World Bank and Online Casinos Agree - Get Rid of Protectionism

July 07, 2009 | News Category: Gaming Law

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The United States has been accused of protectionist practices for some time now, especially where it concerns online gambling. There have been complaints regarding this protectionism from both within and outside of the US.

Protectionism is the system by which a country will protect their local producers by limiting, or creating barriers, for imports of either goods or services to their market. The barriers can be caused by various laws either introducing quotas and tariffs or by imposing duties on the imports.

The World Bank has been the most recent to point a finger at the US government with regards to protectionist issues. In a gathering in Chile, Robert Zoellick, President of the World Bank, explained to the South American officials that countries wishing to worsen the recession will follow the protectionist policies they have been following to date.

Zoellick also noted that countries need to honor free trade treaties they have agreed upon in order to help reduce the effects of the recession. He said "It seems appealing to countries to encourage consumers to buy their own national products. But that's the road to the problem that exacerbated the downturn in the 1930s and led to the Great Depression."

Non-US members of the online casino industry welcome the statements made by Robert Zoellick, since they have been greatly affected by the ban imposed on them by the UIGEA (Unlawful Internet Gambling Enforcement Act). Frustration with the US policies in this regard have been exacerbated because domestic gambling online for horse racing is permitted by the UIGEA.

There are a number of European Union member states that are guilty of their own protectionist policies when it comes to laws regarding online casinos and other industries. The European Community has recently taken a hard line with those countries that establish laws in this regard and those that have allowed domestic operators to have monopolies in their markets. Those member countries that enforce protectionist policies will find themselves at European Community infringement hearings.

The large amounts of income, both in the US and outside the US, that would be generated in the United States by removing protectionist policies, would go a long way to helping ease the effects of much of the economic downturn that is being felt on a global level.

Barney Frank has proposed a bill which would bring about the legalization and regulation of the online gambling industry. He authored a separate bill with the main goal of removing the UIGEA from legislation. These bills, should they be accepted into law, would bring about changes in the online gambling community that would help improve the global economy.