Sometime in the Paleolithic era, somewhere between 3 million years ago when prehistoric people first developed basic stone tools and 5,000 years ago when they created the first written language, early humans created something really important. Gambling. From the first appearance of a 6-sided die in Mesopotamia over 5,000 years ago to that fateful day in October of 1994 when the Liechtenstein International Lottery first allowed tickets to be bought online, gambling has come a long way. However, it could be said that nothing has revolutionized gambling like online casinos. Here is a brief history of online casinos.
1995 – The Beginning of Internet Gambling
As what started somewhere between a cash-grab and a PR stunt, the International Lottery of Liechtenstein decided to create a website in October 1995 and open their lottery game to the world. In this 1995 article from the New York Times, America’s newspaper of record tries to figure out exactly what was happening with this online lottery.
At the time, there were an estimated 50 million people online, a far cry from the 4.5 billion people who are online today. In the middle of the article the author, Erik Ipsen, ponders a question that would ultimately be answered to the tune of billions of dollars a year. “The fact is,” he says, “that no one yet knows what propensity [people online] have for gambling.”
1994 – 1996 – Laying the Groundwork for the First Online Casino
A year before the Lichtenstein Lotto started selling tickets on the web, the groundwork was being laid for the first-ever online casino to open. Three events around the world converged that allowed for this first online casino to come about.
In the tiny Caribbean nation of Antigua and Barbuda, 1994 brought the Fair Trade & Processing Act which allowed companies to apply for a license to operate an online casino. Around the same time, on another small island, the Isle of Mann, between Great Britain and Ireland, a company called Microgaming created the first computer gambling software. Finally, another company called CryptoLogic develops a program that allows for secure financial transactions on the internet.
With the Fair Trade & Processing Act, Microgaming, and CryptoLogic coming together, a bookmaker from Ohio named Billy Scott was able to go down to Antigua and Barbuda and open InterCasino, the earliest online casino.
1997 – 1999 – The Growth and Expansion of Online Casinos
Once InterCasino opened in 1996, the floodgates were opened for all manners of online gambling institutions to follow suit. By the end of 1997, just 1 year after the first internet casino was born, there were over 200 online casino sites. The following year, the industry grew even more and reports showed that revenue from online gambling increased to over $800 million.
At the end of the decade, online gambling companies created two more innovations that would shape the way we play in online casinos today. In 1997, the first-ever online poker room was created and on New Year’s Day, 1998, Planet Poker was launched as the first real money online poker site. In 1999, the technology was created that allowed for multiplayer online gambling. This allowed players to play with, against, and chat with real people from around the globe.
2000 – 2006 – Explosion and Regulation
Before the turn of the century, online gambling and casinos largely operated unchecked around the world. In 1999, the U.S. government tried to pass a bill called The Internet Gambling Prohibition Act but it did not pass. A year later, Australia passed an early internet casino regulation called the Interactive Gambling Moratorium Act.
Despite this early regulation, the industry continued to soar. By 2001 it was estimated that over 8 million people around the world had participated in some form of online gambling. In 2002, the industry was cruising along, setting new financial highs. This year, online gambling became a $4.5 billion industry.
More legal issues would follow though, especially in the United States. In 2003, the U.S. DOJ told media outlets that gambling site advertising was now illegal. Even after they were sued by Antigua and Barbuda and ruled against by the WTO, the U.S. government still fined a company $7.2 million in 2006 for continuing to run online gambling ads. States like New Jersey even prosecuted companies that facilitated Americans using online casinos. This all culminated in the Unlawful Internet Gambling Enforcement Act of 2006 which effectively outlawed online gambling in the U.S.
2007 – 2011 – World Gambling Grows; U.S. Continues to Fight
“Starting in 2007, when the UK legalized online gambling, countries around Europe started to realize what a financial windfall online betting could be,” says Ann Holmes of Online Casino Gems. “Online casinos, poker sites and sportsbooks flourished around the world while the U.S. continued to fight progress. Over the course of these 5 years, the U.S. did seemingly everything in their power to stop online gambling. In these years, Federal and State governments seized gambling-related domain names, sent a gambling site CEO to prison on charges of racketeering, and indicted executives from sites like PokerStars and Full Tilt Poker.”
2012 – Present – Legalization and Technology
Beginning in 2012, the U.S. started scaling back its crusade against online casinos and gambling. While the occasional issue would still pop up, like New York State outlawing Daily Fantasy Sports sites in 2016, online gambling started becoming commonplace around the country. Now, online gambling is legal in states like Delaware, Nevada, New Jersey, and Pennsylvania, with more set to join soon.
At least part of the reason the U.S. gave up the fight was that technology got to a place that not only made online casinos safer and more secure but easier to access and more fun as well. With mobile devices taking off, internet speed and reliability improvements and gaming software reaching new heights, the wave of online gambling was too much to turn back.
In 2020, we are in a place where online casinos are everywhere. They are easy to access and the majority are safe and reliable. The future looks bright for online casinos. New technologies such as virtual reality, blockchain cryptocurrency like Bitcoin, and facial recognition are continuing to drive the industry forward. While there will always be challenges, online casinos should only continue to get better and more legal around the world as we go into the next decade.
