History of online gambling

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Audrey MollyAudrey Molly | Päivitetty: 17.05.2020

While the online element is relatively new, the history of gambling is as old as civilization itself. With 6-sided dice going back to ancient Mesopotamia 5,000 years ago and playing cards dating back to 9th Century China, there’s clearly a lot to suggest that people have been fond of playing and gambling with one another throughout the world, for a vast amount of time.

While gambling predates written history, the first land based casino, named Ridotto, started operations in Venice during the 17th Century and offered variations of card and lottery styled games for those who could afford the high stakes. Gambling began to evolve more and more and the lucrative nature of running a casino began to appeal to many around Europe. However, due to religious and societal pressures, heavy regulations were applied in order to stem the adverse effects many believed gambling had on communities. Fast forward to 1895 and a mechanical engineer by the name of Charles Fey, who brought to life the world’s first slot machine, named Liberty Bell.

By 1902 slots were mostly banned in the US, which Fey circumnavigated by altering his slots to offer non-monetary awards. This is why so many slots today still feature lemons, cherries and the like. These were actual prizes that could be won by hitting all 3 reels. It wasn’t until the roaring 1920s of America, where Nevada truly put itself on the map thanks to the state’s legalization of gambling. This would quickly lead to the rise of Las Vegas as we know it today. Las Vegas truly paved the way for other countries to begin to adopt legalization and operation of casinos.

The next major step in the evolution of gambling came in 1994 at the dawn of the Internet and with the now well-known Microgaming being the first developer to produce the first fully online gambling software. The catalyst came from the Free Trade and Processing Act from Antigua and Barbuda, making it possible for foreign potential casinos to apply for gambling licenses.

Soon after the first online wager took place in 1996 at InterCasino, which is still operational to this date. The contention actually lies in which online casino was the first to open its doors. Both Intertops Casino and The Gaming Club Casino can claim to be the first, but unfortunately, there doesn’t appear to be any concrete proof either way. By the end of 1996, there were already 15 different online casinos with their doors open.

In 1997 the number of operational online casinos skyrocketed to over 200.

InterCasino opened its doors with a library of 18 games, along with providing for the National Indian Lottery. Along with claiming the first online wager, InterCasino also set up the first online sportsbook, which was an innovative step from their previous main area of business of offering phone betting since the early 1980s. Things have come a long way for InterCasino, who are now accepting thousands of wagers on a daily basis from all over the world. Having been around since the very beginning and still standing as an industry leader is certainly a badge of honour, as they helped to create an industry that has seen massive growth and stiff competition year on year.

All credit can’t go to InterCasino alone though, as in the background several companies were developing software and platforms to build, support and maintain the casinos and games. Microgaming was at the forefront of developing software platforms and game innovations, such as Cash Splash, the first progressive slot game.

Cryptologic was also a key player in the startup of online gambling, as they provided a secure payment method, which they had developed with the intention of making transactions online easy. It is very much doubtful that online casinos could have existed before this achievement in software design, as one can think of how relied upon online transactional services are today. Another critical aspect was the gambling licensing and regulations that needed to be created in order for online casinos to act as legal entities. As mentioned, Antigua and Barbuda were the first to develop their own license, however, the Kahnawake Gaming Commission from the Mohawk territories soon followed, along with a whole host of other licensing bodies.

Monumental growth was seen in the IGaming industry during the 1990s, as a report in 1998 saw revenues reach an excess of $830 million (Approx. C$1.1 Billion) in that year alone. This massive amount of growth began to feed the industry further, as more development studios and entrepreneurs began seeing the appeal of entering the market for themselves.

This momentum continuously brought in new ideas and innovations, such as Planet Poker setting up the very first online Poker room in 1998, allowing for online multiplayer action with real money. Unfortunately, Planet Poker no longer offers this option, as it discontinued operations in 2007.

Planet Poker opened the doors up for plenty of other Poker providers to try their luck on the market. Most notably of these was Party Poker, which saw great success after being initiated by their parent company Party Gaming. Party Poker was on top of the game for a very long time, even to the point of going public on the London Stock Exchange in 2005. Other competitors, such as PokerStars and Full Tilt Poker, have since taken the crown with larger player bases than Party Poker.

The 1990s saw the birth and imaginable growth of IGaming, but it wasn’t always going to be smooth sailing. In 1999 the US declared the Internet Gambling Prohibition Act, which outlawed any online casino from offering the gambling products to US residents and the country still remains a largely untapped market to this day. The following year of 2000 saw Australia set up the Interactive Gambling Act, which required online casinos operating in the region to attain licensing in order to protect players.

Over the next decade, more and more regions began developing their own legislation for licensing and operation of online casinos. The UK was a big vindicator of establishing this foundation by building up new legislation based upon the creation of the UK Gambling Commission, established in 2007. The UKGC would be in charge of managing licensing, fairness of play, upholding the responsibilities of licensed online casinos, as well as the support of those adversely affected by gambling or suspect business practices. At the time, the UK gambling laws were seen as a shining example of liberal and protective legislation

Already by 2005, there were an estimated 30 million online gamblers worldwide.

In 2007 A survey conducted in Canada showed that 2.3% of Canadians had participated in online gambling in one way or another. Canada already had some big-name casinos around, such as PlayNow.com, which was initiated by the British Columbia Lottery Corporation back in 2004. While Canada has had legislation that prohibits non-governmental bodies from offering gambling services to Canadians, there are still an estimated 1,200 - 1,400 offshore online gaming sites that offer services to Canadians. While Canada did prosecute Starnet Communications International, who received a fine as a result, this is the only instance of such legal actions taking place within Canada.

In 2006 gambling sites were opening thick and fast with over 2,500 in operation. This was amidst Antigua and Barbuda’s legislative battle with the US over the US government’s alleged attempts to impede online gambling. The complaint was filed with the World Trade Organisation (WTO), who ruled in Antigua and Barbuda’s favour. The US did little to action this decision and as such the WTO received a complaint from Angitua and Barbuda, which saw the authorization of Antigua and Barbuda’s monetization of US intellectual property, as compensation.

It was estimated in 2008 that the industry was grossing $21 billion (Approx C$28 billion) in revenues across the globe and it just kept rising. Already established industry pillars such as Netent, Microgaming, as well as newcomers like 888 (Cassava Enterprises) and Playtech, were all experiencing great successes, but also an ever-growing mountain of competition. This competition also lead to innovations in development, as each game provider and casino was continuously expanding upon distinct features and priorities, in order to separate them from the rest or to simply keep up with the trends. For instance, downloadable client versions of games saw a decline as browser-based technologies for instant play became an industry standard.

Graphics, animations, sounds and mechanics have also come a long way for slot games. Many game providers have started to focus more on bringing in talented artists, along with injecting higher production values in order to stand apart from the thousands of casino games available. Advances in computing and software have opened up a lot of opportunities for developers.

Many countries have been steadily moving towards loosening their gambling regulations, providing affirmation for online gambling being a legal and legitimate form of entertainment for adults. Italy and South Africa made the move in 2008 and even the European Union, as a whole, ruled that EU based gambling companies remain permitted to provide their services to all member states. The main hotspots in the EU remain the United Kingdom, Isle of Man, Malta and Gibraltar. However, it’s important to keep in mind that legislation changes a lot between each region, meaning casinos often have to adapt to changing climates.

The same can not be said for the United States though, as legislation has become tighter for non-governmental gambling agencies. 2011 saw the US government close down Cereus, Full Tilt Poker and PokerStars, citing violations of the UIGEA. This has therefore left the US a largely untapped market for foreign gambling companies.

Despite legislative and regional restrictions, the IGaming industry has been booming year on year and has continuously been setting records, such as an astonishing record-breaking €18.9 million (Approx C$27.8 million) progressive jackpot win in 2018. Innovations are also coming in thick and fast with the integration of cryptocurrencies, social media gaming and even virtual reality. While gambling has been around since civilization itself and from the looks of things it only seems to be growing into a more diverse and vibrant form of adult entertainment.

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