The history of online casino begins at 1994 was the year that the foundation was set, allowing online casino to take root and flourish. The government of Antigua Barbuda passed the Free Trade and Processing Zone Act, 1994. Today, online casinos operate under licenses granted through this piece of legislation. Microgaming was founded during the same year and is still one of the industry’s largest software developers and suppliers for online casinos.
In 1995, CryptoLogic was founded, creating a series of encrypted communication protocols, allowing transactions to be conducted securely and quickly. Starnet Communications was also created to develop and license internet gambling websites and technology. Offline subsidiaries are created to get around legal barriers and carry out the e-commerce needed.
The Kahnawake Gaming Commission was established in Canada in 1996. The Kahnawake Gaming Law was created to allowing regulating of online casinos in the area. Boss Media also developed a system for online casinos to operate, which is still in use. Microgaming also sold off all of its casino operations during the year and began exclusively developing technology for online casinos to use. Cryptologic further entrenched itself in the industry by developing the first E-cash and gaming application, also completing its own gaming software later the same year. WagerLogic, CryptoLogic’s subsidiary, completed a license for the first time. Most importantly, InterCasino went online as the first online casino to accept real money wagers.
Over the next few years, Microgaming launches Cash Splash, which became the Internet’s first progressive jackpot slot game. Senator Jon Kyl, a Republican from Arizona, tried to pass a bill in Congress called the Internet Gambling Prohibition Act, designed to make it illegal for companies to offer gambling services online to any US citizen. The bill failed. The same year it was reported that the online gaming industry generated over $800 million in revenue.
In 1999, Senator Jon Jyl reintroduced a revised version of his Gambling Prohibition Act. The bill failed to pass again. Meanwhile, Microgaming made a deal with the auditing firm PriceWaterhouseCoopers to review and make reports on casino payouts. The Australian government also licensed its first casino online, called Lasseter’s. Other Australian states quickly began releasing legislation and licensing for casinos after Lasseter’s. Also in 1999, Boss Media’s shares began quoting on the OM Stockholm Exchange’s O-List. During this year about 700 casinos were taking real money bets online. 1999 was a big year for Boss Media as they also released gaming software that allowed multi-player functions, letting many people play the same game at once while chatting with each other. This was a huge development in the online casino industry.
Republican Senator Bob Goodlatte introduced a brand new Internet Gambling Prohibition Act in 2000 to the United States House of Representatives. For the third time, the bill failed to pass. Also that year CryptoLogic released its annual report showing that 680,000 people used their service since 1996 to send money to casinos online. Two sovereign territories of the United Kingdom began offer sports betting licenses. Microgaming released three more progressive online games and the South African company Sun International Hotels Lmt. signed a licensing agreement with Boss Media, allowing them to use their online casino software. That was Boss’ first agreement with a real-world casino, showing that the industry was gaining a huge footing and growing in size. Also during the year, CryptoLogic began listing on the Nasdaq as CRYP.
In 2001, a report showed that 8 million people play online casinos for real money. Very importantly, Australia passed legislation in 2001 making it illegal for any casino online to offer services to Australian residents. At the same time, Nevada passed a bill that allowed online casinos with licenses to operate out of the state. In September, an online casino player in the United States won about $414,000 playing a slot game at the Sands of the Caribbean casino. The marked the largest Internet progressive jackpot won, making it a huge occasion in the industry. This showed that the business of casinos operating online was legitimate and had the potential for big payoffs as in traditional casinos. At the end of the year the Gambling Review Board was formed in the U.K Casino.
In 2002, an important move was begun in the United States. Republican Bob Goodlatte sponsored a bill updating the Wire Act, which bans telephone wagers. The update allowed the law to cover Internet betting, with online casinos specifically in mind. The bill was passed by the House Judiciary subcommittee and moved to the full Judiciary Committee. An online player that year won the first $1 million plus jackpot, winning $1,594,649 at Captain Cooks Casino.
In 2003, the United States House of Representatives passed a bill making it illegal for any payment processing company to facilitate online gambling transactions. This law covers credit cards as well as wire transfers and is fought by banks who say they can’t be responsible and have little way of knowing the nature of all transactions.
Two years later another player wins an enormous jackpot–$1,966,000 at the Carnival Casino. One year later, Italy became the first country in Europe to ban all its citizens from gaining access to casinos not licensed by Italy.
The long history of online casinos and gambling has been filled with moves to ban its existence, as well as ways of getting around existing laws. Despite many moves from governments around the world, online casinos generate millions of dollars each year in revenue and continue to climb in popularity.