Online wagering only began in the 1990s, but it didn’t take long for it to become a multi-million dollar business. The catalyst for the explosion in online gaming came in 1994, when the government of Antigua Barbuda, an island nation in the Caribbean, passed a law allowing online casinos to operate from their country.
Naturally, many people saw this as a huge opportunity, and two of them, Andrew and Mark Rivkin, formed a company called Cryptologic to write software enabling safe handling of finances in online gambling with till-then unequalled encryption practices ufabet. Another big company was formed in 1994 too: Microgaming.
Cryptologic and Microgaming were the two leading companies as afar as gaming technology. Cryptologic was first to make a fully operational gaming platform with electronic money account management. By the end of 1996, InterCasino was up and operational on the web – one of the very first online casinos. It wasn’t long before online casinos were a multi-million dollar industry. Not long after that it stepped up to being a multi-billion dollar industry.
In 1997, Microgaming released Cash Splash, the first online progressive slots game. At this time, players from the US were a large chunk of the online betting population, and this fact drew the attention of Senator John Kyl (R-AZ), who started drafting various legislative bills to stop people from gambling online. The first of these, the Internet Gambling Prohibition Act, did not pass, and Americans continued their love affair with online
Other world players coming on board the internet casino train during the late 1990s included Argentina, and UK territories Gibralter and Isle of Man, which began online sports betting sites. By 2001, the British Channel Islands legalized online betting, and later that year, there was a push to legalize internet wagering in the UK as a whole.
In 2005, the UK Gambling Act was approved, and it was a boon for the internet casino industry. The law created the UK Gambling Commission to oversee all enforcement of regulations in licensing online gaming sites, preventing underage gambling and ensuring software fairness accreditation and reporting of monthly payout percentages. The Commission also investigates and prosecutes illegal gambling and basically is a very comprehensive online wagering regulatory agency. The UK’s internet wagering oversight is now considered a model for other countries that want to regulate online gambling.
In October 2006, US legislators tried to legislate an end to betting online by American citizens with the Unlawful Internet Gambling Enforcement Act. Then-Senate Majority Leader Bill Frist (R-TN), attached the bill to a “must-pass” bill on Port Security aimed at combating global terrorism, claiming that online wagering proceeds were used by offshore companies to fund terrorism. But just before enforcement of this act was to go into place, new legislation was written allowing US citizens to participate in online gaming. Though it has passed from committee, there is no guess as to when or if it will be passed by the House and Senate. That means that currently, US online gamblers exist in a gray area of the law, though public sentiment is growing behind full legalization of online gambling in the US.
Online gambling in the USA has been on legal ground that is open to various interpretations ever since an appeals court ruling in 2002. In November of that year, the United States Court of Appeals for the Fifth Circuit ruled that the Federal Wire Act prohibited electronic transmission of sports betting information across telecommunications lines. However, it also affirmed a lower court ruling that the Wire Act does not prohibit Internet gambling on games of chance. This spared USA online casinos from having to stop operations, but only temporarily.
In 2006, before adjourning for midterm elections, both houses of Congress passed an amendment to an unrelated bill, the SAFE Port Act, that made transactions from banks or similar institutions to online gambling sites illegal. Signed into law in October 2006 by President George W. Bush, the law had the effect of causing numerous online gambling operators to suspend real money gambling for US customers.
Legalizing online gambling in the US flat out has been a constant battle ever since. Within the US, some states have seriously considered passing intrastate gambling online laws, which would permit online gambling only within those states. In November 2010, New Jersey became the first state to pass an intrastate online gambling bill through both houses of its state legislature. As of this writing, it awaits the signature of New Jersey governor Chris Christie.
New Jersey’s bill is unique among state online or internet gambling laws not only because it is the first to pass, but because it allows gamblers in other countries, but not in other states of the US, to participate in the state’s online gambling sites. Internet gambling operators in New Jersey must be licensed Atlantic City casino operators, and all equipment used for conducting Internet gaming must be located in casinos in Atlantic City or at other secure Atlantic City locations.
What does New Jersey’s law mean for online casino USA operations? At the moment, not much. However, it does send the strong signal that clarification of the legality of gambling online in the US is on many people’s minds. Online gambling enthusiasts in the USA, who have had to undertake rather labyrinthine measures to ensure they are handling money legally, are strong proponents of national legislation, as are some Congressional representatives, and many land-based casinos.
The arguments for making online gambling clearly legal in the US are also bolstered by the enormous tax revenues that could be realized by such legislation – a very appealing source of revenue in an economy where the federal government is currently running enormous deficits.
Currently, USA online casino enthusiasts concerned about the numerous international sites that have shut themselves off to players from the US have to use independent money transfer businesses to fund their online gaming. The most prominent online casinos have clear directions on how to do this, and many of them are open to gamblers in the US.