Industry Insights

The Canadian gambling market developed over decades as the practice became culturally accepted across the country, while technological advancements expanded the reach of the games.  As new real-money games were created, gambling tycoons created casinos to profit from the games within one gaming facility.  The casino was later transitioned into the digital era when gaming firms developed online casinos to broaden their reach across the globe.

Similar to regular casinos, online casinos must acquire a gaming license from a national gaming regulator.  In Canada, the federal government allows online casinos to operate within the country, and players largely responded to the freedom of betting in digital form.  Provinces later recognized the amount of money to be made in regulated online casinos, which lead to the creation of provincially regulated online casinos.

The market continues to expand year over year, and this infographic explains where online gambling began, where it is now, and where it will end up in the future.


Industry Insights

The History of Online Casinos

The concept of online casinos first came around in 1994 when Microgaming created the first ever casino software. At this time Microgaming was a small software developer. To achieve their dream of opening on online gaming site the company called on the well-known software developer Cryptologic.

Cryptologic was then already an expert in software security and the company’s expertise was the missing piece of the jigsaw. Microgaming needed the ability to incorporate safe transactions online. This was central to the proper functioning of a new online casino operated over the internet and transmitted to the World Wide Web. Without the financial side of the online casino platform working properly, gaining consumer trust would have made sure the online gaming industry would fall over right there and then.

Financial Trust Issues Resolved

For online consumers to trust online gambling sites, the financial side of the website had to be perfect. Microgaming called on Cryptologic’s intelligent security software and network teams who were able to make this happen. It was the security systems added to the Microgaming software that made the first online gaming sites possible.

Online Casino Financial Security Today

Since Microgaming and Cryptologic’s dual online casino platform, we have seen numerous financial software companies come into the online market with new ways to deposit and withdraw your cash online. In addition, we have seen a massive rise in internet security systems using SSL certificates to guarantee safe transactions. Not all of this is down to online casinos, but rather it is down to the rise of online shopping and overall e-commerce websites.

With so much of the internet relying on safe ways to exchange cash between consumers and businesses as well as the B2B markets also relying on the same ability to make online transactions, there also been a considerable rise in security companies that specialise in encrypted tunnels that allow connections to their sites that have access to huge financial databases.

Now transactions can be made using banks that are located in numerous countries. These financial transaction companies such as Olorra Management, also control transaction in foreign currencies. As a result, online casinos can accept members from around the world as long the online casino is acting in accordance with local laws and gambling authorities licencing procedures.

The First Online Licencing

It was Antigua and Barbuda that became the very first place to allow online gaming companies to apply for a licence and operate online casinos. The licencing came about after the Caribbean region passed an act known as the Free Trade and Processing Act.

The licences opened the doors for companies like Microgaming to finally release the first much anticipated online casino software that could be accessed on a global basis by those that had access to the internet. At the time, the internet was fairly slow and it was still very much a new concept to many households, but that didn’t stop real money online gaming from becoming an instant hit with a super-fast growth engine.

First Online Casino Launched in 1994

Microgaming is said to have launched the first ever online casino in 1994, but this was in fact not a fully functional casino until 1995. This is because the casino still needed time to properly test pilot and develop player tracking and casino management software via its 1994 ‘BETA Version’. Nonetheless, the BETA version still meant players could deposit cash and play the online real money games that were available via a downloadable software package provided by Microgaming.

This software was released with the casino known as ‘The Gaming Club’, which was soon challenged by the same company that developed their security system; Cryptologic. Cryptologic licenced all their software with a company called Wagerlogic. This meant that the second casino to launch as a fully-fledged commercial online casino was by Cryptologic; the online casino was called Intercasino, which is still around today.

Despite Intercasino not being the first online casino, there is some argument that it was the first fully commercial casino to have been launched because Microgaming had only developed the software and not the management systems, which were created by Cryptologic.

The Rise of Online Casinos in the mid to late 1990s

There is no doubt online gambling become popular extremely quickly since Cryptologic and Microgaming came to light. Between 1996 and 1997 the number of online casinos that players could register for had risen from around 15 to as many 200. There were plenty of entrepreneurs and business investors out there that saw the opportunity to make money from the online casino scene and quickly jumped on the bandwagon.

In 2001 came the Birth of the Maltese Lotteries and Gaming Authority

One of the most popular and long established online gaming licencing committees came onot the scene in 2001. The Maltese Lotteries and Gaming Commission is currently the most trusted online licencing body today. Nevertheless, their long reign is now coming under threat due to the new rules in others countries in respects to real money gaming online.

For example, the USA, UK, Spain, Sweden and Italy have all brought out their own laws that state that any online gaming companies that want to operate their online casino or any other kind of real money gaming site must purchase a local license. The governments’ angles on this are player protection, which to some extent is true, but we cannot ignore the huge amount of money made through licencing fees that are up to $20 million in the US and UK.

A Recent Change in Licensing

With recent adjustments to the way online gambling licencing by local governments has been enacted, there has been a large dent into the future of the long established licencing committee of the Maltese Lotteries and Gaming Authority. In previous disputes between players and casinos, due to the casino’s licence being issued by the Maltese licensing authority the only way the player could legally challenge the online casino would be to travel to Malta and go through the expense of taking the company to court from there.

Also, another problem has arisen over the years due to financial control. One of example of this financial problem was proved in the US. In 2011 there was Black Friday that targeted mainly poker sites, but also hundreds of online casinos that were not keeping the cash players deposited in a separate account. Instead the companies were using player account money on other investments within and outside of the online gaming markets. The same policies were also being applied by many other online casinos on a global basis. As a result, the number of complaints regarding apparently unethical financial practises were on the increase, which was invariably caused in tandem with the ever increasing number of online casinos.

The line of thought behind this financial fiasco was that if the online casino were to go bankrupt, there would be no way for the casino to pay all their players back quickly enough or within a reasonable amount of time because a lot of their deposited cash would be tied up in investment plans. Also, should an investment go wrong, then some players stood the risk of never getting their money back.

It was both the legal implications behind the ability to make a valid or affordable dispute against the online casinos and the financial investment fiasco made by online casinos that meant governments had the perfect reasons to step in and create local licencing and taxation laws. This has all been done under the guise of player protection. On the positive side, now in many countries player cash balances are fully protected.

Licencing stipulates that the combined cash total of all player accounts must be kept in a separate bank account. Therefore, even if an online casino was to go bankrupt, the cash in the separate account would be 100% reserved for players, so now no matter what happens to the casino, players are guaranteed their cash back.

In addition, legal disputes would have to be contested by the casino from within the country they are licenced; therefore, if you are a British citizen and want to make a legal dispute, the likelihood is that the online casino has a British licence and so the case would be heard in the UK.

Online Casinos Today and Positive Brand Names

Today, the online casino market is now a tough market to crack with many of the big names in deals with software developers that have saturated the casino platform market. There have also been many unethical online casinos that have come and gone.

On the ethical side, only the biggest and most honest brand names have survived the cut. They have profited from honesty and today very few unethical online casinos if any at all are remaining in the online world of gaming. Only those that have proper licencing, good feedback and word of mouth online and proper financial facilities have managed to build successful brand names.

Now, in today’s online casino market, the unethical online casinos have almost all been wiped out due to complete more localised changes in licencing. Consumer trust is at an all-time high and players are being paid instantly for big cash wins.

New Technology Gives Players the Ultimate Gaming Experience

Globalisation is largely down to the rise of the World Wide Web and the global reach of the internet. This has meant more companies have been able to merge, become acquisitioned by bigger real money gaming providers and knowledge sharing is much easier than it has ever been in the past.

Consequently, the technology behind today’s online casinos far surpasses that of the past. In the past you would need some kind of casino software to operate games locally on your PC, but nowadays the concept of downloading casinos is one of personal choice and appears to be less popular than using downloadable versions.

It is the new HTML5 web based instant play casinos that are the most popular. With technology so advanced today, the graphics, 3D effects, sounds, game speeds and animation are fully controlled by intelligent online casino platforms.

Furthermore, the new craze is the third party interfaces. For instance, Quickfire run by Microgaming will allow games from Amaya Gaming, NextGen, NYX, Quickspin and other companies to piggy back onto the Microgaming casino system. This means on a Microgaming platform, you will see games from NYX and vice versa. This is a brand new and exciting concept.

The Rise of Real Money Mobile Casinos

Real money mobile casinos are now the latest fad. Before smartphones online casino companies were already tapping into ways to stream their games to mobile phones. However, then came smartphone technology, touchpads and 2G, 3G and now 4G internet connections.

This new technology cracked the market bringing to the table a brand new way to play real money casinos while on the move. The main reason for this was because HTML5 and instant play software was created. Mobile devices do need to download anything, and instead the mobile casino member only needs to follow the shortcut to the casino, log on, and play any instant games available to them.

Right now there is a slight difference between the number of games available via Apple’s iOS and the Android platform. Android’s easier Java platform has made it a lot easier for designers to replicate existing desktop games and create dual desktop and mobile releases for new games. This has meant Android boasts the largest number of real money games at present, but iOS is now in full swing and developers are closing the gap.

Another recent new comer to the market is the Windows 8.0 mobile operating system. Generally found on LG and Nokia phones, the call for Windows 8.0 designed real money games to be developed has finally been answered meaning there is now almost no operating system with the ability to connect to the internet that cannot take advantage of real money online gaming.