Gambling on the Internet

International Gaming and Communications Corporation builds the World's First Web-based Casino

by Erica Rex

In the past several years, gambling has become a more popular form of entertainment in America than going to the movies or to sporting events. And now gambling has found its way onto your personal computer. The Global Casino, the first on-line casino, produced by Interactive Gaming and Communications Corporation (IGC) of Blue Bell, Pennsylvania, comes into being in real time using real money in mid-February, 1997. With this new venue, entrepreneurs -- and bettors -- who look to gambling and gaming as serious revenue streams are about start cashing in on an industry that last year gleaned $44.4 billion in profits from wagering that lightened the pockets of gambling Americans by $550 billion.* Of this figure, only about 40% took place in actual casinos. The lion's share of betting takes place through other means; on-and-off-track betting and book-making, state-run lotteries, card rooms, charities and non-casino devices (community and church lottos, bingo games and so on) comprise 60% of the dollars wagered.

THE BRIEF HISTORY OF WAGERING ON THE NET

The Global Casino did not start life as an on-line casino but rather as a legal means of wagering on major sporting events taking place anywhere in the world. In 1992, Sports International Ltd. of Grenada, West Indies, a wholly-owned subsidiary of IGC, instituted The International Sports Book, which quickly became the world's largest offshore sports book. The Sports Book allowed customers to set up wagering accounts offshore (in Grenada) and place wagers using a toll-free number from anywhere in the world. Since its inception, the Sports Book has generated approximately $50 million annually in wagers. In May, 1995, Sports International paved the way for the future of on-line gaming by accepting the very first wager transmitted over the Internet. By the fall of 1995, the company began accepting parlay cards and teasers on-line. In November, 1996, IGC launched a live version of the Wiseguy Sports Wagering System, the first PC-based Internet ready sportsbook wagering software package. Using Wiseguy, bettors can establish an account within hours and wager with real currency on any sporting event. The application is capable of handling over 10,000 betting transactions per hour.


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The Global Casino was built, according to Jeffrey Erb, Vice President of Intersphere, the wholly-owned subsidiary of IGC which created the software for the Sports Book Web page as well as for the Global Casino as "...an add-on to the existing sports structure. We had always intended to build an on-line casino, but the technical challenges are much different.... The Sports Book isn't a hard-core interactive application. It's a Web server and dedicated Windows clients..." Making casino-style betting possible -- where wagers are made in real-time between several players located in far-flung places presented technical challenges that had to be met.

HOW JAVA MADE INTERNET GAMBLING POSSIBLE

In order to build the gambling software infrastructure, IGC hired Brainstorm Technologies, Inc. of Cambridge, Massachussetts. Besides providing high-level consulting services and building custom groupware applications that make use of distributed applications such as Lotus Notes, Brainstorm pioneered the development of a three-tiered Java architecture for deployment of highly interactive, database-intensive applications for the Worldwide Web.

The Internet Applications Framework, (IAF) is, according to Rizwan Virk, co-founder of Brainstorm Technologies and technical project manager for the Global Casino "...a rapid application development tool for building robust, transaction intensive web applications written in Java..." It is a generic applications framework on which a variety of applications including electronic commerce, customer service, and point of care systems can be built, and was the perfect vehicle for creating a real-time, on-line Internet casino.

The IAF framework contains three layers: a presentation layer, a functionality layer and a data layer. The presentation layer consists of Java applets hosted in HTML and a platform-independent browser, such as the Netscape Navigator or Microsoft's Internet Explorer. All network communication between the presentation layer and the functionality layer are carried out using Brainstorm's own communications classes, thus maintaining security. The functionality layer contains object libraries, and workflow software and/or groupware such as Lotus Notes. The data layer consists of any number of databases: DB2, AS/400, Oracle, SQL Server mainframes/flat files, ODBC/JDBC-compliant Lotus Notes databases and so on.

Work on building the Global Casino in Sun Microsystem's Java application programming language using Brainstorm Technology's IAF began in early 1996. A prototype blackjack game was placed on the Sports Book Web site in mid-1996.

The Global Casino is one of the few Java applications available on the Internet that provides real-time, user-host interactivity as well as security while carrying out transactions on a large-scale Microsoft SQLServer RDBMS. Jerry Larivee, spokesperson for Brainstorm said of the project: "The Global Casino...not only revolutionizes the gaming industry on the Internet...but technically represents...proof that the Java language alongside IAF can support transactions that entail millions of hits per day [in which] security and transaction persistence are critical..."

The first real-time, real-money casino game that will become available on the Global Casino is blackjack. In the Internet version of the game, as in the Las Vegas model, the player plays not against other opponents but against the dealer or house. A blackjack table appears on the screen and a player is dealt two cards. A player places bets by moving his chips to the center of the table using the mouse. Depending upon his hand, the player can choose stand or hit.

There were reasons for choosing blackjack as the initial real-time game offering. Michael Oryl, President of Intersphere, said: "There are still lots of technical issues when it comes to messaging back and forth across the Internet. For instance, if you have several players playing poker, how long do you wait for a bet? There has to be a built-in time out period. And then betting order and number of players has to be established..." The necessary Java applets for poker and other casino games are, according to Oryl, under development.

For the same reason -- that of the technical complexity involved in creating groupware for multi-player games -- the second game that will become available on the Global Casino is a slot machine.

THE FUTURE OF INTERNET GAMBLING

Michael Oryl foresees enormous growth in the Web-based casino business: "From the time that the Sports Book went on-line in May of 1995, we've seen a 20% increase in volume of wagering over the telephone-based games," said Oryl. His experience is underscored by other members of the gaming industry: an industry study shows that total casino wagers have grown at an annual rate of 10.27% since 1982, and Harrah's Home Testing Institute has found that more people visit casinos than attend arena concerts or baseball games. With the debut of the Global Casino on the Internet, IGC expects to capture at least 1% of the worldwide wagering market.

"Home is where the [gambling] market is going," said Jason Ader, a gaming analyst at Bear Stearns. And with its movement from casino and racetrack to Internet, yet another of the many diversions that once took place in public venues -- movie houses, pubs, shops, concert halls -- can now be enjoyed in the privacy of your own home.

* source: The Economist, January 25, 1997

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