The tiny Caribbean nation of Antigua & Barbuda is escalating its battle with the U.S. over online gambling by trying to convince China and the European Union to support it bid to impose trade sanctions on Washington.

Antigua & Barbuda, home to many gambling Internet sites, said Friday it was talking to China and the E.U. about imposing sanctions on the U.S., which last year stepped up its long campaign against online gambling by passing a law that makes it illegal for financial institutions to process gambling transactions.

A source close to the Antiguan government said China was likely to side with Antigua & Barbuda, in part as a retaliatory measure. The U.S. has frequently turned to the WTO to pressure China to live up to its trade commitments to honor U.S. patents, as well as music, movie, software, and other copyrights.

The E.U. has also historically sided with small nations that have won trade rulings at the WTO.

The WTO in April ruled the U.S. position on online gambling violated the General Agreement on Trades in Services (GATS) treaty (see The Return of Online Wagering?). The WTO said clamping down on offshore Internet sites that accept bets from U.S gamblers amounted to protectionism because it is legal in the U.S. for gamblers to place bets at casinos, horse racing tracks and sports books.

The U.S. then stunned the WTO and the Antiguan government by announcing it would no longer abide by the gambling services segment of the GATS treaty.

“This astounding and unprecedented action by the US opens up a whole new chapter in the WTO jurisprudence, which runs contrary to the object and purpose of the GATS,” Antigua’s minister of finance and the economy, Dr. Errol Cort, said in a statement.

It also left Antigua with the unenviable task of imposing sanctions on the U.S. No doubt that the absence of Antiguas 81,000 consumers exiting the U.S. marketplace is sure to send shivers down the spines of Washington.

I can't help but think that the folks at Harrahs were a little concerned about the possibility of legendary poker players being handcuffed and paraded out in front of media from around the world. What a PR nightmare that would be! "How do we play it safe", somebody might have asked. Moving up the schedule might be one way!

The UIGEA gave a grace period of 270 days for banks and websites to comply with its new ban on sending money to offshore gaming sites. That grace period will expire in late July. The WSOP's main event is scheduled to commence on July 17th.

Last year the main event's final table was played on August 10th.