Online Casinos, Gambling, Poker and Sports Betting Magazine


In Case You Didn't Know

Interactive gaming is a multi-billion dollar industry, and represents at least 2% of the entire worldwide gambling industry in terms of revenue. The major players in the online gaming industry are ranked among the largest companies in the world in terms of market value, and the revenues of even modestly sized online gaming companies would make the majority of the companies listed on NASDAQ green with envy.

The pattern of development for online gaming is not unlike the pattern of development for Las Vegas casinos in the sense that the early days were synonymous with profiteers gathering supernormal profits in an industry that was yet to be defined by legislation and regulation. But as the industry grew and demonstrated irrefutable potential as a lasting and lucrative part of the entertainment sector, the original profiteers were replaced by clever entrepreneurs who defined the standard for interactive gaming entertainment. Finally, the industry, having been defined, has seen a raft of IPOs, and has formalized into a very corporate animal with professional management with track records from blue-chip companies. As you can see, the online gaming sector followed in the exact footprints of Las Vegas, completing the route that took Las Vegas nearly 100 years in only ten.

The earliest functional casinos online started in 1995, helped by the advent of Microsoft Windows 95, which was the first operating system by Microsoft to take full advantage of the web. The first casinos, many of which still operate today, pioneered several of the technologies that make the web what it is today. For example, online payments were pioneered, and are still driven forward, by online gaming companies. Online advertising, like banners, popups and popunders, were given life by an industry that paid premium rates for exposure. Why were online gaming companies so instrumental in the development of the web? It’s simply because for many years they were one of the only profitable businesses on the web.

The dot com bubble burst, but the financial tragedy didn’t affect online gaming. Why? Because online gaming companies were generally privately funded businesses, so they were not subject to devaluation in share prices when the market turned its back on anything online. Additionally, online gaming businesses, being profitable in their own right, were able to take advantage of the depressed advertising rates that were the direct result of the dot com craze going south.

About the time of the dot com crisis on Wall Street, online casinos were being taken over by experienced entrepreneurs. Since there were relatively few barriers to starting an online gaming firm, they opened by the fistful. This period represented a massive expansion in the number of online gaming firms on the web, and further illustrated that the internet was truly an old-economy medium, to which age-old principles of economics applied, and not the blue-sky, futuristic medium it was considered in the early days of the dot com craze.

As of the last two years, online gaming has increasingly steered towards the formalized corporate structures that dominate most other mature industries. As online gaming firms can afford to attract top management from blue-chip brands, and as the stock markets begin to recognize the massive potential of online gaming firms, those of influence and power persuade legislative policy to lean toward the regulation, rather than the prohibition, of online gaming. This is indeed the case in most of the world, where stockmarkets, particularly in the UK, embrace online gaming companies like the flavor of the month.

Looking back at Las Vegas, we can easily draw a comparison to the Wild West days of opportunistic casino management, to the Wynn days of entrepreneurial vision, to the era of corporate Las Vegas in which we currently live. The evolution of online gaming may have happened at ‘net speed’, but the online and land-based casino industries followed the same path and passed the same landmarks along the way.
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