History of Online Casinos – Origins of the Industry
Online gambling has evolved into an annual market worth $35 billion in just 20 years. The industry, which had very humble beginnings, is now extremely sophisticated featuring compatibility with smartphones and tablets, progressive jackpots worth millions of dollars, live help, live dealer gaming, and social gaming.
The online casino gaming industry was born in 1994 when the Caribbean islands of Antigua and Barbuda enacted a law that enabled casino gaming companies to apply for licenses to run online casinos. The credit of developing the first online gambling software platform goes to Microgaming, the world’s biggest supplier of online casino gaming software programs and gaming content.
The very next year, Cryptologic developed protocols of encrypted communication to make financial transactions at online casinos 100% safe and secure. The credit of accepted the first real money bet on online casino games goes to the Cryptologic online casino Intercasino, which offered a portfolio of 18 online casino games in 1996. The same year, the Kahnawake Gaming Commission was born and it continues to grant licenses to online casino gaming operators even today.
The credit of launching Cash Splash, the world’s first progressive jackpot slot, in 1998 goes to Microgaming. In 1998, Planet Poker, the world’s first online poker room, was launched. More than 700 online casinos, which allowed players to wager real money on the games, were launched before the end of 1998.
The Industry Booms
By 2000, the online casino gaming industry was generating more than $2.2 billion in revenue, and US online casino players contributed to over two-thirds of it. The number of gambling jurisdictions shot up in 2001 when UK territories such as Gibraltar, Alderney, and Isle of Man started issuing online casino gaming licenses and regulating online casinos. By now, the online casino gaming community comprised more than 8 million players.
Two years later, in 2003, the famous 888.com, an online casino brand belonging to Cassava Enterprises, was launched. The title and theme of the casino revolved around the Chinese lucky numbers. When 888.com, along with Playtech and PartyGaming, registered initial public offerings, the industry really began booming.
In 2005, the UK passed the most liberal online gambling laws in Europe in the form of the UK Gambling Act. But the very next year, the online gambling industry in the US suffered intensely because of the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA). This law made it illegal for financial institutions such as credit card issuing companies and banks to process funds related to online gambling activities. This forced several online gambling companies and payment processors out of the US border. Despite the problems in the US, the international online gambling company was estimated to be worth $21 billion in 2008, and by 2010, the number of online casinos worldwide had swelled to 865.
The year 2010 saw another important event in the history of online gambling—the merger of two giant online gambling companies, Bwin and PartyGaming. The following year saw a rather heartbreaking event called Black Friday. It was the day on which the US government pulled down the shutters of Full Tilt Poker, PokerStars, and Ultimate Poker for violating the UIGEA. Although the international online gambling industry has recovered from Black Friday and regained its original glory, the US online gaming industry is yet to recover.