Against All Odds
Friday, August 4, 2006
Locked in a federal prison in the Nevada desert, tortured by the distant lights of the Las Vegas strip, Jay Cohen couldn't stop thinking about getting even with the government that had put him away -- and his revenge fantasy had a unique twist.
U.S. prosecutors put Cohen behind bars in 2002 for running an Internet gambling site in the Caribbean country of Antigua and Barbuda. Not long before the prison gates clanged shut, he had learned that the federal crackdown on online betting might violate global trade rules.
So he got Antigua and Barbuda to instigate a complaint at the World Trade Organization. "It kind of helped keep my spirits up," he said.
Fast forward: Antigua and Barbuda, population 69,000, is winning. The case has become an embarrassment to Washington, one that could result in economic pain. It isn't quite over, but the world's only superpower may have to capitulate to a country whose entire population could easily fit into the Rose Bowl.
Never has such a tiny nation brought a WTO complaint against the United States, which is one reason the dispute has implications well beyond the issue of gambling.
A frequent irritant in international relations is that small, weak countries such as Antigua feel run over by big, rich countries such as the United States. That's especially true in global trade. For instance, developing countries say their destitute farmers get the short end of the stick because of the subsidies and protections that rich governments give their farmers. Just last week, negotiations to redress such grievances collapsed.
The WTO, the body that referees global commerce from its offices in Geneva, claims to play equalizer: Its Web site notes that small countries have beaten bigger ones in its trade courts. A win for Antigua would improve the WTO's image of requiring all nations, Davids and Goliaths alike, to follow the rules.
At the same time, global institutions such as the WTO sometimes seem to infringe on national sovereignty, forcing countries to defy the will of their own people. An Antiguan victory could inflame such feelings in Congress. Sentiment against online gambling remains strong there; the House recently voted to bolster the U.S. ban on it.
Far as it may be from the central debates of world trade, the curious tale of Internet gambling in Antigua reveals a lot about the perceptions of fairness that fuel those debates.
Setting global precedents wasn't what Cohen, now 38, had in mind a decade ago when he quit his job as a floor trader at the Pacific Stock Exchange and moved to Antigua with a couple of friends.
Gambling was legal in Antigua, so Cohen and his buddies figured they would have no problem operating a business that took sports bets from people in the United States. Between golf rounds and fishing trips, they built World Sports Exchange Ltd., one of several dozen Internet betting parlors then springing up in Antigua and elsewhere.
They booked millions of dollars in wagers, mostly on football games and other sporting events in the United States. The industry boomed, becoming Antigua's second-largest employer, after tourism. "Life was fine," Cohen recalled.