What Was Online Gambling Like 20 Years Ago?

What was the dawn of online gambling like?

When it comes to history in general, we don’t know much about what it was like at the beginning. The Bible tells one story. Modern science suggests a different timeline and series of events.

Luckily, it’s beyond the purview of this blog to try to reconcile the two. It’s beyond my humble skills as a writer and researcher to make sense of all that.

But when it comes to online gambling, I know a little something, and I don’t mind writing about it here.

What People Liked About Online Gambling Is the Same Thing They Like Now

Here’s what people say when I ask them what they like about online gambling:

• They love how convenient it is.
• They love not having to spend money on a hotel stay.
• They love being able to wear what they want and stay home while gambling.

In other words, online gambling is all about convenience for the gambler.

Online casino gamblers then, like online casino gamblers now, might spend two hours or more a day with their hobby. I worked with a gentleman in the mid-2000s who lost a lot of money playing blackjack online, and I suspect he was spending three or four hours a night on the hobby.

And some gamblers are just introverts. They’d rather focus on their gambling without the added distraction of the other casino patrons, the dealers, or even the cocktail waitresses.

Online casinos are perfect for introverts, and they always have been.

Online Gambling Was Either Quasi-Legal or Illegal Throughout the USA

Online gambling has been legalized and regulated in various states over the past few years. It’s not legal everywhere in the United States, but, at some point, that might be the case.

But in 1997, you only had a handful of online casinos to think about – maybe three dozen or so. They were all operating offshore, and some of them were sketchier than others.

Some lawyers argued that the Wire Act made gambling over the internet a crime regardless of the type of gambling. Others argued that only sports betting was covered by the Wire Act.

And others argued that the Wire Act didn’t apply at all because the gambling was taking place in the country where the internet casino was located – usually Antigua or some smaller country with an open-minded government.

These legalities still haven’t been entirely resolved. In 1997, online poker wasn’t really a thing. Most people were playing casino games if they gambled online at all, while a lot of gamblers also bet on sports.

Since then, we’ve seen the arrest and prosecution of the owners and managers of major online poker companies like Absolute Bet, Full Tilt Poker, and PokerStars.

We’ve also seen the rise of daily fantasy sports.

Arguments for the role of skill in poker and daily fantasy sports affect the legality arguments, too.

And, lest I forget, the United States also passed the Unlawful Internet Gambling Enforcement Act, which made transferring money to and from a company for the purpose of online gambling a crime.

The Amounts Wagered Have Skyrocketed

I saw an estimate from 1997 that suggested that the size of the online gambling industry was $200 million a year.

That seems laughably small when contrasted with the size of today’s internet gambling industry. The current size of the market is $46 billion, which is an astounding growth rate.

But when you think about the rise in internet usage between then and now, it makes sense.

In 1997, I didn’t even own a computer, and when I got my first computer in 2000, I was still using a dial-up AOL connection. With a dial-up connection, downloading a single song from Napster might take an hour or two.

Now I stream music through Spotify for a low monthly fee on my phone. I can’t even imagine needing to download a song.

More About the Amounts

When I did the research for this post, I found an article in the Washington Post from 1997 that explained the then-new phenomenon of online casinos and gambling.

They explain how a new customer for a site starts his account with a credit card and a social security number. That’s changed since then. You’ll now need to provide documents proving your identity and age. And most credit cards decline online gambling transactions, so you’re left looking for alternative deposit methods. (Cryptocurrency is becoming increasingly popular.)

The article goes on to discuss the minimum deposit, which they suggest is between $100 and $500.

Modern online casinos have a much wider range of deposit amounts. I’ve seen a number of online casinos where you can get started for as little as $10 or $20. Many of these same casinos allow you to deposit up to $5000 (or more) at a time.

I’m not sure if you could try the games for free in 1997 or not, but if not, this is a major change. All major online casinos allow you to try most of their games in free-to-play versions.

Many people even limit their play at games like blackjack and slots to the free versions. Since no money’s in action, the free versions of these casinos are – as far as I know – completely legal throughout the United States.

Jay Cohen Was a Big Deal in the Industry at the Time

Jay Cohen launched one of the earliest online gambling companies in 1996, the World Sports Exchange. In 1997, he was still doing interviews with various media about how gambling on his sites were legal because they were located offshore and US laws didn’t apply.

At that time, his company had about 400 customers. Imagine a time when an offshore sportsbook would reveal how many customers they had to a newspaper?

That theory got put to the test in 2000, when Cohen was convicted for violating the Wire Act. He was in prison until early 2004.

One of the morals of this story is that you shouldn’t brag about violating a federal law on 60 Minutes. You leave the authorities little choice but to pursue charges against you when you taunt them on a major news program like that.

In violation of his parole agreement, Cohen went back to work running WSEX until the site announced it was going out of business in 2013. Bettors who had accounts at the site never got their money back, and Cohen retired to San Francisco with millions in secret bank accounts in other countries.

The Pros and Cons of Online Gambling Haven’t Changed

Opponents of online gambling then argued that the ease of access and the probability of cheating were so great on the internet that the activity should be illegal.

The same arguments against internet gambling are being made today, although there’s a growing realization that legalizing and regulating these companies might be a better strategy for protecting consumers.

Proponents of online gambling point out the size of the lottery industry throughout the United States and how hypocritical it is to oppose online gambling when the lottery is a multi-billion dollar industry that’s widely accepted.

The kinds of complaints generated then are similar to the complaints generated now, though.

They mostly have to do with the difficulty of getting paid off when you’ve won.

Conclusion

What was online gambling like 20 years ago?

It wasn’t too different from online gambling today. It’s still mostly about companies operating offshore, many of which have questionable business practices. Smart gamblers then, as now, understood that reputation was more important than anything else when it came to choosing who to do business with.

The biggest difference is that multiple states have legalized online casinos and now offer multiple opportunities to gamble with protection from shady companies by appropriate government entities.

The problem is that this isn’t a nationwide thing. In most states, you still must deal with an offshore company if you want to place a bet online.

This is bound to change over time, too.

There’s too much money involved for it to not change.