CYBERSPACE CRAPSHOOT

Three months ago, a Missouri man going by the name Matthew Cunningham wagered $100 in a slot-machine tournament held on a Website called Global Casino. He lost. That, for Global Casino, was the good news. The bad news was that "Cunningham" was employed by the office of Missouri attorney general Jeremiah ("Jay") Nixon as part of a sting operation. Last Friday, in the first case ever against an active Internet gambling concern, a federal-circuit-court judge granted Nixon's request for a permanent injunction barring Global Casino's parent company, Interactive Gaming & Communications (I.G.C.) of Blue Bell, Pa., from taking any more bets from Missouri residents.

In the ongoing quest for an Internet bogeyman, pornography still gets the most ink, but gambling is where the action will be. Online betting--primarily through Websites that let you wager on sports events, enter lotteries and play casino games--is still in its infancy. Between $100 million and $200 million will be gambled online this year worldwide, says Whittier Law School professor and gaming-industry expert I. Nelson Rose. That's just a tiny portion of the national habit, of course. Americans legally hazarded an astonishing half a trillion dollars in 1995, earning the gaming industry profits of $44.4 billion--more than the net revenue from movies, music and sports entertainment combined. But as the Web becomes ubiquitous, online gambling will grab an ever larger slice of this multibillion-dollar pie. "I get two calls a day," says Rose, "one from the media, the other from someone who wants to set up shop on the Net. There's a feeling that they're getting in on the ground floor of the next TV."

Or, in the case of law enforcement, trying to stop the elevator before it's too late. Neither the gaming companies nor the prosecutors know how existing law will apply to cyberspace. Two years ago, Minnesota attorney general Hubert Humphrey III filed suit against Granite Gate Resorts, based in Las Vegas, merely for advertising its upcoming Web-based sports-betting service, WagerNet, to Minnesotans.

Now Nixon--who plans to run for the U.S. Senate in 1998--has taken the fight a step further, contending that Global Casino's operators broke the law by letting a Missouri citizen wager on their site, even though the computers that take the bets are on the Caribbean island of Grenada. No dice, says Lawrence Hirsch, general counsel for I.G.C. "There is no law on the books anyplace," he says flatly, "that prohibits us from doing what we do."

That's precisely what has Nixon fighting mad. He contrasts today's anything-goes Web gambling joints with the tightly regulated riverboat casinos plying their trade on the Missouri and Mississippi rivers. "Any 12-year-old with a credit card can play blackjack on the Internet," he says. "We don't know who owns these companies, what the odds are, whether winners will ever collect. We know nothing."