Mark Mendel is the attorney who represents Antigua and Barbuda in the World Trade Organization dispute against the United States that is causing headlines worldwide because of the grand implications the case has not only for the U.S., but for the WTO itself.
WTO panels have repeatedly ruled in Antigua's favor in Antigua's claim that the U.S.'s anti-remote gambling stance constantly violates WTO agreements, but instead of moving to get into compliance with WTO rules by opening up its virtual doors to online gambling, the U.S. took a road never before traveled: it revised the agreement.
This move has opened the gate for other countries to follow Antigua and file claims against the U.S. The case not only will cost the U.S. government and its companies billions of dollars in sanctions but, according to Mendel, it has "the potential to be kind of the poster-case for what's wrong with the WTO and globalization."
Visit
CardPlayer.com's gambling legislation section to learn more about the case.
Mendel was kind enough to sit down with
Card Player this morning to talk about the dispute:
Card Player: How long have you been working on this case?
Mark Mendel: I developed the case on my own initiative and brought it to the Antigua government and convinced them to hire me to do it, so I started working on it almost exactly five years ago.
CP: Where are you at with it?
MM: We've won every step of the way and basically the U.S. has run out of options and ways to claim that they actually won the case, so now we're in the very last stages of the dispute at the WTO.
The U.S. has failed to comply with the ruling so we're entitled to impose trade sanctions against them to kind of induce them to come into compliance with the ruling, and we're in the very last stages of an arbitration to decide how much on an annual basis we can impose on the U.S. until they comply.
CP: In your mind, why is the U.S. taking such a hard stance when basically the rest of the Western world is embracing this new industry?
MM: You know, it's a really strange thing, and if you at look historical parallels, it's not so unusual for the United States to adopt a reactionary stance on something they don't understand. I think there's quite a bit of that "well, this can't be good, it just has to be bad."
There's also a lot of anti-competitive motivation. I think the U.S. gambling interests, as they exist now, are quite happy with the monopolies they have, and they're worried about competition. I think the U.S. sees how big this industry can be and doesn't want -- it's a very selfish thing for them to say -- but doesn't want that much money going out of the country. So, until they can sort things out domestically and come up with a way to have U.S. companies dominate the global business, they could be viewed as wanting to destroy competition.
CP: How powerful are the American gambling interests when it comes to lobbying legislators?
MM: I think they're quite powerful. We, of course, monitored the development of legislation through congress over the last four years, and virtually all these people, from (Senator Jon) Kyl to (State Rep. Bob) Goodlatte to (former Congressman Bill) Frist to (former State Rep. Jim) Leach, the people in Congress who are long-term antagonists of remote gambling, all have considerable financial support from land-based gambling interests. That's public record.
I personally detect that I think a lot of this policy, this hard line, is being set by a very limited cadre in the Department of Justice. They are still viewing this as a Mafioso kind of enterprise; they're still stuck in the heydays of the wire act, with Bobby Kennedy talking about these Italian mobsters and stuff like that. I think you still have some people who view this in that context, even though the reality is completely different.
CP: Tell us what it's like negotiating with U.S. attorneys.
MM: We go into a room and say lets discuss things and then they wait for us to talk and they don't do or say anything. All of our negotiations to date have been negotiating against ourselves, and we're hoping that will change one of these days.
CP: How serious is the WTO when it comes to punishing countries that decided to revise their agreements rather than comply with them?
MM: Well, I guess we're going to find out, because nobody has ever tried to do it before, and that's the astonishing thing about our little case. But in the young but very active history of the WTO, no country in the 300-some disputes that have come before the WTO, to date, has ever tried to do this [revise an agreement like the U.S. has].
And I don't think [the sanctions are] going to be well-received, but the WTO is a bit hamstrung. It doesn't have an army, it doesn't have a way of collecting fines, it's kind of a voluntary organization. You have to rely on the motivations of all member countries to preserve the institution as a viable working entity.
Despite the dozens and dozens of cases the U.S. has been involved in, they made this the one case that could perhaps ruin the fabric of the WTO. I'm hopeful that by the end of the day that calmer heads will prevail, and with commitment there will be a solution.
CP: This case has the potential to define the strength of the WTO. Do you think the U.S. feels the same way?
MM: Well, it presents them with a real dilemma, because they never thought they would lose the case, and they kept hoping that they could either defeat us at some stage or tire us out. I think they're very surprised that the case got to where it is and that we're not tired. So, it's presenting them with a real dilemma because this case has the potential to be kind of the poster-case for what's wrong with the WTO and globalization.
If in the very first instance of a small country defeating a large country, and the large country simply fails to comply with the decision, then you expose the WTO for what a lot of people said it is, and that's just something to benefit the big countries at the expense of the little ones.
That is a very serious issue facing them. They don't want that publicly debated, but, of course, we do, because we think that's a very real prospect.
And then the other thing is that the United States, although they have been on the losing side of a number of cases, they have used the WTO as a sword to further their own global economic interests. They have pending cases with China now over intellectual property. They have cases with Airbus over subsidies. It's been super-important for them and United States' economic interests have profited heavily by the U.S. involvement in the WTO.
So, if in this case that they don't like so much they refused to follow the rules, what is that going to mean to American economic interests going forward? It presents them with a real problem.
CP: What kind of sanctions are you seeking for Antigua?
MM: We have asked the WTO to authorize us to take those sanctions out in the intellectual-property field.
CP: And that could be applied to anything from movies to computer programs?
MM: Yeah, just anything with a trademark or copyright. Any U.S. intellectual property rights would not apply to Antigua. And a lot of people say you're just going to be pirating, and I say, no, it's not pirating, because it would be lawful.
CP: This can't make the U.S.-based companies happy. Are the companies lobbying legislators to get something done?
MM: That is a big prong of what it is we're trying to do to motivate the United States to come into compliance or work out a reasonable settlement with us. And really, we really don't have an interest in selling Microsoft Office or selling copies of Hollywood blockbusters for a penny, that's really not what this case is about. By getting this authorization, what we're really trying to do is to mobilize the forces of intellectual property in the United States to motivate the government to do the responsible thing here.
Say we get authorization to suspend the intellectual property rights to the tune of $1.5 billion a year. In essence, Microsoft, the pharmaceutical companies, or somebody else is going to be paying for the refusal of the United States government to deal with this case. What that really means is the U.S. government would be overprotecting its gaming interests at the expense of a completely unrelated industry that has nothing to do with gaming. We're preaching that gospel and are starting to see people pricking their ears up at it.
CP: What are some of the larger countries that, able by WTO rule, are seeking sanctions against the U.S. because of this case?
MM: The biggest is the European Union; it is a multi-billion dollar claim. And then there's Canada, Japan, Macau, Costa Rica -- Costa Rica might have a pretty decent-sized claim. There are enough people that have submitted claims that it could be a real disaster for the U.S.
CP: How important is this case to the future of the WTO?
MM: I think -- and it's not just because I'm involved -- I think it's the most important case by far before the WTO right now. It's a mass of implications. We played by the rules and won every step of the way, and if turns out that the U.S. is going to effectively say, "Well, too bad, we're still not going to pay attention to you," it has very, very bad implications for the future of the WTO.
CP: How do you think this case is going to affect the status of online gambling in America?
MM: I think it has already affected it and it's going to have a major effect on it. I don't know how the U.S. effectively in the near-term could be able to say, "We have to give Antigua market access, so we're going to do it, but we're not going to open up our domestic markets." That won't fly. If MGM Grand sees that Antigua is able to offer whatever services to all of America, MGM Grand -- and you know they are -- will get the American Congress to open it up to everybody.
I think that this case has focused people's awareness of the issue. It's given it higher profile. It kind of pushed along the development of the industry, it showed that the industry is not all the bad things that the United States likes to say it is. It's just done an awful lot.
I think change was inevitable, anyway, because people like remote gambling. It's kind of like drinking beer, you can't legislate that away. I think we just kind of focused and accelerated the process.
CP: Do you ever see the U.S. allowing its residents to gamble online?
MM: Absolutely. It's inevitable.
