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Online Gambling - Industry Timeline

Below is a brief yet instructive chronology of Internet gambling's evolution. Over the past three years, the industry has experience a HUGE upsurge in popularity and been the subject of several major legal battles, so events during this time are a bit harder to identify and comment on. Still, as always, we've delivered as much of the goods as humanly possible - and, hopefully, without sounding too much like some octogenarian history prof:


- The Free Trade and Processing Zone Act, 1994 is passed by the government of Antigua-Barbuda. Many online casinos and sports books today operate under licenses granted pursuant to this legislation and Antigua-Barbuda remains one of the online gambling industry's most popular licensing jurisdictions.
- Microgaming, one of the internet casino industry's first and largest software developers and suppliers, is founded.


- CryptoLogic is founded with the goal of developing software that can securely and effectively process online monetary transactions.


- Boss Specialtidningar AB, Boss Media's parent company, begins to develop a system for casino operations on the Internet.
- Microgaming sells off existing casino operations and concentrates on developing of Internet casino technologies.
- CryptoLogic begins developing the first eCash and gaming application.
-In October, InterCasino goes online, claiming to be the first internet casino to accept a real money wager online.


- Boss Casinos system-development work is transferred to Boss Media AB. The game server system is located in Antigua-Barbuda, one of the few countries in the world willing to sanction Internet gambling.


- Microgaming launches Cash Splash, the Internet's first progressive jackpot slot.
- Sen. Jon Kyl (R-Ariz.), the U.S. Congress's primary opponent to online gambling, introduces the Internet Gambling Prohibition Act, designed to make it illegal for any company to offer an online gambling product to U.S. citizens. The bill eventually fails to pass.
- Frost and Sullivan report that online gambling industry generates $834.5 million in revenue.
- Boss Media signs its first license agreement with an external customer.


- Sen. Jon Kyl (R-Ariz.), reintroduces a revised Internet Gambling Prohibition Act. The revised bill also fails to pass.
- Microgaming forms a deal with Big Five auditing firm Price-Waterhouse-Coopers to review and report on casino payout percentages.
- The first Australian government-licensed internet casino,  Lasseters, goes online. Lasseters operates under license of the Northern Territory, which moves quickly to legislate for and offer licenses to online casinos.
- As of September 1999, Christian Capital Advisors estimates that there are approximately 700 casinos taking money bets over the Internet.
- Boss Media takes the online gambling world by storm with the release of its new gaming software platform with multiplayer functionality, allowing multiple players to play the same game at once and chat  with each other at virtual-gaming tables.


- The Australian federal government passes its Interactive Gambling Moratorium Act, making it illegal for any Australia-based online casino or sports-book firms not already licensed and operating prior to May 2000, from operating. Lasseters Online is the only Australia-based Internet casino able to operate under the new legislation.
- Rep. Bob Goodlatte (R-Va.) introduces a new Internet Gambling Prohibition Act to the U.S. House of Representatives. The bill fails to attract the required two-thirds majority vote to pass.
- CryptoLogic's annual report claims that the number of customers who have used its electronic payment system for online betting has climbed to 680,000 since operations began in 1996.
- U.K. sovereign territories Gibraltar and the Isle of Man offer online sports betting licenses.
- Cryptologic lists on the Nasdaq National Market under the symbol CRYP.


- In March, the results of a survey published in PRNewswire claim that around 8 million people have already gambled with real money online.
- The Nevada legislature passes a bill opening the way for licensed online casinos to operate out of Nevada. It is estimated that it will still be a year or two before the U.S. Department of Justice will issue the first licenses.
- An online casino player wins $414,119 playing a slot game at a Caribbean online casino's version of The Sands. This is the largest internet progressive jackpot win to date.
- Alderney (British Channel Islands) passes legislation for Interactive Gambling, and the Alderney Commission is now in a position to accept license applications.
- "The Gambling Review Report" is released in the U.K. Subject to rounds of negotiations before its recommendations become law, the review encourages legalizing all forms of online gambling, which would make Britain one of the few OECD countries to allow it.


- U.S. Rep. Bob Goodlatte (R-Va.) sponsors a bill that updates the Wire Act of 1961 to cover Internet betting - and online casinos in particular - is passed unanimously by the U.S. House Judiciary subcommittee on crime. The bill now moves to the full Judiciary Committee for consideration. If passed there, it will head to the House and then the Senate for final approval.
- Online gambling expenditures reach $4.5 billion, more than quadrupling the total from only three years earlier ($845 million).
- In May, the first ever multimillion-dollar online casino jackpot is won. A lucky player playing the Microgaming progressive slot game Major Millions at Captain Cook's Casino wins a massive $1.59 million.


- eCOGRA (eCommerce and Online Gambling Regulation and Assurance) is established to set standards and make online gambling safer. Arguably, this point marks one of the first moves towards regulation as member sites must follow strict safety and security guidelines.

- Yet another anti-gambling bill is passed by the U.S. House of Representatives. This bill makes it illegal for payment-processing companies (credit card, bank wire, etc.) to facilitate online gambling transactions.

- Chris Moneymaker shocks the poker world and takes home $2.5 million as winner of the 2003 World Series of Poker after having practiced and prepared exclusively online.

- Playtech launches "Live Gaming" a realtime video-streamed gaming concept featuring live dealers with whom players can play and chat one-on-one.


- The World Trade Organization sides with Antigua-Barbuda in its WTO case against the U.S., ruling that U.S. laws concerning online gaming are unlawful because the U.S. government allows American companies to operate online horserace-betting sites and land-based casinos.
- Microgaming's game library exceeds 250!
- The poker craze takes hold as a result of the online craze and its popularity continues its semi-surprising ascent through the emergence of several TV programs and prominently advertised tournaments featuring celebrities and amateurs.

- In spite of relentless controversy concerning the legality of online gambling within its borders, the U.S. leads the world in the number of online players, representing more than half of the overall market. According to Christiansen Capital Advisors, 51 percent of the $8.5 billion in online gambling revenues generated worldwide come from the United States.


- Microgaming's progressive jackpot total exceeds $160 million and has over 5,000 winners.
- Playtech launches the new major version upgrade for its gaming platform. Codenamed "NG," it includes new games, improved functionality and first-to-market features such as simultaneous game play. The enhanced technology platform takes advantage of the latest Web standards and technologies that are widely used in advanced Web-based systems.
- PartyGaming (owner of biggest online casino site - PartyPoker.com) floats on the London Stock Exchange, becoming the biggest financial float in the city in over four years. The move eventually propels PartyGaming into the FTSE 100.

- A Florida resident wins $1.96 million while playing the Gold Rally slot at Carnival Casino, setting a new record for the highest paid progressive online jackpot.


- Estimates place the number of active online-gambling sites at around 2,300 - an impressive figure, considering the industry began only 12 years earlier.

- PartyGaming moves to acquire EmpirePoker.com from Empire Online. Rumors spread that UltimateBet's parent company - also listed on the London Stock Exchange - as well as PokerStars and Poker.com are considering going public.

- Playtech's shares are successfully admitted to the AIM market of the London Stock Exchange, valuing the company at approximately L548 million. Trading under the ticker symbol PTEC.L, the placing raises approximately L265.2 million gross through a placing of 103,142,466 ordinary shares. Such shares have been placed with a broad range of international institutional investors, including those from both the U.S. and the U.K. - a clear endorsement of the company's offering, business model and prospects.

- The U.S. House of Representatives backs legislation that would effectively prohibit Americans from gambling online. The Republican-sponsored bill, which passed by a vote of 317-93, would make it illegal for U.S. banks and credit-card companies to make payments to online gambing sites. Before becoming law, the bill must successfully pass through the Senate, which at the moment, appears increasingly unlikely.

- In July, U.S. federal agents, citing the U.S. Wire Act, arrest BetOnSports CEO David Carruthers in Dallas, Texas while he is changing planes. Carruthers and his company are suspected/charged with tax evasion as well as several other offences. BetOnSports is prohibited from taking bets from U.S. Customers (the source of 80 percent of their revenues), and Carruthers' arrest, at least initially, riles the online-gambling community.

- In September, the Senate passes the Internet Gambling Enforcement Act 2006 (H.R. 4411) after the bill is attached to unrelated legislation (Safe Ports Act) on a Friday night just before Congress breaks for its election recess. President Bush signs the bill into law on October 13. As a result of the legislation - which has exemptions for horseracing, state-run lotteries, and fantasy sports - American financial institutions are banned from processing any transaction with an online gambling operator. Big, publicly traded companies like Partygaming and 888.com close their operations to American players and the industry's revenues take a major hit. It's the end of the world as we know it....


- In January, the UIGEA grows fangs. NETeller, the online gambling industry's most successful wire-transfer service, crumbles when founders Stephen Lawrence and John Lefebvre are arrested in Manhattan and charged with money laundering. NETeller pulls out of the U.S. immediately, losing two-thirds of its business in the process, but offshore operators like Bodog, FullTilt and Pokerstars remain defiant. The U.S. Department of Justice subpoenas foreign investment banks HSBC, Credit Suisse, Deutsche Bank and Dresdner Kleinwort for information concerning online gambling investments. Meanwhile, all 16 German states vote to illegalize the use of non-German gambling firms within the EU member state's boarders. The pro-gambling world fires back with a WTO ruling that the UIGEA constitutes interference with Antigua and Barbuda's online horseracing books, which it ruled in 2005 were not to be messed with. Six days later, the EU takes a similar crack at the U.S., filing suit with the WTO court for the UIGEA.

- In February, USA Today reports that some 2,300 online books and casinos have pulled out of the U.S., while customer accounts with BetOnSports and NETeller have been frozen until further notice. The money is effectively "left in limbo." Chinese, Canadian and Turkish regulators jump on the anti-online gambling bandwagon, forcing NETeller out of their countries as well. Alberta lawmakers deny that their research into online gambling belies an attempt to legalize online gambling, and China announces that it has successfully busted over 1 million Internet gamblers. Way to kiss up to the Americans, guys!

- In March, the European Court of Justice rejects Unibet's request for immediate access to Sweden's gambling market, and the European Free Trade Association awards the right to operate gaming machines to a Norwegion state-run gambling monopoly. Despite their WTO suit, European authorities become complicit in worldwide online-gambling bans - but at least they didn't start the fire....

- In April, U.S. congressman Barney Frank (D-Mass.) kickstarts legislative attempts to overturn the UIGEA, proposing the Internet Gambling Regulation and Enforcement Act. Two weeks later the British Medical Journal argues that banning online gambling is good for Parkinsons patients, and Taiwan officials bust the largest Internet-gambling ring yet.

- In May, Papua New Guinea's parliament enacts laws that legalize Internet gambling within the South Pacific nation, and U.S. Rep. Shelley Berkley (D-Nev.) introduces the Internet Gambling Study Act to research the "effects" of online gambling. The U.S.Department of Justice, meanwhile, indicts seven individuals and four companies, including BetUS, for illegal Internet-gambling practices.

- In June, the Interactive Media Entertainment and Gaming Association sues the U.S. government in a New Jersey court to stop enforcement of the UIGEA. U.S. Rep. James McDermott (D-Wash.) admits that the UIGEA has been "ineffective," introducing the Internet Gambling Regulation and Tax Enforcement Act in the U.S. House of Representatives, and Rep. Robert Wexler (D-Fla.) instigates attempts to legalize "games of skill," proposing the Skill Game Protection Act. All the while, congressional sentiment seems against fixing the UIGEA. In a vote of the House Financial Services committee, the Payment Systems Protection Act of 2007 stalls when members’ votes split 32 for and 32 against. Still, the committee seems willing to consider the bill again, hearing formal arguments on whether Internet gambling can be successfully regulated.

- In July, NETeller founder John Lefebvre pleads guilty to conspiarcy to promote illegal gambling charges. British interests still running the company agree to pay $136 million to avoid further U.S. prosecution. In other news, operators in the Philippenes get around Chinese bans by creating an online system in which remote players direct and fund the bets of proxy players at land-based casinos, and "Second Life" operator Linden Lab shuts down the virtual world's independent casinos. All this is overshadowed, however, when Antigua and Barbuda ask the WTO to award $3.4 billion in reparations from the U.S. President George W. Bush immediately withdraws the U.S. gambling sector from the WTO.

- In August, AOL signs a deal with German operator FLUXX to begin offering bookmaking services to non-American clients from offices in the U.K. Ironically enough, Labor instigators in Parliament are busy at the same time flooring legislation that would crack down on Internet-gambling operators from outside the Britain. Meanwhile, South African lawmakers look into regulating online gambling, and the Association of Tennis Professionals launches an inquiry into possible Internet-tied match fixing on the part of Russian star Nikolay Davydenko.

- In September, a report released by the U.K. Gambling Commission shows that participation in gambling overall has not increased  due to the advent of online casinos. U.S. Rep. Barney Frank's UIGEA nemesis Rep. Spencer Bachus (R-Ala.) had stated otherwise and takes heat in the press for his misquotes. Parliament ratifies the Gambling Act, which allows Internet gambling providers the right to advertise on British TV. Regardless of the Bachus hooplah over the pond, U.K. cirtics maintain that the new law will increase the number of problem gamblers.

- In October, business analysts report better-than-expected earnings for operator Sportingbet despite the UIGEA and world financial troubles. U.S. authorities at the Federal Reserve and Treasury unveil rules to govern financial institutions in Internet-gambling transactions: Basically, block them all.

- In November, Austrian online operator Bwin wins its case with the Administrative Court of Appeals in Hessen and is again allowed to offer online gambling services in the German province.

- In December, major online-gambling software developer CryptoLogic buys into Mikoshi Studios for $6.1 million in a bid to expand into cellphone gambling. Yahoo and Google settle with the U.S. government for their role in the Internet-gambling market to the tune of $31.5 million - still, this isn't enough to settle the American government's debt to the EU, which though unreleased at this point, is estimated to be in excess of $100 billion.


-  In January, Germany renews its ban on outside gambling operators (including Internet-gambling firms), causing a contradiction in Hessen legislative law and Hessen jusidicial precedent; Bwin steps up its attacks filing suit in several more German states. Stateside, Republican primary candidate Mitt Romney's thumper "Lucky Lou" Sheldon catches flack from the media, which charges that his Traditional Values Coalition received a $25,000 donation from eLottery to oppose the UIGEA. If that's not enough, though, eLottery's middle man was none other than - you guessed it - Little Jack Abramoff. The connection with Mitt is tenuous but his polls still slip as a result. Who says online gambling doesn't have a moral impact, eh?

-  In February, the Associated Press reports that the NBA has sunk $330,000 into lobying to keep the UIGEA in full force. In Europe, Belgium prepares to open its online-gambling market.

- In March, under pressure from Congress, the Bush administration is forced to admit the amount it paid in reparations to Antigua and Barbuda: $21 million. The EU launches a full investigation into U.S. Internet-gambling laws - as if anyone could really make sense of it.

- In May, Turkish officials detain two London-based employees of Sportingbet. Where's a good Churchillian invasion when you need it?

- In August, 888.com and other Internet-gamblin operators continue to report higher than expected corporate earnings - meaning, according conventional wisdom, world financial markets are in for a major slump.

- In September, Bwin loses two court suits against the German outside-gambling-firm ban, the first in North Rhine-Westphalia and the second in Lower Saxony. The judge in the Lower Saxony hearing, however, allows for an appeal of his ruling. In the U.S., Kentucky lawmakers demand 141 gambling sites block the state's residents or forfeit ownership of their URLs, and Judge Thomas Wingate orders the state seize the Web addresses until the dispute is resolved. The Kentucky action seems like a moot point, however, as Barney Frank finally gets the PSPA through the U.S. House Finance Committee, before turning his attention toward the foundering U.S. economy.


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