The History of Online Gambling
From the '90s to today...
Online gambling websites first appeared on the internet in the mid 1990s.
In 1994, the government of the Caribbean nation of Antigua and Barbuda passed the Free Trade & Processing act which legislated to allow licenses to be granted to companies that applied to open online casinos.
That same year, the first online gambling software provider was founded - Microgaming. To this day, Microgaming still runs popular software that many online gambling sites use to power their casinos and poker rooms.
The First Online Casino
There's a little conjecture about which was in fact the first online casino to accept wagers over the internet. Most other websites seem to claim that InterCasino was the first, in 1996.
But our research shows that it was in fact Microgaming's Gaming Club that opened first, in October 1995. The Gaming Club still offers Microgaming's casino and poker software and is licensed by the government of Gibraltar.
The Kahanawake Gaming Commission was also established in 1996 in Canada. It controls and regulates online gaming activity from the Mohawk Territory of Kahnawake and issues gaming licenses to many of the world's online casinos and poker rooms, aiming to keep the operations of licensed online gambling companies fair and transparent.
Throughout 1997 and 1998 online casinos continued to develop improved software and refine their operations. Due to the slower bandwidth speeds and servers of the time, there were many connectivity issues and network dropouts in the early days of online gambling, however business research and consulting firm, Frost & Sullivan, reported that the industry still generated $834.5 million in revenue in 1998 alone.
The First Online Sportsbook
Intertops was the internet's first online sportsbook, opening their virtual doors to sports punters in 1996, with an office in St Johns, on the island of Antigua, where they possess a gaming license.
Their business had been around since 1983 offering phone betting services prior to 1996, and they are still going strong today - offering over 4000 daily wagers for sports fans and boasting satisfied customers in 180 countries.
The First Online Poker Rooms
Planet Poker became the first site to offer multi-player online poker games on January 1 1998. They are still operating, but only for play money games, having ceased real money operations in March 2007. Although they were the first poker room to open, they never really captured the online poker market.
Paradise Poker opened in 1999, and was followed by Party Poker and PokerStars in 2001. These three poker rooms used their proprietary software platforms to dramatically increase the quality of games able to be played over dial-up and early broadband internet connections.
Party Poker quickly grew to become the world's largest online poker room, and it's parent company, Party Gaming was one of the first online gambling companies to go public, listing on the London Stock Exchange in June 2005.
An Uncertain Legal Climate
In 2005, the World Trade Organisation ruled in favor of Antigua over the USA in a dispute regarding cross border online gambling.
Then in 2006, all publicly listed online gambling companies decided to close their doors to residents of the United States. This was due to uncertainty regarding the legality of offering offshore gambling services after the passing of the Unlawful Internet Gambling Enforcement Act, as a last minute addition to the Safe Port Act.
However, after studying the wording of the UIGEA, many lawyers advised that online gambling was still legal in all but a few US states, hence the majority of gaming companies still accept players from the USA.
To this day no online poker room or casino has been charged with any crime relating to gambling by United States residents and within the USA, political support is growing for the regulation and taxation of online gambling.
The Trend Toward the Regulation of Online Gambling
Recently, the European Union has ruled in favor of online gambling companies according to their restraint of trade rules, permitting European companies to continue offering online gambling to all member states of the EU. And many jurisdictions within Europe, such as the UK, Malta, Gibraltar and the Isle of Man offer online gambling licensing services, along with the long standing licensing locations of Canada and the Caribbean.
There are now also many publicy listed online gambling companies, including Party Gaming, 888 Holdings, SportingBet, Bwin, Playtech, Ladbrokes, William Hill, Boss Media and Cryptologic.
In 2008, South Africa and Italy joined the long list of countries to introduce legislation to regulate and endorse online gambling as a perfectly legal form of adult entertainment.