History of Gambling and Casinos
Gambling has long been part of the history of the human race. With evidence of gambling existing in the oldest human civilizations - Egypt, Ancient China and Rome - it could be argued that gambling is even a part of the human psyche. There certainly is something to be said for the psychology of gambling. If one looks at the history of gambling, as well as the evolution of casinos, it is clear that modern day human civilization is just as psychologically tied to gambling, if not more, than hundreds of thousands of years ago.
While the basis of placing a wager on risk has remained relatively unchanged, the manner of doing so, ie., the games themselves, have come a long way from the ivory dice of Thebes to paper money shuffling in 900 AD China to upper-class card games in 18th century Europe to the first mechanical slot machine in 1895 to the flashy video slots and video poker machines of land-based casinos today.
The reach and availability of gambling has also come a long way since early civilization. Casinos, spread betting shops, organized poker circuits and racetracks have helped fuel a global industry, which is expected to generate $144 billion in the year 2011, over half of which will come from the United States alone ($79.6 billion). An organized and regulated industry in its own right, gambling, and its history to come, is now in the midst of a new chapter, largely sparked by the advent of the internet. It’s called online gambling, and is surely to - yet again - mold and change the business of gaming from the inside out.
In 1998, just a couple of years after the launch of the first legally regulated online casinos, the online gambling industry generated $836 million in global revenue. Fast forward to 2009, and this figure has exponentially turned into over $6 Billion in annual global revenue. Needless to say, the online gambling industry is one that has grown leaps in bounds over its short fifteen year history.
The early beginnings of online gambling are marked by concurrent developments in both the technological and regulatory realms. On the technological front, it was the online casino software developers, Cryptologic and Microgaming (later followed by Boss Media) who were responsible for developing many of the technologies used today in online casinos, including secure deposit/withdrawal capabilities via a software cashier interface, and the actual game applications themselves. In fact, both Cryptologic and Microgaming remain two of the largest software developers and licensors of online casinos today.
On the regulatory side, the formation of the Kahnawake Gaming Commission by the Mohawk tribe outside of Montreal and the Antigua and Barbuda Directorate of Offshore Gaming provided a direct avenue for online casino software licensees to provide internet user’s with an accredited destination for making safe and fair gambling wagers online. From this point on, the online gambling industry is marked by a fast and furious advancement in both regulatory transparency and technological advancement.
Along this fast and furious journey, there have been numerous bumps in the road, namely an uphill battle within the regulatory landscape of nations opposed to regulating online gambling in all of its forms - online poker, spread betting, online casino gaming, lottery, bingo and skill games. While the reasons for opposition vary, it can be said that resistance has always been based upon the concept of protection, whether protecting family values, protecting minors or protecting land-based gambling interests.
The truth of the matter is that the technology responsible for protecting online gamblers and ensuring safe and fair online wagering has long been effectively implemented by accredited software companies. However, the recognition of this effectiveness - notably from governmental bodies - has and continues to be a slow and sometimes difficult process. While the United Kingdom now regulates all forms of online gambling, Canada and an increasing number of European nations also do so to varying extents, the United States still remains the least regulated, while still representing the largest sector of the global online gambling market.
In fact, online gambling is currently banned in the U.S. under the Unlawful Internet Gambling Enforcement Act (UIGEA), albeit it’s implementation has been delayed. With growing support in the United States for internet betting regulation, especially for online poker, Congressional lobbying has had a significant impact on educating lawmakers, not to mention highlighting many of the inherent flaws which critics of the UIGEA, those of which include the American Banking Association, say will make it impossible to ban online gambling under the UIGEA, which leaves carve outs for horse racing and fantasy sports betting. Currently, two bills are gaining momentum in Congress - one calling for the revocation of the UIGEA, implementing a long term study of online gambling and giving individual State’s the right to regulate - the other bill setting forth taxation and regulatory policies estimated to generate $42 billion in tax revenue over the next ten years.
Bringing this back full swing to the land-based gambling industry, it is understandable why Las Vegas has been hesitant to support online gambling regulation. On the one hand, it could mean a drastic loss in business, which has already been the case to a certain degree. On the other hand, it opens the door for brick ‘n mortar casinos to capitalize on their brand awareness and take the lion’s share of online gambling revenue in the future. Casino giants like Harrah’s are coming around to the idea of the latter, and have already launched online casinos of their own (operating in other jurisdictions of course). But rest assured, if and when online gambling is regulated in the States, land-based operators will jump in head first.
There is no denying that the future of gambling, whether it be in casinos, poker rooms, race tracks, or bingo halls, will not be without remote technological advancements. The advent of the internet, Wifi, smart phones and advancements in satellite communications will continue to play a role in making gambling easier, safer, bigger and better.
Referenced Sources:
1) Government Accountability Office Internet Gambling Report: http://www.gao.gov/new.items/d0389.pdf
2) Online Casino Suite: http://onlinecasinosuite.com
