2 April, 2024

Evaluating the history of the iGaming market

Following on from our cover feature, Gambling Insider contributor Ron Mendelson of Fast Offshore gives his take on the last 30 years of the iGaming market

Back in 1994, some 30 years ago, Microgaming developed the first iGaming software, leading to the launch of The Gaming Club, the world’s first online casino. CryptoLogic launched the first encrypted online financial transaction payment protocols a year later, allowing players to bet online with real money. By the end of 1996, some 15 iGaming sites accepted bets, which rose to 200 in 1997 and more than 1,800 by 2022. By 1998, we saw Planet Poker, the first online poker site and, in 1999, Lasseters was the first land-based casino to offer online betting, shortly followed by Ladbrokes and William Hill.

Fast forward to 2024 and tens of thousands of iGaming licences are issued to companies worldwide, thousands more iGaming sites, and at least 1.6 billion players. Games are themed in every possible way you can imagine, we have live dealer games and gambling apps on our phones, and you can pay in fiat or cryptocurrency. We have come a long way, but what other key, memorable and defining moments werethere along the way?

Costa Rican roots

Costa Rica was known for many years as a hub for offshore businesses seeking a favourable jurisdiction. By the mid-1990s, the country began to make a name for itself among iGaming operators as the industry took its first fledgling steps into the online world.

With its hands-off regulatory approach and companies allowed to operate legally without a licence, operators worldwide flocked to get established there. The country’s stable political climate and well-established telecommunications infrastructure further attracted entrepreneurs eyeing the burgeoning online gaming market. The absence of stringent regulatory frameworks allowed iGaming companies to establish a foothold in Costa Rica, capitalising on liberal business policies. The country became a hotspot for sportsbooks, online casinos and poker rooms, attracting domestic and international operators.

The Costa Rican Government, recognising the potential economic benefits, adopted a hands-off regulatory stance, allowing the industry to flourish. In 2024, iGaming companies set up in Costa Rica, often using it as a testing ground before acquiring a licence elsewhere. Others, such as crypto companies, prefer to remain there while enjoying the many benefits of it as a jurisdiction.

In 2024, iGaming companies set up in Costa Rica, often using it as a testing ground before acquiring a licence elsewhere

Vancouver rising

But one cannot talk about the rise of online gambling without mentioning the raid of Starnet Communications in Vancouver, Canada, in 1999. Starnet was a publicly traded adult entertainment and casino company registered in Delaware but with offices in British Columbia. Preceding the storming of the offices by Mounties, the authorities had conducted an extensive 18-month investigation into illegal betting and bookmaking, as well as its pornographic activities.

The news was shocking as the company was heralded as an internet success story. In 2001, the company was charged with one count of keeping a device for gambling or betting, pled guilty and was fined as well as seeing a chunk of its asset forfeited. The company then changed its management structure, brought in a new team and got a new licence in Antigua.

Another memorable name from the early years in Canada is Bodog, an online gambling empire founded in 1998 by Calvin Ayre. The brand soared during the mid-2000s as iGaming grew in popularity and he became a billionaire.In 2012, Bodog was shut down, and Ayre and three other Canadians were indicted for illegal gambling that reportedly generated more than $100m in winnings, according to US federal prosecutors. In 2017, the felony charges against Ayre were dropped, he pled guilty to a misdemeanour charge and was sentenced to one year of probation and a $500,000 fine. He then sold Bodog’s business to the Morris Mohawk Gaming Group of Kahnawake while retaining rights to the overall brand.

The rise of Curaçao

Curaçao was one of the first jurisdictions in the world to legalise online gambling in 1996. The licence was issued by master licence holders authorised by the authorities to licence operators and supervise their business ventures. The jurisdiction became known for a hands-off approach to regulation while still having checks and balances in place, and offering a respected licence for operators. But two years ago, cracks started to appear as the authorities were criticised for being too hands-off. Concerns over fairness, compliance and some cases of illegal activity began to surface, so the authorities knew they had to take action. A new gambling law was drafted, overhauling the existing regime and replacing the old master licence and sub-licence system.

The new rules will allow all existing licence holders to be transferred to a new regime.

By contrast, new applicants will apply directly with the Government and must meet slightly tougher requirements and criteria. The law is currently stuck in Parliament and yet to be fully approved and executed, leading to some uncertainty among operators. But we are certain that, once the law is in place, it will continue to be a top jurisdiction for gambling companies; and for those who are not convinced, there are plenty more to choose from.

The emergence of Anjouan

Anjouan has been offering iGaming licences since 2005, but it has found itself mainly under the radar, with few paying attention to what it provides. Yet in 2023, Anjouan emerged as a popular choice for iGaming operators, including both start-ups and more established brands. As Curaçao started undergoing regulatory reform and uncertainty about the new regime crept in, operators began looking at other options. The Anjouan Government, seizing the opportunity, streamlined the application process and focused on bringing in talent while also upholding standards.

The licence has become one of the market leaders over the last year due to its quick, simple and low-cost set-up time and relatively straightforward processes. This has particularly attracted start-ups or those moving away from Curaçao and still trying to figure out what to do next. Holding an Anjouan licence allows the site to operate legally and to engage with payment providers, banks and other regulated entities. It also serves as a trust marker for players, ensuring dedication to high standards, fairness and compliance.

In 2024, we expect to see the popularity of Anjouan continue to soar, solidifying its place among other well-known jurisdictions.

Game evolution

The gaming and content delivery landscape is almost unrecognisable today compared to 5, 10 or 25 years ago. We have gone from the era of CDs mailed to homes to the present-day world of the metaverse. Initially, gamers relied on physical media like CDs and DVDs, but high-speed internet brought in downloadable clients, enabling quicker access to games. The rise of smartphones revolutionised gaming further, with users accessing games through dedicated apps anytime, anywhere.

The metaverse concept has taken this evolution to new heights, where users can engage in immersive, interconnected experiences far beyond traditional gaming boundaries. When we see how far we have come in 30 years, we have to ask where we could possibly end up in another 30 years!

Technological advancements, secure payment methods and immersive gaming experiences have further contributed to the increasing prevalence of online gambling, making it a dominant force in the industry and reshaping how people engage with games of chance worldwide

The shift from land-based to digital

The gambling industry has profoundly shifted from its traditional roots in land-based casinos and betting parlours to a dynamic online landscape. This has followed trends in other areas as people now bank, shop, learn, chat and do everything online. The convenience of online platforms, coupled with the widespread availability of high-speed internet, has propelled the popularity of digital gambling. Players can now access many casino games, sports betting options and poker rooms from the comfort of their homes or on the go, transforming gambling into a more accessible and convenient pastime.

The online shift has also broadened the demographic appeal, attracting a diverse range of players who might not have frequented traditional gambling establishments.

Technological advancements, secure payment methods and immersive gaming experiences have further contributed to the increasing prevalence of online gambling, making it a dominant force in the industry and reshaping how people engage with games of chance worldwide.

Conclusion

It is impossible to put all the key moments of the last 30 years into just one short article. The iGaming sector is vast and every region has its own story to tell, but it is clear we have come a long way. From games on CDs and dial-up internet to live dealer games on mobile phones and the metaverse, the sector’s evolution has surpassed what many of us could ever have imagined, begging the question, where to go from here?

With roots both in Costa Rica and Vancouver, Fast Offshore has been in the business for 27 years and we are ready for whatever comes next. We know all there is to know about the legal, corporate and practical sides of setting up an online gambling company. We are also extremely knowledgeable about the new technologies of the day and how they intersect with our industry: crypto, video, blockchain, esports and more; we have got it covered.