Internet Betting History

When the first United States action against Internet Betting occurred in 1998, it was difficult to predict the power that online gambling would have in society today. According to the then Attorney General Janet Reno, “The Internet is not a electronic sanctuary for illegal betting.” She then went on to proclaim that Internet bettors could not “hide online or offshore.”

However, “Internet Betting” today has become prevalent and diverse enough to extend into areas previously untouched such as Fox’s American Idol competition and even the deaths of celebrities and outcome of government functions such as court cases, the passing of bills and elections. An understanding of the history of Internet betting is important to understanding how it may continue to grow, the future of this multi-billion dollar industry and how it can effect even people that never take part in any form of online gambling.

Internet Betting Software – Origins And History

Still widely used today, the software manufacturer Microgaming was the first institution to develop software specifically designed to be used for Internet gambling in 1994. August 18th, 1995 was when the first official online casino launched: Internet Casinos, Inc. Featuring 18 casino games, this company catered primarily to visitors wishing to participate in the National Indian lottery. However, many consider the previous launch of The Gaming Club and Intertops to be the first official appearance of Internet betting through sportsbooks.

The first Internet betting web sites had a very limited selection of games. For example, the 1997 “Version IV” of Microgaming’s software included only nine games:

• Standard Blackjack
• Video Poker
• Baccarat
• Slot Based Games (3 Lines, 5 Lines, Cash Splash)
• Roulette (No 00)
• Craps
• Stud Poker (Caribbean)

The Gaming Club was the first online casino to feature Microgaming software in 1997. Owned and operated by Carmen Media, The Gaming Club is still available online today. Headquartered in South Africa, The Gaming Club is now part of a conglomerate of Internet casinos under the name Belle Rock Entertainment Group.

Early Internet Betting Problems – 1990s

One of the most influential problems of early Internet betting (besides developing legal issues) was the problem of receiving withdrawals from online gambling accounts. Today, pay outs can be made to eWallets and other payment options in as little as 24 hours. When Internet betting first emerged, receiving a cash withdrawal in seven days was very rare. In fact, most withdrawals required closer to two weeks to be approved and processed.

Especially of consideration in the United States, early Internet betting web sites were owned and operated offshore to avoid legal problems. With online casinos and sportsbooks still in their infancy, one of the most common problems was effective customer support. Many support lines employed representatives that spoke English poorly or not at all. When customers from English speaking countries called for support, they would typically be directed to the online casino’s web site or forced to remain on hold for up two 2 hours for an English speaking representative.

With the emergence of Internet betting also came specific targeting by criminal groups due to a variety of factors:

• Most Internet betting institutions were operated anonymously.
• Internet financial security was nowhere near as well developed as it is today.
• Extortion through DOS attacks, hacking of servers and intimidation was simple to implement and difficult to trace.

Internet Betting: Financial Stability, Growth and Legal Action

Even through historical economic down turns, Internet betting has continued to show exponential growth. As early as 2001 (only 4 years after the relative beginning of organized Internet betting) the online gambling industry reported revenue of $3.087 billion worldwide, even in the wake of several major legal actions.

The largest increase in year to year revenue occurred between 2004 and 2005 when global revenue from Internet betting rose from $8.246 to $11.987 billion. In 2009, Internet betting organizations reported $22.713 billion in total revenue. This number is only expected to grow as early estimates for 2010 report a total of $24.471 billion and $27.652 billion in 2011.

One of the first major legal development against online payment methods for Internet betting was enacted on June 14th, 2002 by the then Attorney General Eliot Spitzer. In the wake of Spitzer’s 1999 lawsuit against an Antigua based online casino claiming that they violated the gambling laws of New York by accepting bets from its citizens, Citibank came to an agreement to begin blocking all of its customers online transactions for the purpose of Internet betting.

This historical agreement saw the emergence of special codes applied to credit and debit card transactions that would track exactly what was being purchased. If it was discovered that such cards were used for Internet betting, they would be rejected. In addition to agreeing to block all Internet betting transactions, Citibank also agreed to pay $100,000 to the state of New York to battle compulsive gambling and assist the people directly impacted by such activities.

Internet Betting Today – New Wagering Options

Today, Internet betting has extended far beyond the original options available to users such as basic casino games and sporting events. Many web sites have begun to offer odds and accept bets on long term wagers concerning the actions of celebrities and world events. Most notable among these casinos was the 2007 addition of “celebrity goof” bets by BetUS.com. Some of the most common Internet bets were centered on the famous pop singer Britney Spears.

Among the most popular Internet bets on Spears were negative in connotation and included:

1.Britney Spears Will Become Involved in a Christian Cult (20:1)
1.Disowned By Her Family (4:1)
1.Fired by Her Label (3:1)
1.Be Offered (and accept) a Starring Role in a Blockbuster Film (150:1)

One bet that recently concluded was the 150:1 wager that Spears would marry Michael Jackson. Following Jackson’s death on June 25th, 2009, the Internet betting option was obviously completed as being impossible.

Another unconventional Internet betting development was the inclusion of wagers on television competitions such as American Idol. One web site that offered such wagers was Gambling911.com in 2006. Beginning on May 23rd, 2006, Gambling911.com offered -373 odds of the eventual winner of the competition, Taylor Hicks. They also featured odds of +317 on his competition, Katherine McPhee. By 8:15 PM on May 24th, the odds had changed to -736 for Hicks and +596 for McPhee. So, Internet bets on Hicks would require a hefty $7.36 to win $1.00. Conversely, wagers on McPhee would require a bet of $1.00 to win $5.96

Internet Betting Tomorrow – The Future of Betting On The Net

Despite legal issues and new worldwide legislation, most notably the October 13th, 2006 enactment of the Unlawful Internet Gambling Enforcement Act (UIGEA), Internet betting has continued to flouish both in the United States and around the world. Most financial experts agree that Internet betting revenues from legal establishments will increase at a rate of  $2 to $3 billion per year. Of course, some estimates of the revenue collected by all Internet betting (legal and illegal) claim total revenues to be nearing the $40 billion mark in contrast to the current estimate of $24.471 billion.

Internet betting shows no signs of faltering in the next decade. Even with the crippling Recession in the United States and worldwide economic progress stable at best, Internet betting is estimated to open up more betting options and continue to increase in both scope and diversity. The gambling industry has been revolutionized by the addition of Internet betting options.

In countries where offline betting establishments are limited and heavily restricted such as the United States, citizens from around the country can still legally place wagers on games and world events without having to leave their home. While the legal status of Internet betting may be difficult to predict, especially as some countries begin to moderate and “crack down” on monetary entertainment to encourage economic growth, most experts agree that Internet betting is here to stay.