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The History of Online Casinos: The Wagers of Sin – Part 1

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The Wagers of Sin - The History of Internet Gambling

Porn and Gambling – the True Innovators

What do porn and gambling have in common? The short answer: someone usually ends up f*cked.

In 1999, an article in the Guardian acknowledged that the porn industry was one of the key innovators in the online space, embracing – or rather shagging the arse off of – new technology.

Pornographers have always been abreast (!) of every new medium, since Caxton’s printing press knocked out a few lewd medieval tomes, and Gutenberg ran off an early edition of Knave (literal), with a Knight’s Damsels Special. “I’d Joust That!” says horny Sir Hump-a-Lot from the castle of Cum-a-Lot. Silly place.

The Masturbation Medium

Photography, video, film; pornography has always been first in the queue to exploit it. Whatever the medium, it can be made both wankable and bankable. Love costs but lust sells.

In the 1980s, the Internet was an exclusive club: nerds, the government, and people looking for porn. Usenet groups, bulletin boards, and free file transfer protocols (FTP), enabled horny guys and gals to share images and get their rocks off, without any top shelf anxiety.

In 1994, the Internet got global and porn pioneers, like Sizzle and Amateur Hardcore, led the way. Data transfer, cash movement, streaming, privacy… all these issues were problems to be tackled – to be dominated, restrained, and spanked into shape.

Betting Boots Up

Screenshot of Homepage circa 1998
How it all began; in 1998

In man’s quest for life’s short and simple pleasures, betting and porn both deliver that brief burst of excitement and joy. The build-up, the foreplay, the oxytocin-fuelled overload of a winning bet or an orgasm. Is there a difference between them? Imagine the two combined: being wanked off, as your six-team parlay comes in. Could it get any better?

Antigua, St Johns
Not a bad place to earn a living – Antigua

Intertops relocated to Antigua, with a view to targeting the enormous US market. You have to remember that gambling was illegal in most of the United States. If you wanted to bet $20 on the New York Giants, you had to go visit dodgy Don in the Italian quarter. Dodgy Don would then wire the money to the Caribbean, where the ‘bet’ would legally happen. The guy in the Caribbean (usually a mobster in hiding or wanted) would then wire the winnings back. It was legally murky at best and you really don’t want to run up a gambling debt with Dodgy Don.

Moving Money

Mitch Garber
Mitch Garber, PartyGaming CEO

Of course, the FBI were onto this. The 1961 Federal Wire Act was specifically created to prevent the transmission of bets and wagers by wire transfer. The ‘work around’ was the guy in Antigua. He took all the money, made all the bets, and made a note of who won and who lost. The bet ‘took place’ outside the US. So, one of the first really important challenges for both porn and betting was the ability to move money around without too much scrutiny. Back in the day, Intertops was assisted by business behemoth and former PartyGaming/Caesars CEO Mitch Garber, who helped start up online payment processing company SureFire.

NETELLER, PayPal, and SureFire were all pioneers, finding their feet. Initially, happy to be associated with online gambling because this was the ‘demand’ that they could supply. Remember: this all predates Amazon and eBay. The business was fraught with danger and difficulty as hackers tried to break into the fledgling systems.

Porn Again

Back in Antigua, the pioneers of porn and online gambling shared knowledge and technology. They also shared Caribbean locations for porn shoots. If you were visiting for work, you might end up sharing a kitchen with Tom Wanks, Rocky Balboner, Teen LaQueefa or Ana Lee. It was not unusual to have to move out of your company accommodation, as a porn shoot was scheduled for the afternoon.

Getting money into Intertops was difficult and often a gamble for the business.  One week, you could simply use a bank transfer to move money from a client’s account to Intertops. Then, the bank would get a warning from the FBI and would stop it. Next: a wire transfer. Then: no. Then PayPal – then ‘err… PayPal no longer wishes to be associated with online betting’.

Gambling doesn’t work on credit and don’t mention the cash back nightmares. Losing punters would simply ask their bank to do a cash back on the transfer. The sportsbook – operating in legally grey water – would have little chance of getting the wager back. Gradually, solutions were put in place: anonymous credit cards and accounts, start-ups prepared to ignore the FBI, and businesses that valued client confidentiality and freedom of choice over archaic law.

Payment Problems

Payments were just one of many problems faced by these industry pioneers. Although the competitive field was small, Intertops had to think about driving new business. One of the early ideas was some kind of bonus, when you made a deposit. That’s right, folks: the welcome bonus, the reload bonus. It all started here.

We had a database of users – and we had their emails. But creating emails, with logos, and rich content was unknown territory. The sophisticated messaging you enjoy today, before dumping it in the spam box, simply didn’t exist.

When the first promotional emails were sent from Intertops, they had Word documents attached to them. Users were expected to open the Word document containing the offer. They did.

For marketeers reading this, the open rate for the early emails was almost 100%. Getting an email was exciting and this was one from a stranger – then: twice as exciting. The word ‘spam’ didn’t even exist. People enjoyed getting an email and they took the offers seriously.

As for the deposit bonus. We opted for 10%. However: this was with no rollover and no real terms and conditions. Within days, people had figured out how to open an account, make a big deposit, gamble only the 10% bonus, and take the rest of the deposit back. It wasn’t long before the bonus rollover terms and conditions arrived.

In the coming years, the online betting business would go from cowboys and Indians, to corporate and industrial. The online casino would become ubiquitous. The old school operators would finally start get their shit together and the first Internet business bubble would burst.

All to come in the Wagers of Sin.

Paul Cullen

"Paul Cullen is the chief consultant for the Bonus Doctor team. The industry veteran has been at the heart of the online betting space since the very beginning. In 1998, our top doc began his career working at a small online sportsbook called The rest, as they say, is history."