SOURCE: Bloomberg

Antigua and Barbuda said it's entitled to $3.44 billion in compensation from the U.S. in a World Trade Organization dispute over an American ban on Internet gambling.

The compensation would be in the form of Antigua withdrawing intellectual property protection for U.S. trademarks, patents and industrial designs, the government said in a statement.

``We feel we have no other choice in the matter, we have fought long and hard for fair access to the U.S. market and have won at every stage of the WTO process,'' said Errol Cort, Antigua's finance minister in an e-mailed statement. ``This industry has been and can be regulated,'' he said, adding that the dispute isn't a moral issue, as claimed by the U.S.

After losing an appeal against earlier WTO decisions which found the U.S. ban illegal, the U.S. moved May 4 to ``clarify'' its commitments to the Geneva-based trade arbiter, saying it ``never intended'' to open its market to offshore Internet gambling when it made pledges on joining the WTO in 1994.

The 27-nation European Union increased the stakes in the case yesterday, saying it will also seek U.S. compensation for any changes in U.S. commitments.

Any government that says its interests are harmed by a change to pledges opening borders at the WTO is entitled to request negotiations with the U.S.

Antigua, the smallest nation to ever take a case at the WTO, says it's entitled to compensation for its losses. The government estimates that Americans spend $10 billion a year in online bets. The country with a population of 80,000 developed Internet gambling to boost a tourism-dependent economy after several hurricanes in the 1990s.

The U.S. Congress, then controlled by Republicans, passed legislation last September that curbs financial payments from banks to offshore Internet casinos that are illegal under U.S. law. The law was aimed at shutting down the payment system for Internet gambling and caused betting sites such as SportingBet Plc to cease U.S. operations or sell them for nominal amounts.