Internet Gambling - Internet Gambling Becomes Big Business

As soon as the Internet was opened up to commercial enterprise, Web sites were developed to sell goods and services to the public. According to statistics available at the Pew Internet & American Life Project Web site (www.pewinternet.org), as of February 2004, 65% of American adults who access the Internet had purchased a product online.

There is no consensus on when the first Internet casino began operating and who started it. However, it is generally agreed that the first online casinos began operating sometime in 1995 or 1996. Among the first was Intercasino, based in Antigua. This small Caribbean island has positioned itself as one of the leaders in Internet gambling. In 1996 the country legalized and licensed online gambling sites. The companies that operate these Web sites are trade zone corporations, foreign-owned corporations operating in specific areas of the country as if they were on foreign soil. In Antigua, trade zone corporations cannot produce products for domestic consumption, so Antiguans are not allowed to participate in online gambling with any trade zone companies located there.

Because Internet gambling is not regulated by the federal government, various agencies and private entities have attempted to estimate the extent of the industry, including the National Gambling Impact Study Commission, the U.S. Department of Justice, and such industry researchers as Christiansen Capital Advisors and Bear Stearns & Co., Inc. However their estimates differ, these analysts agree that the growth of online gambling has been phenomenal. In 1997 there were fifty to sixty Internet casinos in operation, most based in the Caribbean. In total the industry earned approximately $300–$350 million that year. By 2000 there were an estimated 600 to 700 sites, and revenues approached $2 billion. In 2003 the number of sites had grown to about 1,800, and revenues were estimated at $4–$6 billion.