make a new local rule.

The approval of this Bill, in its current 17, 551 way, will irreversibly cause the exit of the sportsbooks from Costa Rica and, therefore, the lost of thousands of jobs.

Learn more, Participate, and comment on www.empleadosapuestascr.com

We need your support!

---

Costa Rica's President-Elect is a Good Bet for Online Gambling
Tuesday, February 23rd, 2010
Costa Rica is a country where gamblers of all denominations can feel right at home. Gambling is explicitly legal and proves to be a booming business within the country. The small nation is home to 30 large casinos and hundreds of other gambling establishments.

Costa Rican gambling law permits just about every form of gambling. Though the gambling industry seemed to be bounding on without limits, the government has started putting more energy into regulating it over the past few years.

Through gambling, the government has a great opportunity to raise revenue and through different regulations they can adjust their intake. Up until this point, the industry's only concern was whether or not the government will raise its taxes on gambling.

A new president, Laura Chinchilla, has been elected in Costa Rica, but has a few months before she will take office. President-Elect Chinchilla is the first woman to be elected president. Land-based casino operators are not happy with the President-Elect due to her open dislike of gambling facilities due to their unfortunate relationship with prostitution. Land-based casino can expect stricter rulings and regulations from this point on, through the new government.

Online gambling sites in Costa Rica, however, have nothing to worry about. President-Elect Chinchilla is highly supportive of the online gambling industry and all of the business that it brings to the nation.

Online Casinos in Costa Rica are obviously much cleaner than their land-based counterparts when it comes to prostitution due to the lack of a physical location. Many online gambling havens are based in Costa Rica and are accessed from all over the world. Brick and mortar casinos also cater to an international scene being that new laws require casinos to be attached to large hotels.
Source: Top10CostaRica.com

Panama Online Gambling Regulation

After being shut out of the U.S. market last year with the Unlawful Internet Gambling Enforcement Act (UIGEA), companies such as UK's Partygaming (PRTY.L) and Austria's Bwin (BWIN.BE) continue operating legally, even getting funds from investors in the London Stock Exchange and looking forward to customers in emerging markets of China and India. Representatives Barney Frank and Ron Paul introduced H.R.5767 which would stop its implementation but approval will not discourage others doing business outside of the U.S.

The Inter-American Trade Report, October 2003, has a short summary of the regulation for online games in Panama.

---

PANAMA: Online Gambling Regulation

Panama regulated online gambling operations this past February via Resolution 065 of the Games Control Board (Junta de Control de Juegos). Although under the Constitution gambling is a state monopoly, local jurisprudence has upheld the power of the State to grant concessions to operate said activities on its behalf to private companies. Online casinos would be exempt from Panama income taxes, since Panama taxes only local-source income and the Regulation allows online transactions only with users from outside of Panama.

Online gambling operations must prove economic solvency and previous related experience, and upon granting of the license must pay a US$10,000 fee and a yearly US$20,000 license.

Operators must comply with money-laundering regulations and notify the Financial Analysis Unit of any suspicious transactions above US$10,000. An account must be maintained to guarantee payment to winners. Infringements are subject to a fine ranging from US$1,000 to US$50,000.

By Alvaro Aguilar
Gaceta Oficial, Feb. 3, 2003
http://www.natlaw.com/panama/topical/ec/ecomm.htm

Keywords: online gaming, casino, gambling

Setting up an e-business in Panama

http://www.panama980.com/issue04_05.php
http://www.panama980.com/products1.asp?step=25&id=58&catid=4&pstring=58

>> setting up an e-business in panama
by Alvaro Aguilar


In this day and age of connectivity, modern technology allows many individuals to run their business from wherever they are. When considering where to relocate, Panama provides excellent opportunities to continue managing a business and tend to customers worldwide from your new tropical location.

High bandwidth increases connectivity
The central location of Panama, right in the middle of the Americas, makes it the place where submarine fiber-optic communications circuits between North and South America converge. This allows users in Panama to enjoy extraordinarily ultra-high-speed bandwidth intensive applications such as multimedia and digital video, enabling fast and reliable connections for B2B, banking, ecommerce and other businesses as well as additional high-speed consumer activity units. Currently, Panama has the same bandwidth capability as New York City, with the difference that Panama uses 3% of its capability as opposed to 70% in New York.

Several local companies have set up data warehousing facilities in the Panama Canal area, where these circuits converge. These companies provide large and small online businesses with the use of their servers or can host their servers in special secure rooms
dedicated to providing rack-mount space.

The increased connectivity has encouraged 20 call center companies to employ around 5,000 workers, available for customer service. Currently, most centers serve businesses in the United States, especially Hispanic customers. The Government has increased the availability of English-speaking personnel for these centers with special education programs. An expatriate who only needs a single person for customer service can retain one of the many small virtual office services which provide a receptionist and a dedicated telephone line.

Special laws for online activities
Larger online businesses may have their office in Export Processing Zones, which allows them to claim benefits such as duty-free importation of equipment, low taxation and more flexible labor conditions. Offshore services, such as international marketing, financing, management, consulting and all services related to information technologies for data processing and technological research for clients abroad, may be set up at these Zones.

Additional benefits are provided to businesses set up in the City of Knowledge, a special technology park zone located next to the Miraflores Locks of the Panama Canal. Businesses have a 25-year income tax exemption and are exempt from limits on hiring of foreign staff.

The government grants online gaming licenses to operations whose owners provide full background information and pay a S$20,000 yearly license fee. In addition, they must maintain a bank account in Panama to ensure payment of prizes.

Tax and Financial Framework to Ensure Success
Once the hardware and logistic issues are dealt with, there are many advantages when setting up a business in Panama. A Panamanian corporation can be set up in a few days and its activities are not subject to Panamanian taxes as long as it sells to clients located outside of Panama. With proper legal advice, shareholders can arrange the structure of the corporation to defer or reduce the taxes they have to pay in their home country. In most countries, online transaction tax is based on the nationality of the corporation owning the domain of the business or on the location of its server, which further favors choosing a Panamanian corporation with Panamanian servers to conduct business.

A foreigner who qualifies for a retiree visa but wishes to maintain an active lifestyle can run a business online without the need of a work permit if he or she maintains a minimal business presence.

Alternatively, an expatriate owning a business with physical offices in Panama, 3 full-time employees and US$40,000 in investment can apply for a small investor visa. Other visa options are available when higher amounts are invested.

Panama has around 100 banks, out of which several actively seek out clients for e-commerce services. Prospective businesses must provide all due diligence information on the background
of their owners. Basic information on the structure of the online transactions must be provided to the bank to ensure that no unlawful activities will be conducted through the bank. Once the
bank official is acquainted with the purpose of the e-commerce activities, transactions are conducted in a secure manner under Panama’s confidentiality laws. Alternatively, micro payments can be routed through non-bank “digital cash” online services, some of which are incorporated in Panama but do business though banks elsewhere.

This combination of advantages makes Panama the ideal location for an e-commerce operation. º

lombardi aguilar & garcia Tel. ( 507) 340-6444

http://www.laglex.com/