CROSS-BORDER JURISDICTION
principal offender or an aider and abettor under federal law.
Additionally, at the international level, there are options for the U.S. to either seek amendments to treaty economic treaty provisions to clearly cover illegal gambling, which understandably would be a heavy lift in the global community, or to potentially sue in the International Court of Justice. However, the simplest approach, absent deregulation, may be a combination of a shift in enforcement mechanisms combined with the status quo. American jurisdictions could preclude internet wagering through IP banning but would likely be in violation of the same GATS provisions that underlie the Antigua matter. But, the U.S. response to the sanctions in that matter was to effectively ignore 30 the payment obligation even though the overall annual amount is relatively small compared to other U.S. obligations. Effectively, the U.S. leveraged its economic and political power against a smaller country that it believes is supporting criminal enterprises. So long as the protectionist nation is of a similar size (which many off-shore gambling havens are) and without other conflicting treaty agreements, the U.S. may be able to effectively bully its way through Bill 55-style legislation if it puts forth a unified regulatory position. Thus, it remains to be seen how non-EU countries that have not yet embraced online gambling will address the repercussions of Bill 55. Black-market gambling continues to pose significant challenges for regulators and law enforcement personnel. With growing public and industry support for effective measures against these illegal entities, and the ever-evolving tactics of black-market operators, regulators and policymakers cannot afford to appear ineffective. The specific actions they will take, or the consequences of failing to act, remain uncertain.
Potential action going forward All things considered, overseas regulators face a difficult challenge if the provisions of Bill 55 remain in effect in Malta or proliferate among other nations. To overcome the wall raised to protect certain offshore operators, regulators must be willing to undertake and follow through on aggressive enforcement action, and will need the support of policymakers to do so. One main avenue for leveling the playing field is for regulators to seek amendments to their enabling and enforcement statutes to provide effective remedies against protected operators. Germany’s federal gaming regulator, the GGL, began to implement IP blocking as a response to illegal online gaming in 2023. While this approach has yet to be approved affirmatively by German courts, 29 with affirmative approval via legislative action in the U.S., court approval would be unnecessary. Presumably, such action would require regulators and their law enforcement partners to seek some sort of injunctive relief against the operators. Given the situation regulators are faced with and the prospective lack of other available equitable relief, obtaining an injunction against operators appears feasible. Notably, such policy determinations would likely have to be made by state and federal legislators acting in cooperation, as states are unlikely to wade into international commerce issues where the federal government generally reserves the right to speak for the nation, and ideally a uniform system would be developed for states that seek to opt into such protections, rather than state legislators slowly weaving a patchwork of 50-plus individual regulator regimes.
DANIEL MCGINN Special Counsel,
Jones Walker, Tallahassee For information contact: dmcginn@joneswalker.com 001 850.214.5105
RILEY CORNELL Law Clerk, Jones Walker
29 https://igamingbusiness.com/legal-compliance/regulation/german-gambling-market-issues/, last accessed Aug. 25, 2024 30 See https://www.reuters.com/article/world/antigua-losing-all-hope-of-us-payout-in-gambling-dispute-idUSKBN- 1JI0VW/ and https://www.caribbeanlife.com/antigua-us-square-off-again-over-wto-ordered-compensation/
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IMGL MAGAZINE | DECEMBER 2024
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