Gambling has existed for literally thousands of years and will probably exist forever. Human nature drives people to gamble; to take risks and to hope to win big.
Gambling took on many forms throughout history, whether it was wagering bets on who would win a war or a battle or chase down a wild boar the fastest. Then came dice games and other forms of relatively primitive games which allowed mankind its much needed outlet for risk taking and later on came cards game, roulette, sports bets and all the other casino games options we have today. All of these games had something in common though: they were all games played in one specific place, by a group of people who could see, hear and sometimes, unfortunately, smell each other.
Casinos were and are often a classy place to gamble in. They offer a glamorous and unique atmosphere in which to play with fellow gamblers.
All this changed with the help of technology and a little thing called the Internet. The Internet has changed our lives in many ways and in practically every aspect of life. Casino gaming, of course, is no exception. Online casino gambling caught on like fire and is today one of the most prosperous online industries in the world with billions of dollars in revenue each year, and the numbers just keep growing.
It is true that the online gambling industry has lately run into a major obstacle with the recent anti-gambling law in the United States, but if history teaches us anything about gambling, it's that it always survives and it is never contained for long.
The Genesis of Online Gambling
In the beginning there was Antigua and Barbuda. The year was 1994 and the tiny island country was the catalyst for the online gambling industry. That year was the year that Antigua passed the law that made it a legal jurisdiction and allowed it to issue gambling licenses. Not only did it provide online gambling its start but even today, most online gambling companies are based in the country in order to use their license.
In light of the new opportunities, and even before the first online casino opened its gates, came the gaming software. Microgaming, an Isle of Man based software company, developed the first fully operational online casino software which paved the way to the many online gambling sites that followed.
CryptoLogic, an online security software company, provided the much needed software to make Internet transaction safe and viable. All this led to InterCasino, the first online casino in 1995.
But the start of online gambling was not easy. There were many obstacles in the way, mostly over the legality of the industry as a whole. There were many who opposed the very idea of online gambling. The battle raged particularly high in the U.S. Congress by Senator Jon Kyl from Arizona, who tried several times to prevent U.S. citizens from gambling online by promoting anti-gambling campaigns.
Gambling in the United States
Gambling in the U.S. was at times viewed positively by the public and sometimes negatively. Public opinion has evolved and changed many times over the years.
Gambling was completely banned in the 1890's, at a time when lotteries were the most common form of gambling. In the 1920's public sentiment allowed its comeback. The stock exchange crash in 1929 made people believe that regulated legalized gambling would stimulate the economy and in 1931 gambling was finally fully legalized in the state of Nevada. Americans finally had a place to gamble freely, with Las Vegas as the center of the action.
All this changed in the 1970's when riverboat and Indian reservation casinos were opened and provided some form of legal gambling in all states except two, with revenues overshadowing video games, movie tickets, music albums and theme parks revenues combined.
The Internet - Gambling With New Technology
Two decades later, in the mid-1990's, the World Wide Web revolutionized the gambling world. The evolution of technology made it possible to gamble anywhere, anytime.
The first online casino offered 18 different games and online access to the National Indian Lottery. The online gambling industry revenues in 1997 were $1 billion, with $600 million from the U.S. alone. The revenues tripled by 2001 with more than $3 billion worldwide, almost tripled again by 2004 with $8.2 billion and reached more than $15 billion in revenues so far in 2006. All predictions for the future of online casino gambling, which predicted revenues of $25 billion by 2010 are now void, due to the new American law. But growth in the industry, where casino gambling is not outlawed, is guaranteed.
Present and Future
In 2003, an organization called eCOGRA (eCommerce and online gaming regulation and assurance) was founded in order to provide a safe environment for casino gamers to play in.
Since the online gambling industry spreads out through many countries, laws and regulations, an organization that would unite all online casino gambling sites under a set of rules and standards was necessary. Today, eCOGRA regulates, monitors and certifies over a hundred online casino gambling sites and is a benchmark for the industry.
2003 also marked the rise of the popularity of casino poker, especially in the United States. When Chris Moneymaker won the World Series of Poker with $2.5 million, after playing online poker rooms almost exclusively, it made poker a household name; a game that everyone plays. Poker, and online poker in particular, finally got a good reputation. WSOP broadcasts on television helped to better poker's image in the eye of the public and it became a sport instead of a shady gambling card game.
Things were going well for the gambling world and mainly the online gambling world. But the good times would not last long. Already in the works was an attempt to make gambling online impossible for U.S. residents.
On September 30 2006, the United States Congress passed a bill that made it illegal for banks and credit cards companies to process payments from U.S. residents to online casino gambling companies. The bill was attached at the last minute to a completely different bill regarding ports security. The bill later became law when President Bush signed it on October 13.
What happened next is a major downfall of online casino gambling companies stocks. Party Gaming, operator of Party Poker, dropped 56 percent, 888 holdings went down 27 percent and Sportingbet's stocks fell 56 percent and has recently sold its American division to Jazette Enterprises for $1 in order to get rid of a $13.3 million debt.
While the online gambling industry will probably survive the recent setback, it is undeniable that the industry has run into a major difficulty since the U.S. provides half of the income for some casino companies and much more than that to others. This is a critical hour and an interesting time for the online gambling industry. It remains to be seen if it will get back on its feet, perhaps stronger than ever, or will it slowly be reduced to a few big companies that will be strong enough to withstand the recent blow.