Gambling may be one of mankind’s oldest pursuits and instincts, its origins shrouded in the mists of prehistory. But while brick and mortar casinos have long been an extension of human civilization, the ability to place real money bets and gamble over the internet is a recent phenomenon and the subsequent pace of development has been quite simply staggering.
In fact, according to a report compiled by audit, tax, and advisory firm KPMG International last year, the global online betting market grew from £16.5 billion in 2009 to £27.6 billion in 2015, with an estimated compound annual growth rate of £37.4 billion in 2018. As for the European online betting market in particular, the same report observed a market value of £8.4 billion in 2009, which grew to £14.6 billion in 2015, with forecasts expecting a rise to £17 billion in 2018.
Many pundits in the early years of the internet were sceptical that online gambling would ever be viable; the trust in the security of transactions over the internet just wasn’t there, the connections were unreliable, and the software not sophisticated enough to attract customers.
The naysayers would be proved wrong however, and spectacularly so. In the digital age, people are much more likely to feel comfortable depositing money to online companies, particularly established brands, with little reason to worry and plenty of chance for redress if anything were to go wrong. Online betting today is a mainstream activity, one enjoyed every day by millions of people around the world, and one which has grown in ways that could scarcely be imagined just a few years ago.
The Beginning of Online Betting
Two things were needed before the thriving online betting industry of today became a reality; strict assurances that player funds were maintained safely, and the oversight of third-party governmental regulators.
The first reliable online gambling software was created in 1994, and by combining with a security software provider, the overall product was finally made to be both trustworthy and viable. That same year saw the first small independent gaming commissions created, such as island nations in the Bahamas and Native tribes in Canada.
Like all strokes of inspiration, attributing the first offering of online betting via virtual casino games is still a matter of debate. In any event, one of the first real money wagers ever made via online casino was recorded in 1996. Initially, the industry’s earliest pioneers offered a limited range of very basic casino games. They graphics and animations weren’t spectacular in the early days, and overall site functionality was quite limited, but the online betting platforms were new and exciting, which attracted an expanding consumer base year by year.
The seed was planted, and although it would take time to grow and flourish, the potential was there for all to see. Intense competition emerged amongst these early operators, with each attempting to become the biggest and the best in this rapidly emerging industry.
A total of 15 online betting websites were operational as of 1996, but that number exploded to 200 by 1997. According to a report published by market research consulting firm Frost and Sullivan in 1998, the online betting market was valued at $834.5 million.
The growth of sophisticated software engines and reliable high-speed internet connections allowed other forms of online gambling to develop and flourish, with the most notable addition being online poker. Between 1998 and 2001 several online poker platforms were launched.
It was in 2003 that Chris Moneymaker became the centre of a perfect online poker storm. An accountant by day and amateur poker player by night, Moneymaker won a $10,000 seat for the upcoming World Series of Poker Main Event. He was the first player to achieve this feat by competing in an online tournament, buying in for a paltry $39 and enjoying the rush of a lifetime en route to securing his seat. Once he reached Las Vegas for the Main Event, Moneymaker’s momentum could not be stopped, as he played his way through the world’s toughest tournament field before becoming poker’s world champion and winning $2,500,000.
With ESPN’s camera crew on hand to document the action, including Moneymaker’s momentous run, millions of people around the world saw the potential and wanted to emulate this amazing feat. What seemed like an entire generation of college students, not to mention weekend warriors, retirees, and poker players of all proficiency levels, signed up to play online poker. The combination of Moneymaker’s nearly unbelievable David versus Goliath tale, along with ESPN’s slickly produced TV coverage, kicked off an unprecedented poker boom which fuels industry growth to this day.
As online poker flourished, a number of UK-based online gambling sites began to integrate sports betting within their overall platforms during the late 1990s and early 2000s. As a nation with a longstanding history of permitting sports betting shops, the UK gave rise to several online gambling sites which specialized specifically in offering remote sports betting.
Recent Developments
Today, the global online gambling industry has grown by leaps and bounds, spanning hundreds of individual operators serving customers all across the globe. According to a report published by Forbes in 2014, the market for American operators alone is expected to reach $7.4 billion by 2017, with the global market expected to exceed $24.6 billion by the same year. As the financials suggest, online betting has become one of the most popular online activities, generating massive revenue totals while still growing in terms of user base.
Recent technological innovations in mobile phones and tablets, along with faster dedicated connections, have also fuelled an exponential growth in the popularity of social media driven gambling games. This trend has been reflected in the wide variety of new gambling products being offered.
Consider the new technological advent of live casino games, for example. In this new format, players have the ability to participate in casino games such as roulette and blackjack, which are run by a living, breathing croupier in real time, whilst also interacting with fellow players. It was increased bandwidth and live streaming technology advances that enabled this new development. Some providers even offer a live casino option on their mobile apps, making things even more accessible. For players who find themselves unable to physically travel to a brick and mortar casino, live casino gaming online is nothing less than a modern wonder, one which has come to define the overall development of social gaming in recent years.
Different types of gambling games which are accessible anywhere while offering an extremely fast pace of play, have also become more popular as tastes change. This may be less suited to someone who is playing multiple tables or a long session of poker for example, but it is ideal for a quick spin of a roulette wheel, the ability to cash out in-play bets, or to play a quick Spin & Go tournament if your available time is limited.
One of the major software providers specializing in live casino games saw Q4 revenues increase by 62% to €22.4 million in 2015, following similar growth trends from the previous three quarters. Another major live casino provider experienced a 33% revenue increase for the 2015 fiscal year. Today, every major online betting platform has integrated the live casino function, providing players with a fresh new take on the concept of gambling over the internet.
The Future of Online Gambling and Betting
What next for online gambling? It would be foolish to speculate with any real authority on where the development of technology will lead the next wave of gambling. Social gaming and emerging platforms such as Twitch.tv, married to existing sites such as Twitter and Facebook, are likely to be in the forefront of the next wave of innovations, but beyond that it is anyone’s guess.
Online betting companies are likely to remain, as they have always sought to be, at the cutting edge of exploiting new technology. This may include concepts such as wearable tech and virtual reality, both of which are due for a big breakthrough in the next few years.
As earlier technological innovations, like the introduction of progressive jackpots in slot machines, changed the traditional casino gambling landscape, so too will the development of new technologies change the way people gamble online.
For all the progress that has been made in under a quarter of a century since the emergence of online gambling, the industry is really still in its infancy and an exciting future surely awaits all concerned, both operators and consumers.