Shades of Gray.

• Author: Ledbetter, James
• Position: Legal status of Internet gambling is uncertain, but people keep betting

The legal status of Internet gambling is uncertain, but people keep betting.

Despite the creeping approach of anti-cybergambling legislation and judicial rulings, there remains a formidable appetite in the United States for Internet wagering. No comprehensive statistics are kept on the subject, but industry analysts agree that there are at least 300 gambling sites currently in existence, through which as much as $1 billion a year flows.

The legal status of these sites within the United States is uncertain. Some companies, particularly those that are publicly held, have chosen to play it safe: They don't allow U.S. citizens to bet money on their sites. The San Diego-based company Inland Entertainment, for example, is a vital consultant to four different casino gambling sites - including the popular www.kennyrogerscasino.com and www.goodluckclub.com - but none of them lets U.S. citizens play for money. They monitor U.S. citizenship by checking one's postal code against the billing address of the credit card used to open an account.

Another "legitimate" category of Internet gambling sites revolves around noncasino gambling. Probably the best-known company in this area is YouBet.com, which has offered Internet wagering on horse races since early this year. For residents of 40 states and the District of Columbia, this is a perfectly legal transaction. Like most Internet companies, YouBet.com is not profitable, and so its future is unclear. But the company is on a pace to surpass $2 million a year in revenue. (Interestingly, Rupert Murdoch's News Corp. and John Malone's TCI this summer launched a cable channel called Television Games Network that broadcasts horse racing live. Many media observers believe that the ultimate goal of this project is in-home interactive parimutuel betting.)

Other noncasino gambling Web sites include Bingohour.com, where users buy virtual bingo cards for $1 apiece. A bingo number is announced on the site every seven seconds, and the site claims that its jackpots regularly reach as high as $100,000. There have been no major legal challenges to the site yet, but Bingohour does claim that it "discourages players from playing bingo on the Internet in any country or state where it is illegal to participate in Internet gaming."

Other sites are located abroad but allow U.S. citizens to gamble. They offer a wide array of casino games, typically including slots, blackjack...