|Antigua and Barbuda says laws blocking US residents from using online casinos breach global fair trade rules and threaten a valuable part of its economy. |
The move comes a fortnight after the US House of Representatives voted to ban credit-card payments to internet casinos, most of which are based overseas.
The US government has defended the need for controls on internet gambling to protect children and prevent financial crimes such as money laundering.
But Antigua's government argues that its online casinos are some of the best-regulated in the world.
As a result of the US laws, winnings are not being paid as all the gaming industry's financial transactions are being blocked, Antigua's High Commissioner in London Sir Ronald Sanders told the BBC.
One person has already been jailed in the US for running an online casino in Antigua, he said.
Altogether about 3,000 people in the country's two islands earn a living from the gaming industry but some gaming companies have already had to close.
'These are well paying jobs for very talented young people so it's a great difficulty as to what we find for them to do,' said Sir Ronald.
Antigua's financial regulators classify online casinos in the same bracket as banks and apply stricter rules than the US, he said.
'Because we classify them as financial institutions they are subject to intense regulation', including laws on fraud, money laundering and terrorist finance, said Sir Ronald.
'We do have very talented, very literate, very well qualified population who have mastered the internet technology. They have a right to compete in the world if they wish to,' said Sir Ronald.
He also pointed to widespread international drug trafficking elsewhere in the Caribbean, saying online gaming had provided an alternative route to affluence for residents of the two islands of Antigua and Barbuda.
Antigua's online gaming industry generated $37.5m in taxes in 2000.
The dispute is the first concerning electronic commerce to be brought to the World Trade Organisation since its creation in 1995, and only the second relating to the WTO's general agreement on trade in services.