America’s crackdown on offshore internet gambling companies has been judged illegal by the World Trade Organisation, rekindling hopes that the industry could regain access to what was once its most valuable market.

A three-member WTO compliance panel sided with Antigua and Barbuda in ruling that Washington had failed to change legislation that unfairly targets offshore casinos. The WTO said that Washington could only maintain restrictions on online gambling if the laws are equally applied to American operators offering remote betting on horse racing.

Shares in London-listed gaming stocks rose on the news with Leisure & Gaming PLC up 10 per cent at 19.5p, PartyGaming 4.5 per cent higher at 52.25p and 888 Holdings PLC gaining 2 per cent to 123.5p

Washington has the option of launching an appeal against the WTO finding. A final ruling upholding Antigua’s claims would allow the island nation to seek trade sanctions on the US for its failure to comply.

To avoid the penalties, the US would have to either permit Americans to gamble over foreign-based sites or eliminate exceptions for off-track betting on horses, including over the internet, as permitted under the 1978 Interstate Horseracing Act.

However, analysts have said that it appears unlikely that the US will ease access to offshore online gaming companies.

US lawmakers caught the industry by surprise last year when it passed a bill that made it illegal for banks and credit card companies to settle payments to online gambling sites. George W Bush signed it into law on October 14.

The decision closed off the most lucrative region in a market worth about £8 billion last year. Several British-based gaming groups subsequently sold off or shut down their US operations.

The arrest last year of two British Internet gambling executives while travelling through the US also highlighted the government’s escalation in its battle against the industry.

Peter Dicks, the former chairman of Sportingbet, was detained in New York but released after New York Gov. George Pataki declined to sign a warrant extraditing him to Louisiana, where he was wanted on charges of illegal online gambling.

Former BetOnSports PLC Chief Executive Officer David Carruthers remains under house arrest in the St. Louis area awaiting trial on federal charges from the US attorney’s office based on the 1961 Wire Act.

Antigua filed its case in 2003, contending that US restrictions on internet gambling violated trade commitments the United States made as a member of the WTO.

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