The European Commission has said US laws on internet gambling hamper trade are inconsistent with World Trade Organisation rules.
'It is for the US to decide how best to regulate Internet gambling in its market, but this must be done in a way that fully respects WTO obligations,' EU Trade Commissioner Catherine Ashton said in a statement.
She said a draft Commission report implied that WTO proceedings against the US measures would be justified.
But she added that the issue should be addressed with the US administration with a view to finding a negotiated solution.
