With Online Poker, Fairness Got Lost in the Shuffle

Internet gambling has wide-ranging consequences and implications on a local, national and international level. Historically, gambling decisions have been a local legal matter. Many municipalities and states have legalized gambling activities such as lotteries, horse racing and casino games. Some of these activities are also allowed online.

Local laws have led to an international problem. Antigua and Barbuda successfully sued the U.S. because domestic operators enjoyed an unfair advantage for online gambling. Using the World Trade Organization (WTO) to settle the dispute, the small island nation eventually won a $3.4 billion award.

The U.S. initially chose to ignore the judgment. The U.S. later claimed it failed to see the consequences of online gambling when it agreed to the General Agreement on Trades and Services (GATS). Reneging on GATS could cost the U.S. a significant amount of money. Thirty-five countries -- including the 27 members of the EU -- have joined Antigua and Barbuda's complaint to the WTO, and estimates of the cost to the U.S. could be as high as $100 billion.

All of this could be resolved by approving Frank's bill, according to the Safe and Secure Internet Gambling Initiative's Jeffrey Sandman, per PRNewswire:

"Rather than face paying billions in trade compensation, which would have a significant adverse impact on the American economy, the U.S. should embrace the legislative solution presented by the Frank bill, which brings the U.S. into compliance by regulating Internet gambling and creating a level playing field among domestic and foreign Internet gambling operators."

The Rise of Poker

The most notable consequence of the UIGEA was its effect on online poker playing in the U.S. Many online poker sites feared sanctions and stopped accepting customers from the U.S. The largest operator, Party Gaming PLC, which is publicly traded on the London Stock Exchange, ran Partypoker.com. After announcing the policy, the stock lost more than half of its value the following day.