Regulators fear the trade could be used for money laundering

The move comes amid a government crackdown on internet casinos.

Federal authorities are using 1961 legislation designed to counter phone-based horserace betting in an attempt to staunch the massive trade.

Adverts for the casinos, most of which are outside the US and therefore pose an enforcement problem, "aid and abet" the business, the US says.

Yahoo's decision will mean Microsoft's MSN service is also free from online casino advertising, since it outsources ad sales to a Yahoo subsidiary, Overture.

Yahoo will still carry the ads on its sites in 14 countries outside the US.

But Google says it will be dropping the adverts altogether.

Trade troubles

Analysts say the desire to crack down on online gambling stems from a wish to control a trade which US regulators say can be used for money laundering and fraud - as well as a temptation for under-age gamblers to run up debts on parents' credit cards.

A much more recent law than the 1961 Wire Communications Act seeks to make it illegal to pay for internet bets using a credit card.

The crackdown has already led the US into a World Trade Organisation row with the Caribbean state of Antigua and Barbuda.

About 3,000 of the twin island state's 60,000 people work in the industry, and its government says the US ban is a restraint on trade and is designed solely to protect the US's own huge gambling business.