The History of Online Gaming Part 2

Posted By: Date: 12/03/2012 at 12:00 am Leave a comment

This article is a continuation from The History of Online Gaming Part 1.

A virtual implosion occurred in 2004 when the United States attempted to disallow Antigua and Barbuda from permitting its online gambling licensees to accept American players. Antigua immediately filed a suit with the World Trade Organization (WTO), who sided with the island nation. This is believed to have sparked the intense push for legislation to officially criminalize online gambling in the USA.

Feeling the aftershock of the USA’s ire, some online gambling operators began shifting their focus to the European market in 2005. As the tentacles of online gambling reached farther and farther around the globe, the industry more than double its revenue, rising to an estimated value of $12 billion.

In 2006, the online gambling industry, which was now comprised of an astonishing 2,300 active web sites, would be rocked to its core. It started with the arrest of David Carruthers, CEO of BetOnSports, as his plane landed on US soil, and ended with the passage of the notorious Unlawful Internet Gambling Enforcement Act; an appendage to a completely unrelated Port Security Bill that was signed into effect in the wee hours of the night by US President George W. Bush. For all intents and purposes, it was now viewed as illegal for Americans to participate in real money online gambling.

One after another, online casinos, poker rooms and sports betting sites began the exodus from the US market, but not every operator saw fit to follow suit. Some of the online poker community’s largest brands chose to stick to their guns, on the legal advice of their high-paid attorneys, and continued serving their American members. Among them were PokerStars, Full Tilt Poker, Absolute Poker and Ultimate Bet, et al.

With so much going on in 2006, not many took notice of the launch of the very first mobile casino.

In 2007, the United Kingdom saw and capitalized on a huge opportunity to take over as the leader in online gambling by penning The Gambling Act, a regulatory framework geared towards internet gaming. As the majority of US officials were proud to have washed their hands of online gambling, there were a few public authorities who saw what the UK was doing and sought to reverse the nation’s legal stance. Instead of criminalizing online gambling, Congressman Barney Frank gathered support and introduced a bill to license, regulate and tax internet gaming in the US. Millions of Americans were hopeful that Frank would succeed, but alas, he never did.

In 2008, records continued to be broken, with or without the support of a US market. The new record-high progressive jackpot topped the $5 million mark, awarded by Ballroom Casino, and the sports betting industry saw its largest intake of betting action take place on the 2008 UEFA and Olympic Games in Beijing.

Years went by and the industry continued to see exponential growth. Then all hell broke loose on April 15, 2011; a date that has since been dubbed the Black Friday of Online Poker. The US Department of Justice seized control of the largest online poker brands that continued to accept US players, despite the governments’ incessant proclamation that such activity was illegal in the USA. The domains of PokerStars, Full Tilt Poker and Absolute Poker were taken over, replacing their usual façade with a foreboding message that spoke of the illegal nature of the web site, crowned by the official United Sates seals of the FBI and Department of Justice (DOJ).

Nearing the end of 2011, four years after its initial introduction at the ICE Exhibition in London, mobile casino gambling would finally take off like wildfire in 2011. By this time, the majority of players had more sophisticated mobile devices, namely Android and Apple iOS powered gadgets.

In the final days of December 2011, another shock would vibrate the online gaming industry. The US DOJ, suddenly and without warning, reversed its stance on internet gaming. Where it had originally insisted that the Federal Wire Act prohibited all forms of online gambling, the DOJ decided that the Wire Act applied only to sports betting.

US states were suddenly given the right to decide on their own if they wanted to legalize online gambling. Immediately, several US states began to introduce legislation to legalize online poker and/or casino games.

Delaware was the first state to legalize intrastate online gambling, followed soon after by Nevada, although the Silver State chose to restrict its laws to online poker for the time being. New Jersey introduced two bills to legalize online gambling, but both were shot down by Governor Chris Christie. California has also been struggling to legalize, but again all efforts have been shot down. Other states, including New York and Pennsylvania, are just now discussing the possibility of legal online gambling.

In 2013, Nevada became the first US state to pass a law that would allow for online gambling on an interstate level.

Thus far, no US state has yet to launch its first online poker or casino to the public, but both Nevada and Delaware have already issued a number of licenses to operators, software developers, payment processors and other relative entities. The race is on to see who will become the first US state to accept a wager at a legal, US-based online gambling site.

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