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free trade and gambling August 23, 2007

Posted by Bradley in : Uncategorized , trackback

I tend to be risk averse. My idea of gambling is to go out of the house in the summer in Miami without an umbrella (I grew up in Manchester in the UK which always used to be very rainy, and was again this summer). And I managed to spend a few days in Las Vegas without being tempted to gamble once. But I am intrigued by the instinct to gamble, and by the inconsistent approaches that policy makers adopt towards gambling. Today’s NY Times piece on the Antigua and Barbuda WTO claim against the US relating to US attempts to control internet gambling quotes John K. Veroneau, a deputy trade representative, as saying:

It is truly untenable to think that we would knowingly bargain away something that has been illegal for decade upon decade in this country

But, given that the dispute arose between Antigua and Barbuda and the US, it is worth noting that Mr. Veroneau also wrote earlier this year:

The World Bank estimates that the full elimination of trade barriers can lift tens of millions more out of poverty; hence, the moral imperative to find a way forward on trade is clear. Moreover, while debt relief and foreign aid can make an important contribution to development in poor countries, trade and trade liberalization are likely to be even more powerful tools for alleviating poverty and providing societies with the economic resources to address their most pressing needs. Again according to the World Bank, the annual income gain to developing countries from the elimination of trade barriers to goods alone is $142 billion, conservatively measured. This amount exceeds the $80 billion in foreign economic assistance by the major industrialized countries in 2005 and the proposed $42.5 billion for developing country debt relief combined.

Wealthier regions and countries than Antigua and Barbuda, such as the EU, may have more clout with the US Government.

Distinguishing between gambling and other economic activities would make some sense if in fact the US were consistently opposed to gambling. On the one hand, increased enforcement of anti-gambling rules has led to developments such as Linden’s announcement of a new policy banning gambling in Second Life. But on the other hand, states encourage people to gamble via state lotteries. In the year ending June 30, 2007, the Florida lottery had net sales of over $4 billion. That is a lot of money – and it is generated by one state lottery, albeit in a populous state.


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