The History of Online Gambling

Online Gambling

The internet has now become a large part of the lives of millions of people all over the world. One of the ways in which this unique medium has influenced us is in regards to online gambling. As soon as the technology became available, a number of casino operators raced to the forefront, bringing us online casinos, sports books, and even poker sites. Of course, this has not been without its ups and downs or unique challenges.

The Beginnings Of Online Gambling:

The very first internet gambling websites started coming online in the middle of the 1990's. The very first act that started this trend was Antigua and Barbuda passing a law entitled the Free Trade and Processing Act. This gave the small Caribbean nation the right to grant licenses to those businesses interested in starting online casinos.

Along with this legislation, an important technology company was formed. Microgaming became known as the first company to develop a truly revolutionary and functional piece of online gaming software. Even now, this company is still in business and considered to be one of the most trusted software providers to the internet gaming industry. Their software currently supports all types of online gaming sites from casinos to poker rooms and everything in between. It is also thought that Microgaming partnered with another company, CryptoLogic, to help create the ability for safe and secure online financial transactions.

Online Gambling's Popularity Explosion:

The next major development in the online gambling world was probably the establishment of the Kahnawake Gaming Commission, in Canada. This was actually a Mohawk Indian tribal commission that was established to issue gaming licenses.

The first online casino was also opened in this same year of 1996. There is some disagreement as to which site was the first. Most sources suggest this was InterCasino. However, a few sources think that GamingClub (built by Microgaming) beat them to the punch, opening in late 1995.

Throughout the late 1990's, the popularity of online gambling began to explode. No matter who you think was the first to make it to the web, by the end of 1996 there were approximately 15 similar sites. By 1997, this has exploded to more than 200 online casinos. Revenues from this surging industry also reached more than $830 million just in 1998.

Next Development – Online Sports Books:

Let's face it, not only do people love to play casino games online, they love to wager on sports. This trend was hard to ignore, which led to the appearance of InterTops, the first online sports book, in 1996. Once people saw the success they had, the flood gates really started opening. New companies were formed to take advantage of this business trend. Additionally, a number of existing bookmaking operations started forming online sites to expand existing operations.

Initially, these websites were giving away large bonuses and free wagers in order to attract new customers and players. The number and variety of promotions became rather amazing and included things like special odds, cash back offers and even tournaments or contests that gave generous prices. The sports wagering industry online eventually matured and the large bonuses and other promotions decreased, although a number of sites still do offer free bets and some form of bonuses.

Another interesting trend in online sports wagering developed around the year 2000. This is when BetFair began. The revolutionary thing about this site is the fact that they made it possible for peer to peer wagering. In other words, players made bets between themselves and the site collected a commission on each wager. This was the forerunner of today's exchange betting, which is quite popular.

Around the year 2002, live betting was started. This allowed players to make wagers on a sporting event while it was actually being played. Live betting has proven to be immensely popular and one of the most exciting new sports wagering option, even today. Over time, the range of sporting events eligible for live betting has expanded exponentially. The latest development has been mobile betting, so players can now even using phones, tablets, or other mobile devices to place their sport bets.

The Rise Of Online Poker:

Planet Poker is generally recognized as being the first online site to offer poker. This started back in the beginning of 1998 and immediately began attracting a large number of potential players. Unfortunately, they were plagued by a number of technical problems and other glitches. Back in these days, a large number of people were still using dial-up internet services, which created a number of speed and downloading issues.

The failure of Planet Poker led to the rise of a number of new poker sites, like Paradise Poker. They were launched in 1999 and based in Costa Rica. The platform and technical systems used were a lot more advanced and led to a more stable site. They also added Seven Card Stud and several types of Omaha games to the traditional Texas Holdem. In 2000, Poker Spot became the first site to offer online tournaments, although they had a lot of payment processing issues which forced closure in 2001.

Party Poker and Poker Stars were established in 2001 and soon became two of the top online poker sites. You probably already know the story, but Party Poker started running online tournaments which offered qualification to live events. Soon, Poker Stars followed and played a large role in the launch of the World Championship of Online Poker. Chris Moneymaker became the first player to win the World Series of Poker (in 2003) through qualification in a $40 online tournament at Poker Stars. This led to another huge increase in the popularity of online poker, with many people now believing it was possible to actually achieve their dreams through an easy qualification event.

The United States & The UIGEA:

Although online poker was hugely popular in the United States, Congressional lawmakers decided to pull the rug out from under players. In 2006, they passed what has become known as the Unlawful Internet Gaming Enforcement Act (UIGEA). This led to a huge amount of confusion regarding the legality of not only internet poker, but also online gambling in general within the US. Many poker and other online gambling sites either were forced to shut down or closed their doors, at least to US players.

The really interesting thing about the UIGEA is the fact that it didn't even make it illegally to gamble online. Instead, it attacked the payment processing companies, making it illegal to process these payments for gambling activities of anyone residing in the US. Unfortunately, this led to a lot of confusion and many sites and online gambling businesses saw this as a big gray area. Many of the major sites decided to stop doing business with US customers, devastating their revenues in a number of cases.

Several sites did try to stick it out and continued accepting US players. These sites included Poker Stars, Full Tilt Poker and Absolute Poker. Sadly, in 2011, the US government cracked down and seized their websites, essentially shutting these three (and other) companies down to anyone residing in the US. This event became known as 'Black Friday' in the online poker community.

Although legal online poker is still a gray area in the US, there is some hope for the future. A number of legislators have begun attempting to reinterpret the legal foundations upon which the UIGEA was based. This has led to several US states beginning to allow online poker again, although with additional regulations. There are also a number of other states that are looking into and / or thinking about allowing online poker, attracted by the revenue it might bring to sagging state coffers.


Although online gambling, especially online poker, has an interesting history, there does seem to be renewed hope for the future. Europe has already recognized internet gambling as the right of every legal adult and it seems as if the US is starting to come around. Perhaps those of us in the US should think about contacting our lawmakers and urging them to vote in such a way that represents our interests.