Peter Mendelson, the EU Trade Commissioner, was on Capitol Hill yesterday, lobbying US lawmakers to change the current law and regulate Internet gambing instead of going through a costly compensation process with dozens of members of the WTO.

What we need to see is a change in U.S. legislation that removes that discrimination against EU operators," EU Trade Commissioner Peter Mandelson told reporters before heading to Capitol Hill to discuss the issue with U.S. lawmakers.

"It's not in the interest of American consumers to have good responsible competitors in this market excluded by regulatory mechanisms."

EU-based gambling firms have climbed onto the case brought by Antigua and urged Mandelson to seek as much as $100 billion in compensation for being shut out of the U.S. market.

"When a member of the WTO defaults on its commitments, compensation is due. That's the case of online gambling," Mandelson said.

"We're in talks about the magnitude of that compensation. I think what we're asking for is reasonable and realistic. The numbers aren't quite as large as has been advertised, but they need to be substantial."

The way the United States would pay compensation would be to open up other service sectors to more foreign competition, said Sallie James, a trade policy specialist at the Cato Institute who has been following the case.

Some possible options would be opening the U.S. insurance market by removing certain state restrictions or allowing some foreign ownership of airlines, both of which are very politically sensitive, James said.