History of Online Gambling


12/21/2012
By Maria McCoyGoogle
Online gambling got its start back in the early 1990’s and has been growing ever since. Inn 1994, the government of Antigua and Barbuda was the first to pass legislation to allow companies to operate online casinos on their soil. This began a long tradition that still stands today of sites operating out of foreign and tropical nations. During this time, the company that would go on to lead the casino software industry; Microgaming was formed. You will find almost all top casinos using this software to run their casinos. They have numerous awards for excellence and continue to be an innovator in their business.

Although this ground breaking legislation was passed in 1994, it would take 2 years before we saw our first legal online casino. This would come in the form of InterCasino. There is some debate over who was first. Some say that The Gaming club was first to open its doors in 1995, but there is no real evidence of this. The first sports book to operate online would be the legendary, Intertops. They now offer everything from poker, casino games and sports betting online and remain one of the largest online gambling companies in the world. 

It wouldn’t take long before this trend would take off. In 1996 there were only 15 registered online casinos. By 1997 there would be over 200. I popped my online gambling cherry back in this same time at a small site called Sci-Fi Casino. I remember it like yesterday and can still picture the creepy martian that would introduce itself every time you logged on.

The Canadians would see the interest and possibilities of online gambling and formed the Khanawake Gaming Commission. This is made up of Indian tribes and has become one of the front runners for gaming regulators. Although, they have received some bad press as of late for being associated with gambling sites that have gone out of business and not paid its players. One of the more notable ones is Ultimate Bet.



It wasn’t long after online gambling began to take off that countries tried outlawing it. Australia would introduce the “Interactive Gambling Moratorium Act” which made it illegal to offer online casinos to its residents. The Americans weren’t far behind when they introduced the “Internet Gambling Prohibition Act” in 1999, but this failed to pass.
The Poker Boom

In 1998, Planet Poker would become the first ever online poker room and remains in operation to this day. However, these days it is a subscription based site where you pay a fee each month and play for prizes. Its founder, Roy Cooke has written numerous books on poker and was once considered a top player.

The main players in today’s market were some of the first to open. Poker Stars, Party Poker and Paradise Poker were all part of the first wave of online poker rooms. Numerous sites started popping up, and it was basically a free for all with no regulation and things could get quite messy. Some sites would go on steal player’s money, go out of business among other issues.

Some of the first sites such as Noble Poker and Titan Poker were once stand-alone sites that have gone on to form one of the largest poker networks, Ipoker. I actually played on Noble Poker the very first day it opened. Was the best time I ever had and I’ve never made more money playing poker than back in those days.
Back on topic…

The real Boom came in 2003 when a portly accountant from Tennessee would take the world by storm by winning the Main Event of the WSOP and take home almost $1 million. It was this time we began to see every poker room worth anything advertising on TV. Full Tilt would also become the second largest site at this time by being one of the bigger advertisers.

The boom in poker trickled over to the online casinos and the industry was at an all-time high. Business and life was good for a while. Then the American government would do what they do and ruin everything. In 2006, they passed the UIGEA* which made it illegal to offer online gambling to Americans. This didn’t make it illegal to play online poker or casino games, but it made things very difficult for the operators.

Many sites would snub their nose at the government and continue to offer its services to Americans as there was no real way of enforcing this law. Most sites were located offshore where the U.S. had no jurisdiction so not much could be done. The only real hassle was getting Americans their money. The law made it illegal for banks to accept or process transactions from online gambling companies. There were numerous ways around this and in 2010 was when we found out how they were doing so.

The three main players, Poker Stars, Full Tilt and Ultimate Bet were all indicted by the D.O.J for fraud and other serious charges. Many sites were bribing bankrupt banks to funnel money to American players and others were using payment processors that were set up as fake businesses. Basically these sites were laundering money to get it to the American players.

Poker Stars would go on to pay all American players and remains in good standing. Full Tilt was eventually bought out by Poker Stars after more than a year of being out of business. They are now open again and everyone but Americans have been paid their money. The Americans must deal with the D.O.J. and this will take some time to put it nicely.

Today’s gambling climate



Only a handful of operators are still allowing Americans to play poker and casino games. Most are afraid to lose any hope of being able to let Americans back on their site. Many bills have been put through congress to allow online poker and some states have already begun to pass their own bills. Nevada is poised to be first on the scene and other states such as New Jersey and California aren’t far behind.

Many aspects of online gambling remain up in the air as countries begin to seek their own sources of revenue. Countries such as France and Italy have paved the way for country only sites which only allow players form their specific countries to play on state run sites. Spain, Germany and Australia are looking to do the same.
Online gambling will never go away as it is such a big money maker. In 1998 at its infancy, it’s estimated that online gambling generated over $834 million in revenue**.


Sources: *UIGEA http://www.fdic.gov/news/news/financial/2010/fil10035.html

**Frost and Sullivan http://www.frost.com/prod/servlet/frost-home.pag
 

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