GENEVA (AFP) - The World Trade Organization confirmed that a US prohibition the cross-border gaming and gambling over the Internet was illegal under global trade rules.
In a final version of the ruling on a challenge brought by the tiny Caribbean island of Antigua and Barbuda, a WTO disputes settlement panel said the restrictions imposed under some US state and federal laws were inconsistent with the WTO's GATS services agreement.
The interim ruling by the WTO on the case had already been leaked by officials from both sides in March.
The United States rejected the ruling and said it would lodge an appeal.
"We will vigorously appeal this deeply flawed report to the WTO Appellate Body and remain confident in the basis for reversing this panel report," Richard Mills, a spokesman for the US trade representative said in a statement.
Washington said it had clearly excluded gambling from its services commitments to the WTO when the global trade body was formed in 1995, as it had always maintained legal restrictions on gambling within its borders.
Antigua had argued in the complaint it launched in March 2003 that the US prohibition was harming its online gaming business, which is aimed at reducing the island's economic dependance on tourism.
The Geneva-based WTO panel emphasized in its report that it had only ruled on the compatibility of the gambling rules with US commitments under the services agreement, and not on the overall issue of restrictions on cross-border gambling.
"We have not decided that WTO members do not have right to regulate, including a right to prohibit, gambling and betting activities," it said.
Similar restrictions on cross-border gambling are enforced by other countries.
Antigua, with a population of about 68,000, is one of the centres for Internet gaming operations. Industry officials say US residents are major players in casino-style games and betting from offshore centres.
11/10/2004 - 19:01 GMT - AFP