Online Casinos: Past, Present, and Future

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The history of online casinos doesn’t go back very far, as they are a relatively new phenomenon. The first online casino was launched back in 1994. We should acknowledge the speed of development and progress still taking place in online gambling, while also taking notice of the uncontested fact that many of the infantile diseases of online gambling have already been successfully treated and cured. Nevertheless, we must admit: this kind of activity is still very young. After all, we have only just started learning how to gamble online!

Have a little think about the first movies made in the earliest days of the history of cinema. Remember these silent-screen, black-and-white films? Theatrical make-up, harsh lighting,  unconvincing false mustaches – everything seems like it was just taken from a provincial theater and filmed without mercy. And indeed it was: the first movies were nothing but filmed staged performances of that time. But it was still a truly revolutionary move when theater and scenic art, as we knew them back then, simply went on-screen.

And it was a change of precisely the same significance that took place in the casino gambling by the end of the past century: it went online!

The casino games the people used to play for decades, if not for centuries, simply moved to the web. And now, at the very beginning of online casino gambling era, we still see the same old craps, roulette, blackjack, baccarat, slots, etc. Yes, some games have become very much different from their land-based casino’s prototypes, of which more later! But perhaps we can agree: in the future, gambling in online casinos will be very different from what see now – every bit as much as the movie industry of our time is different from its silent, black-and-white origins!

Casinos Going Online: The First Steps and Challenges

Gambling Game neon lightIn 1994, Antigua and Barbuda, a small Caribbean country, adopted Free Trade and Processing Zone Act (No. 12 of 1994), which legalized online gambling services provided to offshore customers all around the world. This was a great first step at a time when many other jurisdictions showed hesitant or even downright negative attitudes towards the use of the newly birthed worldwide web for gambling purposes.

Microgaming was prompt enough to cleverly catch the wind of change and to come up with their first online casino software at about the same time; 1994 was a good year for online gambling. Pretty soon, indeed just two years later, in 1996, the problem of how to secure financial transactions for online gambling was also successfully solved – credit goes to the CryptoLogic company, with their effective and safe encrypted communication protocols. The first-ever online casino – InterCasino – opened its virtual doors and accepted the first real-money wager in 1996, and the new era of online gambling had begun.

Waves of new developments and novelties were coming in. New gaming features, new designs, layouts, interfaces… In 1998, the first progressive online jackpot slot powered by Microgaming was launched. Called “Cash Splash,” it is still playable even today!

The future of online gambling seemed pretty bright. There was practically exponential growth for ten years running, till the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 had its say. In fact, this was a real force majeure that caused a huge negative impact on the whole gambling industry in general, and particularly on online casinos.

According to the new law, financial institutions were forbidden to process gambling-related transactions. Many operators left the US market or else quit this business completely. However, a safe niche was found… Yes, the Caribbean, once again! And also some other places around the world as well. Many online casinos ended up ‘moving’ to these off-shore jurisdictions.

Online Casinos: The Issue of Jurisdictions

Since the adoption of the UIGEA, the jurisdiction – the country or territory online casino operates from – has become an issue of key importance for online gambling. The jurisdiction does not really have much to do with a physical location – quite often, it is only about the documents and the fees, and nothing else.

However, the best first-class jurisdictions are those where there is strict control over the licensing and operations of the online casinos, player safety, personal data protection, etc. Here they are, in alphabetical order: Alderney (UK), Belgium, Denmark, Gibraltar (UK), Isle of Man (UK), Kahnawake (CA), New Jersey (US), the United Kingdom.

The second-class jurisdictions include Antigua and Barbuda, Malta and the Philippines. Online casinos operating from there may try to do their best to meet the standards set by the casinos from first-class jurisdictions; but as the general level of control is somewhat lower, there can be exceptions. That is why the players are advised to check the reputation of the casinos before depositing real money.

The jurisdictions of the third class are Anjouan/Comoros, Belize, Costa Rica, Curaçao (Netherlands Antilles), and Panama. There are many good and reliable casinos in these jurisdictions, too. They offer some really perfect online casino games with an excellent interface and design features. The quality of their gaming product is practically the same as offered from any other jurisdictions. But the difference lies in the level of control and protection!

For example, if there is a dispute between the player and the casino, these jurisdictions don’t offer any protection for the player. The licenses issued are seldom or never monitored, and it sometimes looks as if nobody is keeping an eye on what the casinos are actually doing. There can be some fraud and scam online casinos, as well as casinos who are very reluctant to pay out your winnings.

Before choosing to play in an online casino from one of the third-class (sometimes also called “rubber-stamp”) jurisdictions, the players need to undertake small research about the particular casino he or she wants to play at, checking the reputation and the experience other players may have had with it.

However, as we already mentioned, a cure for many infantile diseases of online casino gambling has already been successfully developed; watch out for fraud and scam online casinos! Just be careful and you’re going to be fine.

Social Gambling: Playing Online Casino Games for Free

The online era has given rise to a new phenomenon of “free gambling” – you gamble without wagering any real money or using your credit cards, while still playing your favorite casino slot games, progressive jackpots or video poker; and socializing with other people who share the same interests. Or else you can play free games just to practice, considering playing for real money once you feel you are “good enough.” Whatever your reasons for a nice game of social gambling, it has proven to be a great source of fun for millions of casual players worldwide!

Global Online Casino Market

As many experts agree, online casino gambling is the most dynamic segment of the world’s economy, with a Compound Annual Growth rate (CAGR) of about 8%! There are several important factors contributing to this expansion: the growth of the Internet population, the increasing use of mobile devices and platforms, and more income per capita in the target groups.

Gambling Cards People PlayingBut if you look deeper into these factors, you can see that every change taking place in modern life and economy, does help the global expansion of gambling one way or another; whether that be more equal pay for women, higher quality and more accessible Internet connections, or the growth of smartphone sales in developing countries.

It is quite difficult to exactly estimate the global market size of online casino gambling, but it is most likely about $15 billion already, with more than 60% of this figure being held by its European segment with the leading positions of the UK. However, geography is not really the key point here, as these numbers are taken by gambling jurisdictions, rather than the countries the gamblers come from. Indeed, web users tend to ignore national borders, preferring to gamble as suits their taste.

The Future of Online Casinos

In general, the world we are living in gets more unpredictable (or less predictable). The theory of “black swan events” seems to have found many convincing confirmations in all spheres of life over the course of recent years and decades. In online casino gambling, such black swans as UIGEA are certainly going to fly in, changing everything. But we also need to understand that this cuts both ways. Because there will be other unpredictable events too – events helping online gambling to expand ever more quickly over time!

The global trends we are witnessing are upwards: more legalization and regulation everywhere, as well as more customers; especially in the developing world!

Another important trend is that casino gambling is going not only online, but also mobile. In theory, you could now play your favorite casino games anywhere you are and whenever you want. This option alone can explode the market of online casino-going, speeding the growth numbers up even more.

But, coming back to the beginning of this article, we really should expect something else to come along in the near future. Something completely different. Perhaps a series of completely new games suited for the new online and mobile formats. Of course, the people are still going to play all the “old” casino games like roulette and blackjack; but the new online era we are entering now is calling for new, yet unseen forms of online casino gambling.

What exciting news will be brought to us in days to come? We shall see.


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