Online gambling (or Internet gambling) is any kind of gambling conducted on the internet. This includes virtual poker, casinos and sports betting. The first online gambling venue opened to the general public, was ticketing for the Liechtenstein International Lottery in October 1994. Today the market is worth around $40 billion globally each year, according to various estimates.
Many countries restrict or ban online gambling. However it is legal in some states of the United States, some provinces in Canada, most countries of the European Union and several nations in the Caribbean.
In many legal markets, online gambling service providers are required by law to have some form of licence if they wish to provide services or advertise to residents there. For example, the United Kingdom Gambling Commission or the Pennsylvania Gaming Control Board in the USA.
Many online casinos and gambling companies around the world choose to base themselves in tax havens near to their main markets. These destinations include Gibraltar, Malta and Alderney in Europe, and in Asia, the Special Administrative Region of Macau was long considered a tax haven and known base for gambling operators in the region. However, in 2018 the EU removed Macau from their list of black-listed tax havens.
History of Online Gambling
In 1994, Antigua and Barbuda passed the Free Trade & Processing Act, allowing licences to be granted to organisations applying to open online casinos. Before online casinos, the first fully functional gambling software was developed by Microgaming, an Isle of Man-based software company. This was secured with software developed by CryptoLogic, an online security software company. Safe transactions became viable; this led to the first online casinos in 1994.
1996 saw the establishment of the Kahnawake Gaming Commission, which regulated online gaming activity from the Mohawk Territory of Kahnawake and issues gaming licences to many of the world’s online casinos and poker rooms. This is an attempt to keep the operations of licensed online gambling organisations fair and transparent.
In the late 1990s, online gambling gained popularity; there were only fifteen gambling websites in 1996, but that had increased to 200 websites by the following year. A report published by Frost & Sullivan revealed that online gambling revenues had exceeded $830 million in 1998 alone. In the same year the first online poker rooms were introduced. Soon afterwards in 1999, the Internet Gambling Prohibition Act was introduced as a bill in the US Senate; it would have meant that a company could not offer any online gambling product to any U.S citizen. But it did not pass. Multiplayer online gambling was also introduced in 1999.
In 2000, the first Australian Federal Government passed the Interactive Gambling Moratorium Act, making it illegal for any online casino not licensed and operating before May 2000 to operate. This meant Lasseter’s Online became the only online casino able to operate legally in Australia; however, they cannot take bets from Australian citizens.
By 2001, the estimated number of people who had participated in online gambling rose to 8 million, and growth continued, despite continuing legal challenges to online gambling.
In 2008, H2 Gambling Capital estimated worldwide online gambling revenue at $21 billion.
In 2016, Statista predicted that the online gambling market would reach $45.86 billion, growing to $56.05 billion by 2018.