January 1, 2018 is the 20th anniversary of online poker, ever since Planet Poker became the very first virtual card room to host real-money games. Planet Poker ran online poker games at approximately nine months before the film Rounders launched in movie theaters. If you have played at Planet Poker in the past, you will surely feel those nostalgic, and for sure you have been one of those who patiently played online poker via dial-up modems!
Planet Poker was the very first virtual card room to accept real-money deposits on January 1, 1998. Even though poker and other types of card games were available in various forms on the Internet, 1998 was the first year ever that Planet Poker provided real cash games to players. Before the start of 1998, Planet Poker offered only play-money tables. When they decided to transition to real cash on January 1, 1998, well, the rest is history.
What has happened within the past two decades:
- Poker has "boomed" and "busted", online websites have risen to stardom while some have failed
- Fortunes have been made, while some have been lost
- Multi-million-dollar cheating scandals have surfaced
- Outrageous prop bets became popular amongst pro players
- Government crackdowns, legalization efforts, and indictments
Let's take a look at US Poker and how poker has come to what we now know about it today.
How Online Poker Began
There's always someone who first started it, and in the topic of online poker, it was none other than Planet Poker. However, we should be aware of the fact that online poker has actually started many years before Planet Poker launched their version.
A group of hardcore poker players and enthusiasts were playing what was called IRC poker. IRC is the abbreviation for Internet Relay Chat, a chatroom created in the late 1980s. The IRC poker script was created by Greg Reynolds and Todd Mummert around the early 1990s.
Of course, IRC poker was definitely free to play and appeared like a written hand history. The way it worked was that players will receive 1,000 chips each day and instead of clicking buttons like we do now, they would type in their commands and action would then move to the next player. Obviously, IRC had several limitations. Players would have to first beat Limit Hold'em games if they wish to play No-Limit Hold'em, and IRC could not support multi-table tournaments, so as many as 23 players may possibly be playing the same hand!
For those who played through IRC, it sure was primitive, but oh well, at that point you just have to make do with what you have. The good thing that came out of this, is that it gave Mike Caro, Randy Blumer and some other early pioneers the inspiration to construct a real-money poker game online. The end result was: Planet Poker.
In today's standards, the software of Planet Poker is quite bad; however, compared to IRC, it was a significant step forward, even though it was glitchy and buggy. Planet Poker may have had the original idea, but it would be the second generation of online poker sites that would make online poker a successful product for the whole world.
Online Poker Second Generation
The rise of second-generation online poker sites that launched from 1999 to 2002 was amazing. Consider the fact that poker had not boomed yet at those times.
The first rival ever for Planet Poker was called Paradise Poker in 1999, which obviously surpassed Planet Poker as the number one poker site, but Paradise was just the beginning of a seriously long list of more poker sites, such as Pacific Poker, Inter Poker, Prima Poker, Ultimate Bet, and current giants like PartyPoker and PokerStars.
The very first site to feature multi-table tournaments was Poker Spot, created by Dutch Boyd, a three-time WSOP bracelet winner.
Poker Spot was also the first scandal-filled online poker site. Poker Spot encountered payment processing problems, and instead of informing customers, the site and Boyd thought they can endure everything. In the end, Poker Spot shut down, and unfortunately they owed players in the neighborhood a sum of $400,000. This story is told in detail in Poker Tilt, Boyd's biography book about his perspective of the poker boom and surviving the brutal world of poker.
Planet Poker simply could no longer sustain its business model, and so they ultimately ceased all online poker action on January 26, 2017. The site is still open, but only if you just need a refresher on poker rules.
Unlawful Internet Gaming Enforcement Act (UIGEA)
It was September 2006 when a piece of legislation was included to the Safe Ports Act that gave a lasting blow on online poker in the US and all over the world, the Unlawful Internet Gaming Enforcement Act (UIGEA).
Simply put, UIGEA made it a crime for all financial institutions to process illegal online gambling transactions.
The legislation forced publicly-traded online gambling companies like PartyPoker to exit the US market. This move made PokerStars and upstart Full Tilt Poker a massive gain into the global market, and they both became the number one and two sites in the online poker industry.
The War of the Online Poker Sites
Around 2008, online poker is basically a heads-up battle between two sites.
Insider cheating scandals that surfaced at Absolute Poker and Ultimate Bet has enabled PokerStars and Full Tilt to reach for the top spot of the online poker industry.
Both companies were competing for each and every player, and that meant offering incredible bonuses, rewards, and promotions for all new and regular players. PokerStars constantly won the battle every time.
However, the dark times will soon befall them, and unfortunately for Full Tilt Poker, it will be their demise when the US Department of Justice swooped down on them on 2011.
On April 15, 2011, UIGEA has made its presence clear again five years later, when the Department of Justice used it to seize the major US-based online poker sites and indict their owners.
Known as Black Friday in the poker community, this spelled the end of online poker in the US.
It was also the end of Full Tilt Poker, and the end of Absolute Poker and Ultimate Bet.
Full Tilt Poker had been using up player deposits to cover their operational expenses, so when Black Friday turned up, there was the unavoidable run on the bank by European customers and Full Tilt ended up bleeding profusely, owing hundreds of millions of dollars to its customers.
On the other hand, PokerStars survived and not only did it made good on all player deposits, it also purchased Full Tilt Poker and settled it debts when PokerStars reached a settlement agreement with the US Department of Justice.
Modern Era of Online Poker
Online poker returned a few years later to the US when four states legalized online gaming: New Jersey, Nevada, Delaware, and Pennsylvania.
Today, the online poker industry is significantly more mature, with player pools and signups being more stable. With the constant influx of fresh players, operators have shifted their business strategies from growth to maintenance.
Online poker in the modern era:
- With two decades of experience, operators ended the practice of "bonus whoring" through their optimized rewards and promotions
- New hybrid products such as Spin & Gos are created
- Today's online poker sites have been consolidated to a few reputable operators, all of which also offer sports betting and online casino to their games roster.
- More and more countries legalize online poker
Bright Future Ahead for Online Poker
Nobody can predict where online poker will be in the next years, but there are reasons why we can be optimistic about it:
- US expansion efforts continue
- International and interstate liquidity sharing agreements are beginning to take form
- There's this potential "poker war" brewing between partypoker and PokerStars.
- As of this 2018, people get caught up in the cryptocurrency craze as more and more poker sites embrace the blockchain technology (either investing in cryptos or using the tech to offer players to play virtual poker at their site).