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World of online gambling

A brief history of online gambling

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History of online gambling

Gambling originates back to the year 1856 with land casinos, and gambling itself was practised in the United States mainly in the form of lotteries. Gaming has long been legal in France, Monaco, and much of Continental Europe, and the world of casinos and casino gambling has a romantic, glittering appeal for many.

However, in the 1890s gambling was completely banned and it didn't start making its way back up until 1921 when it was formally legalized in Nevada. With the rise of the internet it was inevitable that gambling would evolve with technology and, naturally, the industry started to explore online options to provide their services. The laws in Britain began to change only in the 1960s and casino gambling is now re-established there, too. Until the 1970s Las Vegas remained the primary location for legal gambling, but more forms of casinos began to be legalized and, even though the casino has long been seen as a world of dinner jackets, evening dresses, and the high roller, these days, since online gambling has become more popular, casinos are more democratic and open to everybody. 

History of online gambling

In the mid-90s online gambling websites started to appear on the internet. As internet access became more popular and expanded to people’s workplaces and private residents, this opened up a whole new realm of internet-based gambling opportunities and it exploded in a way that many industries strive to, but can’t. The year 1994 saw a major change in the gambling industry as the Caribbean nation of Antigua and Barbuda passed the 'Free Trade & Processing Act'. This allowed licenses to be granted to certain companies applying to open an online casino and U.S bookmakers to start accepting bets on horse racing and sports by telephone.

The years 1994 to 1995 also saw a second major development in the gaming industry. The first fully functional gambling software was developed and that software company was Microgaming, an Isle of Man-based software provider. In 1995 an online security software company, Cryptologic, was developed, which allowed secure online monetary transactions and, of course, later led to the first online casino being opened.  

There is speculation as to which casino was the first online casino to open. Research shows both 'The Gaming Club Casino' and 'Intertops Casino' came onto the scene between the years 1995 and 1996. The Gaming Club Casino was first opened in the year 1995 in October and was, and still is, powered by the Microgaming software offering a range of casino games and poker games and licensed by the government of Gibraltar. Microgaming also released the very first progressive jackpot slot which they named Cash Splash.

The very first real money wager on casino games took place in 1996, in InterCasino.

The very first real money wager on casino games took place in the year 1996 and is attributed to InterCasino. The casino provided 18 different games and even had access to the National Indian Lottery. Both of these casinos are currently still in operation. Intertops Casino was in fact the very first online sportsbook that the internet had seen. When they first opened their doors to punters they had an office in St John’s on the island of Antigua, where they were able to gain access to their gaming license. Prior to 1996, their business had actually been in operation since 1983 when they offered phone betting services, but today they are still going very strong and it is said that they now offer over 4,000 daily wagers for their avid sports fans and boast extremely satisfied customers in over 180 countries around the world.

Apart from this, the year 1996 also saw another major development in the gambling industry. This development was the establishment of the Kahnawake Gaming Commission, which regulated online gaming activity from the Mohawk Territory of Kahnawake and issued gaming licenses to the world’s online casinos. The key aim was to keep operations of licensed online gaming companies not only fair, but transparent, too.

Throughout the years 1997 to 1998, most online casinos worked on developing improvements to their softwares and tried to refine their online operations to the most highest of standards, whilst in competition with each other. As the internet at the time had slow bandwidth speeds and servers this caused many connectivity issues for players and caused a lot of network drop-outs in the early years of gambling.

However, research shows that the industry still generated $834.5 million in revenue alone. As the online gambling industry gained population, it saw a substantial increase from fifteen websites to two hundred websites in 1997. Estimated revenue for industry rose from $1 billion in 1997 to a staggering $10.9 billion in 2006.  

In the year 1998 Planet Poker became the first ever Internet Poker Room offering multi-player online poker games. Even though Planet Poker are still in operation today, players can only play for play money as all real money operations were ceased in March of 2007. Planet Poker were the first online poker rooms to open their doors. However, they were never really able to capture the online poker market.

Many companies followed in the footsteps on Planet Poker and in 1999 the internet saw the opening of Paradise Poker which was then followed by both Poker Stars and Party Poker in the year 2001. All three of these poker sites operated using a software platform called Proprietary. This saw a massive increase in the quality of the games that were being offered to players over dial-up and in the early broadband internet connections.

Even though Planet Poker was not able to properly grasp this lucrative industry, Party Poker quickly grew to become one of the world’s largest online poker rooms. Succeeding on from this, Party Gaming who was a parent company of Party Poker became one of the very first online gambling companies to actually go public and they were listed on the London Stock Exchange in June of 2005. In terms of the amount of players online in different poker rooms, Party Poker has since been overtaken by both Full Tilt Poker and Poker Stars.

Revenues from online casinos continued to increase, exceeding millions of dollars, and in 1999 the Internet Gambling Prohibition Act was eventually introduced. This new act meant companies were not able to offer their gambling products to any citizens of the United States. The year 1999 also saw multiplayer online gambling which meant players could gamble together whilst being able to chat and interact with each other. Online casinos continued to develop improved software and carried on refining their operations to the present day.

Another Act was passed by the Australian Federal Government in the year 2000. This Act made it illegal for online casinos that were not licensed to operate their services. In 2001 the Australian Government passed the Interactive Gambling Act, which is also known as the IGA. The IGA became very important to protect Australians from any harmful effects of online gambling. In 2009, France set new laws that were to start regulating Internet Gambling and online taxes. The Bidet Minister stated, "Rather than banning 25,000 websites, we'd rather give licenses to those who will respect public and social order". However, under the new legal plans Betting Exchanges were still prohibited.

By the year 2001, the number of people who gambled online rose to an estimated 8 million.

The number of people who gambled online continued to increase by the day and by the year 2001 it rose to an estimated 8 million. In November of 2002 the United States Court of Appeals for the Fifth Circuit made a ruling that the Federal Wire Act was to prohibit the electronic transmission of information regarding sports betting across telecommunication lines and in April 2004 two of the world’s largest search engines, Yahoo and Google, confirmed they were to remove online gambling advertising from their sites. In 2003 Cassava Enterprises set up 888.com after the lucky numbers in Chinese culture and in 2005 online gambling really reached its highest peak yet as Playtech, 888.com and Party Gaming all registered initial public offerings. Also, in 2005 the UK Gambling Act represented Europe's most liberal gambling legislation.

The industry boomed at a staggering rate and it is estimated that 30 million gamblers visited online gambling sites by July 2005. From 2005 onwards there was an uncertain legal climate in online gambling. The World Trade Organisation, in 2005, ruled in favour of Antigua over the United States of America in a dispute that regarded cross border online gambling. In 2006 there were over 2,500 gambling websites and in most recent years this number has probably doubled, even tripled, with the launch of the most up-to-date technology introducing mobile casinos

The new phenomena of online gambling has revolutionized gambling forever. However, it has also brought concerns about how the law is to correctly deal with online gambling. Also, in 2006 the House of Representatives and Senate passed the Unlawful Internet Gambling Enforcement Act which made transactions from banks or similar institutions to online gambling sites illegal. Credit cards, e-checks, money orders, wire transfers and Bitcoin is where gambling money online originates from. Gamblers are able to use these forms of payment methods in order to upload their money to an online casino and they can then make bets or play the games they want.  Cashing out generally comes to the same method of deposit and without these methods of payment gambling online just wouldn’t be viable. 

Many online gambling companies that were publicly listed closed their doors to residents of the United States. This was mainly down to the uncertainty that surrounded the legality of offering offshore gambling services after the passing of the Unlawful Internet Gambling Enforcement Act, a last minute addition to the Safe Port Act. 

In 2008, South Africa and Italy both joined the very long list of countries that introduced the legislation to not only regulate, but to also endorse online gambling as a legal form of adult entertainment. And, most recently the European Union actually ruled in favour of online gambling companies according to their restraint of trade rules. This ruling permitted all EU companies to continue providing their online gambling services to all member states of the European Union. Now there are many jurisdictions within Europe that offer online gambling licensing services which include the United Kingdom, Malta, Gibraltar, and the Isle of Man. This is alongside licensing locations like Canada and the Caribbean.

In the most recent years, namely 2010, PartyGaming Casino merged with BWIN Casino, which then formed the world’s largest publicly traded gambling company. Only a year later, in 2011, the United States government shut down three online gambling sites, Full Tilt Poker, Cereus, and Pokerstars for violation of the UIGEA. This did not bode well for the US online gambling industry as a whole.

New technology has since exploded in the lucrative online gambling industry with players receiving some record breaking wins, like when in 2011 a Norwegian student won a staggering €11.7 million playing a Net Entertainment slot machine entitled Mega Fortune slot. The boom of online gambling spread to mobile casinos and it is estimated in 2013 $10 billion was wagered through mobile casinos alone. Finally, online gambling has now even spread to social media sites that now allow social gambling and, even though this may not have quite it off with a lot of casinos, it is estimated that this too will boom over the coming years.

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