Casino Guide: The History of Online Casinos


Gambling has been around in some form or another for many years. Even before Las Vegas was “invented”, there were forms of legal gambling in the USA, such as lotteries. It was completely banned in the 1890’s, but reappeared in the 1920’s and finally legalised in Nevada, USA with the birth of Las Vegas in 1931. This was the primary gambling destination right up until the 1970’s. Subsequently, different types of casinos began to be legalised. Today gambling is legal in almost all US states in some form or other.

With the proliferation and surge in popularity of the internet in the early 1990’s, it was only a matter of time until online casinos started to mushroom. The first online casinos can be traced back to 1994, when Barbuda and Antigua passed the Free Trade and Processing Act. Under the terms of this groundbreaking Act, it became possible for companies to be granted a gambling license and provide related services online, over the internet. This Act changed everything as subsequently the industry has grown at a truly amazing pace with revenues in the USA outstripping revenues from theme parks, video games, movie tickets, and music recordings combined.


Once the industry started to grow, more accurate records started to become available. The phenomenal yet conservative industry growth estimate figures and revenues, have been on the increase and continuously growing from $1 billion in profits in 1997 to an amazing $10.9 billion in 2006. Fast forward to 2015 and the U.S. casino gaming market revenue surpassed $71 billion of which almost $40 billion is attributed to online casinos. Such growth figures within an industry had been virtually unheard of up until now. What’s more, these figures are predicted to increase to almost $60 billion by 2020. The future looks bright indeed.

Origin of Online Casinos

Three main components are necessary for an online casino to operate effectively.

Software for online games and the platforms to operate effectively is the backbone of an online casino. This can be traced back to the 1970’s when gaming software penetrated land based casinos. Slots machines based on computer software started to replace the older, electromechanical slots. The superior quality and efficiency of these new machines showcased the full power of the graphics and computer processing power. Concurrently in the 1970’s, software for Blackjack strategy and professional card counters had been developed.

The birth of the Internet in the 1990’s was the next major development to hasten the growth of the online gaming industry. This permitted connecting to a main, nodal server and gaining access to the gaming applications stored on that server.

What was missing was a mechanism for different computers to connect to a nodal server and use the gaming applications stored on that server. This barrier was overcome with the coming of age of the Internet. Initially it was used as a mode of communication. Individual users could connect to the Internet from their computers and send messages to others similarly connected. But the latent potential of the Internet in other applications was immediately apparent.

Regulation and an accompanying framework was all that was needed to complete the “holy trinity” of online casinos. In 1994 the final hurdle was overcome when Antigua and Barbuda enacted The Free Trade and Processing Zone Act. This Act was developed further with the formation of the Directorate of Offshore Gaming. This Directorate processes applications from licensees, scrutinizes and analyses them before granting gaming licenses, providing the application is found to be fit and proper. Till this day, Antigua and Barbuda is still one of the most popular and respected jurisdictions in the world.

1994 was also a seminal year in the development of online casinos as a new software development company; Microgaming, based on The Isle of Man developed the first software specifically for online casinos games.

The only missing ingredient was the processing of deposits and withdrawals; the banking options.

Development of Banking Options

In 1995, up came an online security software company that had developed software to process money transactions for online casinos. Cryptologic was born and with it the first eCash applications for online casino payments. Combining all these resources, Cryptologic created InterCasino in 1996 which was the very first fully fledged online casino. Since then the online casino industry has gone from strength to strength with no signs of slowing down.

Evolution of Online Casino Games

Back on the 1990’s the game selection was pretty limited and basic, as were the graphics and game software. However, particularly during the last few years, the quality of games has improved tremendously, with advancements in technology and software.

The games were attracting more and more players to online casinos. This prompted further investment and research into game development and online casino requirements. More and more creative games were being developed to meet players demand and hunger for newer and more advanced games. Progressive Jackpots, themed slots, and multiplayer games were developed and introduced, and soon grew in popularity attracting more players to online casinos. It became a multiplier in effect; with more investment spurring demand and increases in demand encouraging more investment in games and complimentary services for online casinos. Competition added further fuel to the fire with online casinos starting to offer great bonuses, free gifts, loyalty schemes, high paying progressive jackpots and other goodies to attract players. In effect, the online casino and iGaming industry is amongst the most vibrant and innovative industries and is constantly improving on services and adding new ones to make the online casino experience as seamless and pleasurable for players as possible. Not a month goes by without some new development or technological breakthrough occurring. All this is good news for players as systems, platforms and games get better and better with more and more layers of security and privacy. What was once an issue is no longer one. Payment and withdrawal methods have advanced sufficiently to be ultra secure and private. The same goes for the casino software.

Another major development occurred in the year 2000 when a company “invented” peer to peer gambling. This proved to be immediately popular as it creates a more dynamic gambling experience preferred by many online casinos players. Basically, players were allowed to place bets among themselves. This is known as exchange betting and it soon caught on to become very popular and remains so to this very day.

What is clear is that online casinos are here to stay. It is also evident that there will be constant improvements and developments that will further increase accessibility and enjoyment. The attraction of playing a game on a mobile device today compared to the limitations just 10 years ago are testament to the potential of online casinos. The history up to now will surely change tomorrow as advances continue to take the industry by storm to continuously change the online casino landscape.


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