Are We Making a Big Mistake

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Opinion Pieces

Wednesday, 30 January 2013 02:31

By Eli Fuller

Many of us will remember the offshore gambling money flowing in Antigua in the late 90s and after the millennium. It was like nothing we had seen since independence. One of my friends who worked for one of the biggest online casinos here said, "Everyone was spending like cowboys in a tavern."

In fact, most of my friends were working in that industry during that time. If you knew how to use a computer and happened to be searching for work, you were hired and were getting paid way more than your peers were in the hotels.

Four of my close friends started working for an online casino in the mid-90s. They were the only employees working in the converted house in Blue Waters, and within a few years they were writing marketing cheques to the tune of millions to companies like MSN and Yahoo.

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They had moved out of that little house office and were taking up an entire commercial building. They were working with dozens of others and the company was still growing. The island was buzzing and everyone was seeing some of the pie. The trickle-down was more of a waterfall than a trickle.

I remember attending an offshore sports betting company’ New Year’s party which they allegedly spent $100,000 on. None of us will ever know how much money was passing through Antigua's banks, but we were the biggest players in a multi-billion dollar industry. There were regular 25 year olds making way more money than both of their parents combined, and many of them never imagined it would end.

You know what they say about all good things though.

Things really took a turn when Jay Cohen, the founder of one of our biggest sports books, was arrested as he arrived in the USA in July 2004. He felt that the USA had no right to be preventing people in the USA from betting offshore in Antigua. The US had recently used the Federal Wire Act to stop US citizens from placing bets abroad over phone or internet. He was the first person to be charged by the USA for violating the Act.

The US did many other things in an effort to stop their citizens from betting offshore, including going after the credit card companies and other payment providers. It became extremely difficult to do business, and many casinos and sports books either folded or pulled out of Antigua. The economic trickle down really became a trickle, and in 2003, Antigua and Barbuda took on the USA at the World Trade Organization, saying that the US policy on online gambling violated WTO rules. In a David vs Goliath ruling, the WTO agreed with Antigua, thus beginning a decade of negotiations and arbitration.

In 2007, the WTO essentially gave Antigua the right to sell US copyrighted material to the tune of about US $20 M a year in a twisted form of sanctions. It was a fraction of what Antigua and Barbuda was looking for, and it was an extremely controversial judgement which wasn't going to be a quick fix. Either way, Antigua would more than likely be getting the dirty end of the stick. It makes me think about all those WTO protests, to be honest.

Anyway, Jay Cohen seemed optimistic when I spoke to him about it. He had done his jail time and was back in Antigua taking a back seat to it all, but following the discussion nonetheless. A few years ago, he told me that he felt that the minute Antigua started selling US copyrighted material, companies like Microsoft would be lobbying for a change in offshore gaming policy. He felt that offshore gambling's biggest allies would be the American companies who were having their material legally sold (pirated) by Antigua.

Antigua and Barbuda didn't jump at the green light to be modern day privateers and instead continued to negotiate, hoping that the USA would relax its stance. Nothing changed, and on Monday, Antigua applied to the WTO to start imposing the recommended sanctions. The World Trade Organization agreed, and Antigua has said that it would be reasonable and responsible in the way that it sells US intellectual property.

Like most people, I am eager to find out which property is going to be reasonably sold without the owner getting paid. You can imagine how unreasonable the property owner will think it is.

This weekend, I spoke with one of Antigua's most respected music producers about the WTO judgement. Torsten Stenzel is a German award-winning musician, songwriter, composer, and producer who now resides and runs his internationally famous studio here in Antigua. Apart from local and regional artists like Jah Cure, Buju Banton, Drastic, Jus Bus, Tian Winter, Claudette Peters, Logiq, Kenni Blessin, Itchy Feet, Asha, Shya, and Promise, Stenzel has worked with huge international acts and his list of associates and collaborators is huge. Since 2007, he has attracted many music industry icons here to Antigua to work in his studio, and while his Antiguan company is getting stronger and stronger, he is worried that all of his work will be jeopardized by what our government does next.

Stenzel said, "Selling music and movies without paying the musicians and artists is unfair, and will cause worldwide problems and not just problems with the US. Since illegal downloading went through the roof, the music industry is having a hard time, and artists get little or no revenue from selling music. Some talents live like homeless people, yet have a million views on their Youtube music video. People always think the pop stars are rich, but the ones who are making money are way less than 1%. Government needs to protect their creative people and not just sell them out with no pay."

I reminded him that this would only apply to US copyrighted material and that Antigua has been backed into a corner by the USA. He disagreed. "I think that once a torrent site is up and running, it will be difficult to make sure that only US copyrighted material is being sold,” he said. “Before you know it, there will be every kind of music from all over the world being sold on it. I agree that the US has no right to destroy the local online gambling industry, but if you legalize downloading copyrighted material, you are hurting the artists that have nothing to do with the problem, and not hurting the US government. It is the wrong signal and will affect people who have nothing to do with the original problem.”



He added, “I have had big industry names calling me recently asking me about what the BBC is saying about Antigua setting up a pirate site. I don't want this! In March, we fly in Sony Music executives from Japan, and the news that Antigua supports music piracy isn't going to be positive for our relationship and future music business coming to Antigua from Japan."

I put it to Stenzel that it may be foreseeable that the music industry would end up being indirect allies in Washington, and that artists could possibly join with Antigua in the call for a change on US gambling policy. He didn't seem as optimistic as Jay Cohen though, and for a moment I had a vision of Madonna, Beyonce, and Bruce Springsteen doing a TV commercial calling for a boycott of Antigua as a tourism destination until they stopped stealing their music. Who knows what will happen when the downloads start. The USA has made it clear that it would consider any downloads to be theft and piracy. It's something to think about, and there can be no doubt the this story is far from being finished.

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