The United States has until April 2006 to comply with a ruling about US restrictions on cross-border gaming on the Internet, the World Trade Organization announced.
In an arbitration decision, the global trade referee set the "reasonable period of time" for Washington to adapt its legislation in line with the ruling, which was issued in April this year after the tiny Caribbean state of Antigua and Barbuda brought the US before the 148-nation WTO.
"The United States has already announced its intention to comply with the WTO findings," said Neena Moorjani, a spokeswoman for the US Trade Representative, in a statement.
"In order to implement the findings, all we need to do is clarify one narrow issue concerning Internet gambling on horse racing."
"This does not involve weakening US restrictions on Internet gambling," she added.
Antigua argued in the complaint it launched in March 2003 that US prohibitions were harming its online gaming business, which is aimed at reducing the island's economic dependence on tourism.
Antigua, with a population of about 68,000, is a centre for offshore Internet gaming operations, attracting large numbers of US residents to its virtual casino-style games and betting services.
US officials contended Internet gambling is illegal if it involves activity on US soil, and have vowed to prosecute those involved in the practice.
Both sides claimed victory in the dispute.
In its ruling, the WTO accepted that prohibitions in some US states on cross-border gaming were valid and agreed with Washington's argument that some federal laws could "protect public morals or maintain public order."
However, the appeals panel ruled that the United States had not been able to show that US laws on horse-racing bets were applied equitably to foreign and domestic online betting suppliers, a key condition of global trade rules.
Antigua has said it expects changes in US rules to unlock opportunities to advertise online gaming products on US Internet sites or media without the threat of legal action by authorities.