UPDATE 3-Antigua wins modest sanctions in U.S. gambling case

(Adds comments from Antigua lawyer)

By Jonathan Lynn

GENEVA, Dec 21 (Reuters) - Antigua and Barbuda won compensation from the United States on Friday in a long-running trade dispute about gambling, but the amount was far lower than the tiny Caribbean nation had been seeking.

A World Trade Organization (WTO) arbitration panel granted Antigua's request to levy trade sanctions on U.S. intellectual property, prompting concern from Washington.

The WTO panel said Antigua was entitled to compensation of $21 million a year from the United States for being shut out of the U.S. online gambling market.

The ruling is only partial consolation for the former British colony, which built up an Internet gambling industry to replace declining tourism revenues, only to find itself shut out of the world's biggest gambling market.

Antigua had demanded $3.44 billion in "cross-retaliation," allowing it to seek damages outside the original services sector. Washington had argued Antigua was entitled to only $500,000 in compensation.

"The United States is pleased that the figure arrived at by the arbitrator is over 100 times lower than Antigua's claim," said Sean Spicer, a spokesman for U.S. Trade Representative Susan Schwab.

Mark Mendel, the lawyer who led the case for Antigua, said: "Antigua doesn't want to negate American intellectual property rights. They don't want to sell ... DVDs and copies of Microsoft Office."