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Online Gambling History

Believe it or not, online gambling is only 16 years old. It can be hard to imagine an industry in its teenage years could be raking in billions of dollars a year. It’s taken lots of work and even some major legal battles to get the online gambling industry where it is today.

In just the past five years, however, gambling from a home computer has seen a major upswing in popularity. But with increased popularity comes greater legal scrutiny. Here’s a timeline covering the evolution of Internet gambling and a few of the legal hurdle the industry has had to overcome to arrive where it is today:

1994

– Antigua-Barbuda passes the Free Trade and Processing Zone Act, 1994. This legislation grants licensing to many online sports books and casino today. This one piece of legislation has made Antigua-Barbuda one of the most popular jurisdictions for online gambling licenses.

– Microgaming is founded. The software developer would become one of the largest providers of casino software for online gaming.

1995

– CryptoLogic is founded. The company’s goal is to overhaul monetary transactions, making both more secure and effective for online gambling.

1996

– Boss Media’s parent company, Boss Specialtidninger AB, begins developing casino software for use over the Internet.

– Microgaming shifts focus, selling off the company’s existing casino operations to concentrate on Internet casino software development.

– CryptoLogic begins work on gaming and the first eCash applications.

– InterCasino goes online in October, claiming to be the first casino on the Internet to accept real money wagers.

1997

– Boss Media AB is given control of Boss Casinos’ system development work. The game servers are relocated to Antigua-Barbuda, utilizing the country’s willingness to license and sanction online gambling.

1998

– Microgaming launches the Internet’s first slots game with a progressive jackpot, Cash Splash.

– The online gambling industry is reported to generate $834.5 million in revenue by Frost and Sullivan.

– Sen. Jon Kyl (R-Ariz.) introduces the Internet Gambling Prohibition Act to the U.S. Congress. Sen. Kyl is the primary opponent of online gambling, and this piece of legislation is intended to make it illegal for companies to offer gambling products to U.S. citizens through the Internet. The bill fails to pass.

–Boss Media and an external customer sign the company’s first licensing agreement.

1999

– Sen. Jon Kyl (R-Ariz.) revises the Internet Gambling Prohibition Act and reintroduces it to Congress. Again, the bill fails to pass.

– Microgaming brokers a deal with Price-Waterhouse-Cooper, a preeminent auditing firm, to review and report all casino payout percentages.

– Lasseters goes online, becoming the first Australian Internet casino licensed by the country’s government. The license is granted under the Northern Territory, which then quickly enacts further legislation to grant licensing to other Internet casinos.

– Christian Capital Advisors estimates in September 1999 that approximately 700 casinos are accepting wagers online.

– Multiplayer functionality makes its debut in Internet gambling, thanks to Boss Media. This new functionality revolutionizes online gambling, allowing multiple players to enjoy the same game, and even chat while playing at the virtual tables.

2000

– Australia switches positions, enacting the Interactive Gambling Moratorium Act. This legislation makes it illegal for Australia-based Internet casinos and sports books to operate, unless licensed prior to May 2000. The law does, however, permit Lasseters to continue operation.

– Rep. Bob Goodlatte (R-Va.) introduces yet another Internet Gambling Prohibition Act, this time to the U.S. House of Representatives. This bill also fails to pass, falling short of the necessary two-thirds majority it needs to move forward.

– CryptoLogic releases its 200 annual report stating the company’s customer base for its electronic payment system has increased to over 680,000 since it began operations in 1996.

– Gibraltar and the Isle of Man, both United Kingdom sovereign territories, begin offering licenses to online sports books.

– CryptoLogic appears on the NASDAQ National Market for the first time, using the symbol CRYP.

2001

In March, PRNewswire publishes a survey claiming that 8 million people have wagered real money through online casinos.

– Nevada passes legislation intended to allowing licensing for online casino to operate out of the state. It is believed, however, that the U.S. Department of Justice will not begin issuing licenses until a year or two after the bill passed.

– A progressive jackpot of $414,119 is won by a player at an online version of The Sands, based out of the Caribbean. This is the largest progressive jackpot won over the Internet to this point.

– Alderney, located in the British Channel Islands, passes legislation to benefit Interactive Gambling, allowing the Alderney Commission to accept licensing applications.

– The United Kingdom releases The Gambling Review Report. This review suggests the legalization of all forms of Internet gambling. Subject to negotiations before it becomes law, this legislation would make the United Kingdom one of only a few OECD countries to legalize Internet gambling.

2002

– Rep. Bob Goodlatte (R-Va.) sponsors a bill updating the Wire Act of 1961. This bill targets online betting, specifically Internet casinos. The U.S. House Judiciary subcommittee on crime passes the bill unanimously. The bill moves to the full Judiciary Committee for consideration. If the bill is passed by the full committee, it will then move to first the House of Representatives, then the U.S. Senate, for final votes.

– More than quadrupling its position three years earlier ($845 million), online gambling reaches $4.5 billion in generated revenues.

– In May, a player wins $1.59 million, the first multi-million dollar jackpot, from a Microgaming progressive slot known as Major Millions. Captain Cook’s Casino hosts the game.

2003

– eCommerce and Online Gambling Regulation and Assurance (eCOGRA) is established. This regulatory association marks the first move toward a safer, more secure environment for online gambling by requiring member gambling sites to follow strict guidelines.

– The U.S. House of Representatives passes another anti-gambling bill, this time making facilitation of online gambling illegal for payment-processing companies.

– After preparing exclusively through online poker rooms, Chris Moneymaker cashes $2.5 million as the 2003 World Series of Poker champion.

– Playtech launches a new service allowing players to interact and chat with live dealers via video streaming, calling the service “Live Gaming.”

2004

– The World Trade Organization sides with Antigua-Barbuda in the country’s cases against the United States. The court’s ruling determined that the U.S. laws against online gambling were unlawful because American companies were still allowed to operate horserace betting sites, as well as land-based casinos.

– Microgaming’s library exceeds 250 online games.

– Poker reaches new heights of popularity thanks to the online craze. Several TV shows go on the air broadcasting poker games, in addition to advertising both celebrity and amateur tournaments.

– Though the United States is home to controversy concerning online gambling, the country houses the largest player base of online gamblers, encompassing over half the online gambling market. The United States is responsible for 51 percent of the $8.5 billion in Internet gambling revenues according to Christiansen Capital Advisors.

2005

– The Microgaming progressive jackpot rises above $160 million, gaining over 5,000 winners.

– Playtech launches the company’s newest gaming platform version, codenamed “NG”. The new upgrade utilizes the latest Internet standards, providing brand new games, simultaneous game play, improved features, and more.

– PartyGaming, owner of PartyPoker.com, becomes the biggest financial float on the London Stock Exchange in over four years. This would eventually propel the company to the FTSE 100.

– A new progressive jackpot record is set by a Florida resident. The $1.96 million jackpot is won while playing Carnival Casino’s Gold Rally slot game

2006

– After only 12 years in existence, the online gambling industry is estimated to include approximately 2,300 operating sites.

– PartyGaming makes moves to acquire Empire Online’s EmpirePoker.com. Rumors begin to circulate that UltimateBet’s parent company, in addition to Poker Stars and Poker.com, may soon enter public trading.

– Playtech successfully admits shares to the London Stock Exchange’s AIM Market. The company is valued at around £548 million. Through the placing of 103,142,466 shares, the company trades under the symbol PTEC.L and raises £265.2 million gross. These shares have been placed in countries all over the world, including both the United States and United Kingdom. This offers a clear endorsement of Playtech’s business model and prospects.

– The U.S. Republican party sponsors a bill that would effectively prohibit United States citizens from gamble online. The bill passed with a 317-93 vote in the House of Representatives, making it illegal for credit card companies and U.S. banks to submit payments to online gambling websites. However, the bill must still successfully pass through the Senate. This seems increasingly unlikely.

– BetOnSports CEO David Carruthers is arrested by U.S. federal agents in July, citing the U.S. Wire Act. Caruthers was arrested in Dallas, TX while switching planes. BetOnSports, and Carruthers in particular, are charged with tax evasion in addition to other offenses. Both the arrest and a prohibition of BetOnSports accepting wagers from United States customers shocks the online gambling community.

– In September, the Internet Gambling Enforcement Act 2006 (H.R. 4411) passes the U.S. Senate. The bill is attached to unrelated legislation, allowing it to pass on the Friday night just before the Congress election recession. The bill was signed into law by President Bush on October 13, prohibiting any American institution from processing transactions with online gambling sites. There are, however, exceptions included for horseracing, fantasy sports, and state-run lotteries. Major online gambling operators such as 888.com and Partygaming close off access for American players, drastically reducing online gambling revenues.

2007

– In January, NETeller falls apart following the arrest of founders Stephen Lawrence and John Lefevbre under charges of money laundering. The company, formerly online gambling’s leading wire-transfer service, quickly pulls out of the United States. This results in a two-thirds loss off NETeller’s business, but retains support from international operators like FullTilt, Bodog, and Pokerstars.

– USA Today releases a report in February indicating approximately 2,300 online casinos and sports books have pulled out of the United States. The report also states that U.S. customer accounts on both BetOnSports and NETeller have been frozen, effectively thousands of dollars in limbo. NETeller takes further hits, with the Chinese, Canadian, and Turkish governments banning the service.

– March sees the European Court of Justice reject Unibet’s petition for access to Sweden’s gambling market. On the other hand, the European Free Trade Association grants a Norwegian state-run gambling monopoly the right to operate. Despite the WTO’s suit, European authorities join the wave of worldwide online gambling bans.

– U.S. congressman Barney Frank (D-Mass.) pushes legislation that could overturn the UIGEA in April by proposing the Internet Gambling Regulation and Enforcement Act. Two weeks following the proposal, the British Medical Journal publishes a report stating banning Internet gambling is beneficial for Parkinson’s patients.

– In May, news laws are enacted by Papua New Guinea’s parliament that legalize online gambling within the nation’s borders. The Internet Gambling Study Act is introduced by U.S. Rep. Shelley Berkley (D-Nev.) to determine what effects may be caused by online gambling. Meanwhile, seven individuals and four companies, including BetUS, are indicted by the U.S. Department of Justice for illegal online gambling practices.

– In June, sentiment seems to turn against the UIGEA, with U.S. Rep. James McDermott (D-Wash.) calling the legislation “ineffective”. Instead, he introduces the Internet Gambling Regulation and Tax Enforcement Act to the House of Representatives. Another bill is introduced by Rep. Robert Wexler (D-Fla.) that would legalize “games of skill,” known as the Skill Game Protection Act.

– John Lefebvre, founder of NETeller, pleads guilty to charges of conspiracy to promote illegal gambling in July. The company, now controlled by British interests, agrees to pay $136 million in an effort to avoid further prosecution by the United States. Antigua-Barbuda seeks through the WTO $3.4 billion in reparations from President George W. Bush for his role in leading the withdrawal of the U.S. gambling sector.

– A report released in September by the U.K. Gambling Commission shows that gambling participation has shown an overall increase since the introduction of Internet casinos. Parliament ratifies the Gambling Act, a piece of legislation granting online gambling operators the right to advertise on British television.

– In October, Sportingbet reports better-than-expected earnings despite world financial trouble and UIGEA pressure. The U.S. Federal Reserve and Treasury announce rules to govern financial transactions between American companies and online gambling institutions, basically blocking them all.

– CryptoLogic buys into Mikoshi Studios for a reported $6.1 million, looking to expand into mobile cell phone gambling. Both Yahoo and Google settle for a combined $31.5 million with the United States government for the companies’ role in the online gambling market.

2008

– Germany renews its blanket ban on outside online gambling operators in January.

– An Associated Press report surfaces in February claiming the NBA has provided $330,000 for lobbying to keep the UIGEA in action. Belgium prepares to open its own Internet gambling market.

– In March, Congress pressures the Bush Administration to release the amount of reparations paid to Antigua-Barbuda. It is publicly announced the Administration paid $21 million. The European Union launches a full investigation of United States online gambling legislation.

– 888.com and several other online casinos continue to post better-than-expected earnings through August.

– Kentucky lawmakers in September demand that 141 online gambling sites block access to the state’s residents, or completely forfeit their URL ownership. Judge Thomas Wingate orders the web addresses be seized by the state until the matter is resolved.

2009

– Rep. Barney Frank (D-Mass.) re-introduces the Internet Gambling Regulation, Consumer Protection, and Enforcement Act (H.R. 2267), which would establish a process for licensing online gambling operators to accept wagers from United States citizens. The legislation would also enact several consumer protection guidelines, guarding against both underage and compulsive gambling.

– The U.S. Department of Justice seized $34 million in June from over 27,000 online accounts in the Southern District of New York Action Against Online Poker Players. This marks the first time money was seized from individual players and not the gambling operators.

– In October, a Joint Committee on Taxation analysis of Rep. Frank’s Internet Gambling Regulation, Consumer Protection, and Enforcement Act determined that such regulation of Internet gambling would generate approximately $42 billion over a 10-year period. The analysis was based on the provision of federal licensing.

– The House Financial Services Committee held a hearing in December concerning the UIGEA and Rep. Frank’s bill. Experts in consumer safety and online security testified that regulatory framework would offer greater protection to online gamblers. They also testified regulation would help maintain the integrity of online gambling transactions.

2010

– Online gaming operators and U.S. gamblers await developments after June 1, when the U.S. Department of Justice will begin again to enforce UIGEA and Congress will again take up Rep. Frank’s bill to legalize online gambling.

2011

– After a relatively slow year as far as any progress towards legalization in 2010, the early part of 2011 saw a couple of major steps backwards. On Friday, April 15, the DOJ stepped in and shut down the top online poker sites including: Full Tilt Poker, PokerStars, Absolute Poker and Ultimate Bet. PokerStars and Full Tilt were eventually returned their sites after they promised to stop accepting deposits from U.S. citizens. Several smaller online poker rooms tried to fill the void left by the poker giants. Many of these rooms were either flooded with players or too worried about reprisals and stopped accepting players shortly after.

– Many of the popular Sportsbooks followed suit the next week and also stopped accepting U.S. customers. The majority of the ones that didn’t stopped accepting affiliates in order to stay under the radar. Most Rival Gaming and Vegas Technology online casinos also stopped accepting players from America. The primary motive for this seems to have been that the payment processors were either shut down or compromised.

– More online poker rooms have had their domain names seized by the government, most notably Doyle’s Room. The domain name seizures haven’t done a whole lot to hinder these websites as the owner will simply purchase a domain name that the US government can’t seize. However, the lack of payment processors is hindering the average person’s ability to make a deposit and play online poker.

– In late June, Full Tilt Poker lost it’s gaming license and has shut down for the time being. Many players had not been paid yet by Full Tilt Poker. This was not a problem for poker player and PokerStars, which is still up and running without problems. Full Tilt Poker’s name and rights will probably be purchased at a later time. The players will have to wait until then before many of them get paid the money that was in their accounts.

– On August 1st, the English Harbour casino group stopped it’s operations and there are currently no casinos running on the Vegas Technology platform. Around the same time, Rival Gaming announced that all online casinos must either get out of the U.S. market or they must change to a different casino software. The only two major casino software providers that is left are Real Time Gaming and Top Game.

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