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The Rise and Rise of the iGaming Industry

Online gambling is without question one of the biggest success stories of the internet. The industry is a little over twenty years old and despite legislative difficulties in parts of the world, the combined revenue of the world’s online casino operators is expected to reach a massive $56.05 billion this year. The industry has more than doubled in size in the last decade!

In parts of the world where online gambling is fully regulated, it’s hard to imagine a time when you couldn’t load up your favourite slot machine for a few spins after work or fight your way to a small fortune on the final table of one of literally thousands of poker tournaments taking place each week.

Of course, there was a time in most folks’ living memory that this wasn’t the case. In this article we’ll take you back to the beginning of this ever-changing and exciting industry and look at some of the developments that have both helped and hindered the industry to become the multi-billion-dollar behemoth it is today.

History of Online Gambling

The very first online casino was actually launched way back in 1996. Many people didn’t even have the internet in their home yet and the idea of ordering a pizza, checking your bank balance, or streaming a movie online wasn’t even a pipedream yet.

InterCasino took advantage of both a regulatory advancement, as well as a technological one. The early move of Antigua and Barbuda to provide licences for online casinos allowed the world’s first internet gambling venue to offer player support and auditing services. Closely following Antigua and Barbuda was the Kahnawake Gaming Commission, themselves responsible for issuing many iGaming licences, even today.

Meanwhile, software created by online security firm CryptoLogic meant that payments could be made much more securely online that previously thought possible. This in turn encouraged one of the largest online casino developers today, Microgaming, to begin creating games for the rapidly evolving legal and technological architecture. The first offered up were versions of blackjack, video poker, craps, and roulette.

By 1997, the industry really started to pick up traction. The previous year there had been just 15 major online gambling venues. This number quickly became around 200. The following year estimated worldwide online gambling revenue is thought to have exceed $830 million.

Such a rapidly growing industry prompted lawmakers in the US to act and online gambling experienced its first of many setbacks. In 1999, there was an effort made to ban online gambling all together. However, it did not pass. It would be a few more years before kneejerk reactions from legislators to the phenomena would finally win out.

In those years, online gambling continued to thrive. By 2001, there were thought to be as many as 9 million regular players enjoying their favourite casino classics from the comfort of their own home. The following year, the industry’s combined revenue grew to an impressive $4.5 billion.

The Poker Boom

An already thriving industry was seriously kicked into overdrive in 2003. A completely outsider to the poker scene of the day, appropriately named Chris Moneymaker, dropped the biggest prize in the game. What really made the online casino industry catch fire was the fact that Chris had qualified for the WSOP through a $39 tournament held on the internet.

Of course, the mainstream media caught wind of the story and shone the kind of spotlight on the world of online gambling that marketeers and affiliates the world over dream of today. Over the next few years, online gambling revenue would continue to increase and many hold this to be the golden age for the industry. The player pools on online poker sites were the softest they’ve ever been, and the explosion of different gambling operators encouraged each to offer outrageously profitable free bet opportunities.

The UIGEA

Unfortunately, such euphoria wouldn’t last – well in the US anyway. Just three years after online gambling received the most positive media coverage imaginable, legislators stepped in with another attempt to outlaw the activity. This time, they were successful. The UIGEA was passed in 2006. The law attempted to prohibit:

“…gambling businesses from knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the internet and that is unlawful under any federal or state law."

However, lawmakers didn’t account for one thing when they created the UIGEA – the internet is borderless. Many companies operating from within the US were forced to either stop offering services or to move elsewhere. This shifted the focus from America onto the rest of the world – particularly Europe.

UK Seizes an Opportunity

Rather than take the same approach as the US, the UK decided to regulate the industry in an effort to both generate tax revenue and also protect players. The first piece of legislation covering the online gambling industry was the Gambling Act of 2007. This allowed for advertising on TV, online, and newspapers, and paved the way for the formation of the UK Gambling Commission – a watchdog and regulator over the rapidly expanding industry. At around the same time, casino operators in Europe were busy forming relationships with various payment processing firms. This would serve to provide greater accessibility in terms of banking options and further strengthen trust in the still newish industry.

The newly regulated and adequately banked industry allowed gambling operators to continue to innovate under protection of the law. Cutting edge designs of hyper-realistic slots and table games were rapidly coming to the market. Not even the likes of the US and Australia outlawing online gambling could stop the worldwide market growing by 12.5% in the year 2010 alone. Even the now infamous indictment of massive online poker providers Absolute Poker, Poker Stars, and Full Tilt, known as “Black Friday” did little to slow the global growth of internet-based gambling.

The Rise and Rise of Mobile Gambling

The next big catalyst to drive the casino industry forward in terms of revenue would be the rise of mobile phone use. By the end of the first decade of the new millennium, smartphones were becoming the norm and early models like the iPhone allowed for the playing of sophisticated games on the move. Of course, it wasn’t long before providers developed their slot and table game offerings for the mobile market. Having a customer base able to login to software from literally wherever they happened to be was obviously a huge breakthrough for the industry.

The Online Gambling Market of the Future

In recent years, a few developments have occurred that should encourage the industry to continue growing to new heights going forward.

First of these is the proliferation of cryptocurrencies such as bitcoin. The world’s first truly decentralised, borderless form of cash could well revolutionise the way we gamble online, as it could the way future generations conduct business and even consider concepts such as money. Bitcoin, and other privacy-focused digital assets, can be used at online casinos without ever involving your bank. This invites those living in jurisdictions where online gambling is illegal to take part in the action.

The technology backing the financial innovation that is bitcoin can also be used to create casinos that are entirely open source (can be audited by anyone) and are provably fair. This isn’t the article to discuss how such casinos create games that can be checked for fairness but for now, think of it like being able to inspect that the deck of cards you’re using to play blackjack for constituency. It’s important to see that there is indeed 52 different cards of four different suits.

Another catalyst likely to drive the market to new highs in the coming years is the US approach to online gambling in general. With famous casino-owner and entrepreneur Donald Trump in the White House, it’s hardly surprising that the laws such as that prohibiting sports betting at the federal level have been found to be unconstitutional. However, the legislation of online gambling was underway in the states before the current president took office. In 2012, the likes of New Jersey, Delaware, and Nevada all moved to allow online gambling within their borders (legally permitted under the UIGEA). It should therefore come as no surprise that these same three states have also led the way in terms of regulating sports betting. The lack of regulation has not stopped people looking for places to gamble online. In most unregulated countries it’s still pretty simple to access no deposit online casino via Nodepositfriend, a website that has numerous offers regardless of your locale. There still appear to be many online casinos actively offering games of chance in the USA, Australia, France. The power of the internet. Even China has a large online gambling market which is able to penetrate its apparent 2 million strong internet team, it calls the Great Firewall of China.

Moreover, there is the rise of eSports competitions. This opens a whole new world of competitive events that fans can bet on. Such competitions are helping to turn a new generation onto gambling. The opportunities presented by online gaming also present an interesting prospect – betting on yourself in online tournaments. Much like poker players will offer up a stake to a combined prize pool that they could eventually win, those competing in various eSports tournaments can do the same. This allows them to earn some cash for excelling at the games they love. Although it’s a new concept there are many of site that have plenty of information on eSports betting, as well as the best venues to partake yourself!

Finally, the sheer profitability of the industry encourages developers to continue to strive to create ever-more exciting games. As technology continues to advance, extravagant representations of casino games and fully immersive fruit machines are becoming the norm. The latest trend of 3D slots is one such example. Based on all of the above, it seems highly unlikely that the online betting industry is set to slow down anytime soon!

This article does not necessarily reflect the opinions of the editors or management of EconoTimes

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