Internet Gambling – Part 1, A Brief History

The reality of online gaming a few years ago seemed a long way off. But recently, many states have already started legislation, whether online poker or sports betting. Fantasy Sports seems to find a lull when so much more seems to be arriving soon to a gambling state near you.

The 1990’s

The first online casino began operation in 1995 with an offering of eighteen online games, and since then the industry has boomed. This phenomena has truly revolutionized gambling, allowing gamblers to place wagers on all sorts of games and events from the comfort of their home. And while it has been unlawful to bet online, Americans have still found ways to participate in online gambling.

Almost every single internet gambling site is physically located offshore. These sites offer all types of gambling games, from traditional table games and slots to lotteries and ports wagering.

But events changed the way online gambling was available to American players. To start to regulate, and eventually end online gambling, most major American credit companies prohibit payments to online gambling services. These policies are mostly self-implemented due to the high risk of fraud and bad debt in the online gaming industry.

After credit card companies banned online gambling credit, gamblers began to use online payment providers such as Paypal with increasing frequency. However, more pressure was exerted on the ability for Americans to use such services and gamble online with real money, so most foreign online casinos refused American gamblers.

The 2000’s

Poker Black Friday – the end for most online poker sites at the time.

The European Union then ruled in favor of online gambling companies according to their restraint of trade rules, permitting European companies to continue offering online gambling to all member states of the EU. And many jurisdictions within Europe, such as the UK, Malta, Gibraltar and the Isle of Man offer online gambling licensing services, along with the long standing licensing locations of Canada and the Caribbean. In 2008, South Africa and Italy joined the long list of countries to introduce legislation to regulate and endorse online gambling as a perfectly legal form of adult entertainment.

Online Poker Offered

Mobile gambling inside the casinos is an option in some states, such as New Jersey, Delaware and Nevada. Pennsylvania is close behind. But this is only the tip of the iceberg. Many states are looking into legalizing more than just online poker.  Why now?  For the states, it’s simple:

  1. As a source of revenue for the state.
  2. To strengthen their existing gaming establishments and/or lottery.

My next post will take a look at where online gambling is headed, and a specific look at how it includes and may impact New England “brick-and-mortar” casinos, with the help of Steve Ruddock, our favorite online gambling expert.

That’s all for now.



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