UPDATE 2-EU may challenge U.S. online gambling law-McCreevy

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By Huw Jones

BRUSSELS, Jan 30 (Reuters) - U.S. restrictions on online gambling may be challenged by the European Union, the bloc's top financial regulator said on Tuesday.

The legality of Internet gambling in the United States was ambiguous for many years, but it was effectively banned last October when U.S. President George W. Bush signed legislation outlawing financial transactions for gaming.

Several British online gambling firms were forced out of the U.S. market as a result.

"In my view it is probably a restrictive practice and we might take it up in another fora," EU Internal Market Commissioner Charlie McCreevy told the European Parliament.

The United States was protecting its own gambling industry by stopping foreign companies from entering the online betting sector, McCreevy said.

"It's not my intention to bring forward a harmonised piece of legislation on gambling in the European Union," McCreevy added.

U.S. pressure on the industry continues.

The U.S. Justice Department last week demanded information from some of the world's biggest investment banks as part of the probe into online gambling companies such as Britain's PartyGaming (PRTY.L).

The move was the latest in a U.S. crackdown on online gaming, which began with the arrest of BETonSPORTS' BSS.L Scottish Chief Executive David Carruthers in Texas last July.

McCreevy later told reporters the U.S. rules were a "prima facie" case of protectionism and that the World Trade Organisation was a possible venue for tackling them.

However, due to the WTO's protracted negotiations to secure a new world trade agreement, he would not rush to file a complaint.

"It's not something of major momentum," McCreevy said.

There have been no face-to-face talks about the issue with Peter Mandelson, the EU trade commissioner, McCreevy said.

McCreevy has launched legal actions against several EU countries to tackle obstacles to foreign competition.