The origin of online casinos can be traced to three different processes. One is gaming software. From the mid 1970s gaming software began to make its presence felt in land casinos. Slots machines based on computer software began to replace the electromechanical slots. These machines displayed the power of computer processing and computer graphics. Software for blackjack strategy had been developed by professional card counters in the 1970s. Software for gambling games was the first piece of the jigsaw puzzle to be perfected.

What was missing was a mechanism for different computers to connect to a nodal server and use the gaming applications stored on that server. This problem was solved with the coming of age of the Internet. In the early 1990s the Internet became widely accessible. Initially it was used as a mode of communication. Individual users could connect to the Internet from their computers and send messages to others similarly connected. But the latent potential of the Internet in other applications was apparent.

The third factor needed for online casinos was a regulatory mechanism. This came about in 1994. The tiny island state of Antigua and Barbuda enacted The Free Trade and Processing Zone Act that permitted it to issue gambling licenses. Thus the first online gambling jurisdiction was born. Under this Act the Directorate of Offshore Gaming was constituted. It is this body that receives applications from licensees, scrutinizes them and grants licenses if the application is found fit. Antigua and Barbuda still remains one of the more popular and respected jurisdictions. This law provided the fillip that was required to create online casinos.

Now that the three important mechanisms were in place all that was required was to string them together. Microgaming was a pioneer in this field. Microgaming, a software provider based in The Isle of Man, was founded in 1994. Microgaming was the first to develop online gaming software. Whereas online games could be played using the software it lacked one vital component needed in a full-fledged online casino. This was the security required to conduct financial transactions over the Internet in a safe manner. This component was provided by Cryptologic, an online security software company founded in Ireland in 1995. It began developing the first eCash applications for online gaming. In fact it was Cryptologic that put the whole package together first and established the first online casino, InterCasino, in 1996.

Since then the online casino industry has not looked back. It is estimated that there were over 2,300 online gambling sites that include online casinos, online poker rooms and online sports betting by 2006 with combined revenue of over $15 billion.
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