The iGaming industry, which is made up of online sports betting, casinos, poker and bingo has grown dramatically in the last 25 years. It started life in the mid-1990s, just as the personal computer was arriving in most people’s homes and the adoption of the internet was picking up pace.
It relies heavily on technology to exist, just the same way that eCommerce and other online-only industries do. The operators in the industry have always been quick to adopt any new technologies to continually develop and improve their offerings to customers.
Unlike eCommerce though, the iGaming industry is a lot more regulated, which creates a symbiotic relationship between technology and legislation. The two factors need to be present to make the industry work. If either is removed, operations cease.
The Traditional Casino Industry
The iGaming industry owes its existence to the traditional casinos, the types you find along the Las Vegas strip, with table after table of roulette, baccarat, blackjack, and poker. The casino industry has been using technology throughout its history.
Modern casinos contain a network of cameras that allow them to cover every single millimeter of floor space, from every angle. This allows them to see everything that goes on, prevent people from cheating, and build profiles on each customer.
This profile can be used for security purposes and also to offer the customer complimentary drinks, food, and even room upgrades to encourage them to stay in the casino longer.
The casino industry has also used technology to improve its slot machines. This includes preventing them to be hacked so that they pay out more than they should. This has seen them move from mechanical machines with physical moving parts, to video slot machines that are completely digital.
The added benefit of this is that the video slots can include new features like bonus rounds, that move away from the traditional slot reel format, as well as huge progressive jackpots. This allows the manufacturers to be more creative, making more engaging games that encourage customers to play for longer.
This use of technology can be seen in the iGaming industry today.
Legislation and Technology in Perfect Balance
Technology is not the only enabler of casinos though. The traditional casinos in Las Vegas and elsewhere in the world could not exist if it wasn’t for the correct legislation. Casinos only began to pop up in Nevada after the state legalized gambling in 1931. Elsewhere in the country, it was not possible to open a casino, which created a monopoly for Las Vegas.
Card games and wagering are not new. The Romans were known to enjoy betting on sports and dice games, while playing cards have been traced back to the Chinese Tang Dynasty, before 1000 AD. However, these games were played informally, and commercially operated casinos do not go back that far.
The same exists in iGaming. The 1994 passing of the Free Trade & Processing Zone Act in Antigua and Barbuda made it possible for casinos to operate on the internet. Operators would require a license before they could open, but it fired the starting pistol on the race to be the first online casino.
Before this law passed, the technology for iGaming already existed. The internet and computers had been in homes for several years and online card payments had been made possible since 1994 thanks to the Stanford Federal Credit Union, although it would also have been possible to let users make deposits over the phone or via the mail.
For context, in 1994 Amazon began operating and Pizza Hut had launched an online system for people to place orders; demonstrating that the technology existed.
The First iGaming Sites
The first iGaming sites launched in 1995 and were primitive in comparison to modern-day versions. This is the same for most websites back then, as advanced web design techniques did not exist at the time.
However, operators quickly began offering better graphics and more interactive features as consumer internet speeds increased and personal computer technology improved.
The Mobile Gaming Revolution
The biggest disruption to the iGaming industry since its inception came in the late 2000s and early 2010s when the first smartphones hit the market. These new devices had as much processing powers as many personal computers, meaning they could be used to undertake most of the tasks that previously required someone to be sat at their desk.
There are more than 5 billion mobile devices in circulation today, accounting for more than two-thirds of the entire global population. Recognizing the opportunity that this presented, businesses began launching mobile apps to provide high quality, native experience to their services. Now, we can do almost anything from our smartphones, including shopping, trading on the stock market, video streaming, and navigating.
The iGaming industry was quick to spot this opportunity too, with many launching mobile sites and mobile apps that allowed consumers to play games in a more convenient way. Instead of being chained to a computer, players could now enjoy a game of poker during their morning commute, or while waiting in a queue, all in a format that’s optimized for their Android or iOS device.
Significantly, mobile devices also gave internet access to demographics that previously did not have regular access to a computer. For example, many sub-Saharan African countries did not have wired internet infrastructure, so wireless internet through 3G enabled smartphones was the first time they had could get online.
This has seen large betting markets in countries like Nigeria open up, as the tech-savvy population look to iGaming as a new way to bet on sports.
Removing Legislative Approval
The rapid growth in iGaming came to a sudden stop in the United States after the passing of the Unlawful Internet Gambling Enforcement Act of 2006. It didn’t ban wagering online but made it much more difficult to operate. Several sites closed their US operations as a result, while others remained open for business.
Over time, more legislative changes and court rulings helped to make a more friendly legal environment for iGaming operators, which helped them to grow again.
In 2018, more changes made it possible for individual US states to set their own rules for online sports betting. This has seen several new brands launch sportsbook services in states like New Jersey, with many more states expected to follow in the coming years.
Video Streaming and Live Casinos
The next major technological advancement came in the form of video streaming. Sites like YouTube and Vimeo, and then services like Netflix and Amazon Prime, made video streaming popular among consumers.
The iGaming industry was quick to adopt the technology too. Live casinos, where players interact with a real-life dealer who deals cards or spins a roulette wheel in a video feed, have become a popular offering from operators.
The technology has allowed the land-based casino experience to be brought to consumers who may not live near or be able to travel to a casino.
Virtual Reality Casinos
For most of the last decade, virtual reality technology has been advancing quickly. Major technology companies like Microsoft, Sony, and Facebook have all been investing heavily in VR, producing headsets for PC, mobile devices and the PlayStation 4.
iGaming brands have also been working to integrate VR into their product offering. Many now offer virtual reality versions of their live casinos, creating a fully immersive version that increases the level of realism. These work in the same way as the other live casino games, but have a 180 or 360-degree video feed that lets the player look around, just like they were in a casino.
What’s the Future for the iGaming Industry?
It’s difficult to predict what will be the next big technology in the industry. The first online casinos used technology to bring their games to a whole new group of customers who either couldn’t or didn’t want to visit a physical casino.
Smartphones and tablets were just as revolutionary in the way that they freed people from their computer desks, allowing them to play their favorite games from anywhere and at any time.
In both of these instances, the technology made it easier and more convenient to play casino games. However, live casinos and virtual reality add an element of complexity. They are a good product for some more hardcore customers, but it’s unlikely they’ll make much of a difference among casual gamers.
Instead, the future of the iGaming industry will come from a technology that adds even more convenience for players. Only time will tell what that technology will be.
Meanwhile, further growth to existing operations will come from further legislative changes that allow for iGaming companies to operate. It is expected that significant growth will come from the United States, with others keeping an eye on Asian countries like Japan who may also make similar moves in the coming years.
It is clear that the relationship between technology and legislation is crucial for iGaming brands to succeed. They require these two macro-economic factors to be right before they can begin to operate successfully.