History of Online Casinos
March 6, 2009

Development of online casino software and the attendant administration system is a costly affair. It is only viable if there is a large customer base assured. With the rapid penetration of the Internet into households in the 1990s the required customer base became a reality. In 1994 one of the first major steps in the history of online casinos was taken. The island nation of Antigua and Barbuda enacted regulations that allowed the issuance of gambling licenses through its Directorate of Offshore Gaming.

Now the ball was in the software developer’s court. Microgaming, founded in 1994, was a pioneer in the field of online gaming software. In 1994 it was ready with the world’s first online casino software. Next year it was ready with the management tools required to administer the online casino software. Since Microgaming at that time did not have a secure way of carrying out financial transactions the initial software was without real money wagers.

Cryptologic was founded by Andrew and Mark Rivkin in 1995. The brothers had developed a system by which they could carry out financial transactions through the Internet in a secure manner. They figured that online casinos would be the perfect application. Therefore they worked on the software and in 1996 they launched the first complete online casino that could accept wagers over the Internet and payout the winnings. This was InterCasino. The same year Cryptologic started trading on the Canadian stock exchange.

Soon several online gaming software providers entered the fray and the online casino industry began to boom. However Microgaming and Cryptologic maintained their lead positions by continuously introducing innovations in the software. By 1998 wide area progressive jackpot slots were common. The jackpot in these games was shared by all online casinos that offered the game to its players. The next step was allowing players to access their gaming and financial histories. By 2000 instant play games were introduced using Flash software. This enabled players to play games in their browsers without downloading them. By 2001 online casino software had become multi lingual. This was an important step since it allowed non English speaking people to wager in their native language. In 2004 the concept of mobile online casinos was introduced. Players did not need a computer but could place wagers using their mobile phone handsets.

By 2006 the online casino industry was flourishing in North America, Europe, Brazil, China, Korea, Japan and Australia. However the epicenter was the United States. In 2006 the United States enacted legislation that almost put an end to online gambling there. The Unlawful Internet Gambling Enforcement Act (UIGEA) made it illegal for financial service providers like credit card companies and banks to transfer funds to online casinos. Though the legal issues surrounding the exact scope of the UIGEA were unclear Playtech and Cryptologic immediately withdrew their online casinos from the American market. Microgaming withdrew in December 2008. As of now the online casino industry is divided into two groups – those who accept American players and those who do not.