UIGEA Costs Frist World Bank Presidency
Last week, the White House announced that former U.S. Trade Representative and Goldman Sachs executive Robert Zoellick has been chosen to succeed Paul Wolfowitz as World Bank Group president, officially putting to rest speculation that former Senate majority leader Bill Frist might be tapped for the position.
Frist’s return to the public eye caught the attention of the poker world, for whom the conservative Republican will always be remembered for having successfully appended the Unlawful Internet Gambling Enforcement Act to must-pass legislation on national security last fall. It is possible Frist’s pro-UIGEA stance could have negatively affected his candidacy to head the World Bank.
Frist’s endorsement of the UIGEA might have factored into officials’ thinking regarding his suitability to serve as World Bank president. In a dispute brought against the U.S. by the island nation of Antigua and Barbuda, the World Trade Organization ruled earlier this month that the UIGEA in fact placed the U.S. in violation of preexisting trade agreements. The U.S. responded to the WTO ruling by announcing its intention to redefine its international trade commitments to exclude offshore gambling. As the WTO dispute continues, Antigua and Barbuda are meanwhile planning a claim for financial compensation from the U.S. in exchange for their compliance with a ban on online gambling.
Over the past decade, online gambling has emerged as an important boost to the Antigua and Barbuda’s economy, representing as much as one-sixth of the country’s annual revenue. Since the UIGEA became law, some reports have estimated Antigua and Barbuda to have lost over $100 million in expected revenue, a direct consequence of several online gambling sites’ decision to pull out of the American market.
Antigua and Barbuda is part of the Organization of Eastern Caribbean States, a group of islands with limited natural resources and a high vulnerability to natural disasters. As such, the World Bank frequently oversees the granting of aid to countries of the OECS, including Antigua and Barbuda. Naming Frist to head the World Bank would therefore have created a curious, perhaps untenable situation — the man largely held responsible for legislation damaging to the economy of countries like Antigua and Barbuda would have been placed in charge of overseeing developmental assistance for those same countries.
