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U.S. handed deadline to clarify Net gambling rules

WTO says the government has until next April to align its regulations with global rules designed to promote free trade.

The U.S. government has less than a year to clarify its rules about offshore Internet gambling, a World Trade Organization arbitrator has ruled.

The 31-page ruling (click here for PDF), issued late last week, makes April 3, 2006, the deadline by which the United States must ensure that its existing gambling laws don't discriminate against companies housed in Antigua and Barbuda.

The tiny Caribbean island nation had filed a complaint in 2003 alleging that the U.S. was violating international trade agreements through federal and state laws that restrict online gambling. The cross-border gambling and betting industry constitutes a critical part of its economy, it argued.

A WTO appeals body in April. Its report found that one particular U.S. law, known as the Interstate Horseracing Act, violated international rules because it seemed to permit out-of-state bets only domestically, not internationally.

"The U.S. has already announced its intention to comply with the WTO finding," said Neena Moorjani, press secretary for the U.S. Trade Representative. "We will continue our ongoing compliance efforts...All we need to do is clarify one narrow issue concerning Internet gambling on horse-racing."

Moorjani was quick to note that any action will "not involve weakening U.S. restrictions on Internet gambling." She said the government is currently exploring its options for implementing the clarification and has not decided whether the move will come from Congress.

CNET News.com's Declan McCullagh contributed to this report.