History Of Online Casinos
Where there are people, there are games of chance
People have been playing games for hundreds of thousands of years, with the earliest games of chance dating back to some of the oldest civilizations on record. Over the years these early games have evolved and slowly become more complex as our society created more sophisticated technologies.
One of the biggest advancements for gaming was the opening of the first casino in the 1600s. The concept took a while to catch on, but other venues slowly opened up all over the world, making games of chance a mainstream pastime. While there were many more advancements over the next few centuries, it wasn’t until the World Wide Web (Internet) was made available to the public in 1991 that gaming saw another innovative invention that would change everything.
The Beginning of Online Casinos
Online casinos can trace their origins back to the early 1990s when the World Wide Web first went public. The Internet brought the ability to link computers together regardless of the distance. This innovation opened up the door for new types of media and entertainment that had previously been impossible.
Who first launched an actual online casino is up for debate, but there are only a handful of possibilities. In 1994, the government of a small Caribbean nation—Antigua and Barbuda—implemented the Free Trade and Processing Act, allowing them to grant licenses to companies interested in establishing online gaming services.
Later that year on the Isle of Man—an island located in the Irish Sea between Great Britain and Ireland—a software company called Microgaming formed, and the small group quickly moved to take advantage of the new legislation, allegedly creating the first fully functioning online casino called The Gaming Club. The features were basic, and there was very little variety in the games, but The Gaming Club was still a hit with players. Being able to play games of chance that were formerly confined to traditional brick and mortar casinos proved to be a significant selling point, and other companies started making moves to take advantage of the new form of gaming.
Around the same time, a community of Mohawk people based in Canada formed the Kahnawake Gaming Commission with the sole purpose of issuing gaming licenses. It isn’t entirely clear if this group predated Antigua and Barbuda, but the formation of the Kahnawake Gaming Commission coincided with the appearance of several online casinos, and they are sometimes listed as the first to issue licenses for online gaming.
CryptoLogic is the other potential claimant to creating the first online casino. They specialized in real money transactions over the Internet and moved to combine their product with an online casino of their own. CryptoLogic revolutionized the way money transactions were conducted online and allowed players to use real cash for the first time. The fruits of their labors, InterCasino, officially launched in 1996 and is the other possible claimant to the title of first online casino. While there is no way to really prove who was first, with the passage of time and the often-dubious claims surrounding the online gaming industry, InterCasino and The Gaming Club are, without a doubt, the oldest online casinos operating today.
The Start of a Billion Dollar Industry
Following the success of early online casinos, the online gaming industry saw rapid growth, and by the end of 1996, there were more than a dozen internet gaming sites in operation. By the end of 1997, only a year later, there were a few hundred with a combined annual revenue close to the $1 billion mark.
The next milestone was when the first online poker room launched, founded by poker pro Mike Caro. Planet Poker dealt the first virtual hand of Texas Hold’em on January 1, 1998. Planet Poker may have been the first, but they failed to make an impact, and it didn’t take long for them to be eclipsed by the competition.
The following year, Paradise Poker, based out of Costa Rica, launched and established itself as the industry leader for online poker games. In addition to Hold’em, they also offered Omaha Poker, Seven Card Stud and improved on security and software features.
The next few years saw even more online casinos emerge and the field became extremely competitive, forcing companies to think outside the box to attract customers and distinguish themselves from other operators. Swedish developer NetEnt was at the forefront, offering slots, progressive jackpots, live dealer games, branded games and a variety of table and card games. Bonuses and multiplayer games were added to the mix around 1999 and due to their popularity, quickly became a standard at most online casinos.
Regulations and Bans Come into Force
The online gaming industry started to face significant resistance from politicians only a few years after its inception, and many countries moved to outlaw the practice. One of the most famous attempts was made in the U.S. Senate, with the Internet Gambling Prohibition Act; if passed it would have banned internet gaming and effectively cut off the entire American market.
While the bill ultimately failed in the U.S, politicians all around the world started looking at ways to regulate and control the industry. Russia introduced regulations in 2006 to prohibit any form of online gaming; while Poland made sure online gaming is only available on sites with a Polish license. Several of the most lucrative markets, such as the U.K., Australia and Canada, chose to implement regulations to help consumers, and make it easier to track transactions by lowering the number of overseas-owned websites that could be accessed.
By 2001, the industry had increased its player base to over 8 million, and despite the continuing legal challenges, online casinos would continue to see massive growth. The rise of mobile devices made it necessary for companies to make their games compatible with phones. This feature proved to be another hit, and as phone technology has improved, so has the online gaming features that are mobile-friendly.
The next big hit to online gaming came in 2006, when the United States Senate passed the Unlawful Internet Gambling Enforcement Act. While online gaming wasn’t strictly outlawed, it became illegal for U.S.-based players to deposit and withdraw funds to an online casino. Many local sites were forced to shut down or close their product to U.S. players.
Several poker-based sites continued operating for a few years, but in 2011 the United States Government took another swing at the online gaming industry and seized the websites in an event called ‘Black Friday’ among the poker community.
Modern Online Casinos
Despite the loss of the U.S. market and crackdowns in a lot of other countries, the annual revenue for online gaming was estimated to be $21 billion in 2008. The rest of 2008 saw another significant milestone when a progressive slot jackpot reached a new all-time high of $5.5 million. Only a few years later, a player won an $11.7 million progressive prize on NetEnt’s Mega Fortune slot.
Bitcoin entered the game in 2014 and provided another fast payment method without the oversight of the major banks. Another huge step forward came the following year with the launch of a Virtual Reality headset which plunged players into a virtual casino. By using a VR headset and compatible VR iGambling platform, VR casinos offer all the experiences of being in a traditional brick and mortar venue.
Only two years later, in 2018, the bar was raised again, when the world’s first-ever 100% artificial intelligence-built online casino was launched. While there haven’t been any significant technological advancements in the last few years, online casinos all around the world continue to update and improve on their product, and it’s only a matter of time before someone creates the next big thing for online gaming.
Online Casinos and the Future
Since the early days, the online gaming industry has hit many milestones with new games, features and unprecedented growth in player numbers. By 2024, the whole sector is being predicted to be worth close to $100 billion. Restrictions are also starting to ease, and many countries that previously outlawed online casinos are beginning to allow their citizens to engage with the sites again.
Along with the easing of restrictions, software developers and other operators are constantly creating innovative features to attract players. Virtual reality is still relatively new, but many online casinos have begun to look at the technology for possible implementation. Regardless of what direction the industry takes, it’s clear, online casinos are here to stay
Note: This article tells the colorful, rich and turbulent history of online casinos. However, it should be noted, it is for reference only, and not directly related to, or a reflection of, Chumba Casino, its products or games.