History of gambling in the United States

The History of gambling in the United States covers gambling and Gaming since the colonial period

History

Games of chance came to the British American colonies with the first settlers. Attitudes on gambling varied greatly from community to community, but there were no large-scale restrictions on the practice. Early on, the British colonies used lotteries from time to time to help raise revenue. For example, lotteries were used to establish or improve dozens of universities and hundreds of secondary schools during the 18th and 19th centuries. A 1769 restriction on lotteries by the British crown became one of many issues which fueled tensions between the Colonies and Britain prior to the American Revolution.

Lotteries continued to be used at the state and federal level in the early United States. Gambling businesses slowly developed in various communities. The lower Mississippi River valley became a hotbed of gambling activity with New Orleans emerging as the nation's leading gambling center. A wave of hostility against gambling in the mid 19th century pushed gambling activity onto boats in the Mississippi River and toward younger territories in the West. Anti-gambling forces in the northeast put an end to lotteries in those locations and this trend spread to some other parts of the country. The rise of railroads caused passenger travel on the Mississippi to decline, heavily damaging the riverboat casinos' revenue. The increasing legal pressures on gambling gradually created opportunities for illegal operations.

California Gold Rush era

During the California Gold Rush, San Francisco became a populous town flush with aspiring prospectors. By the 1850s, the new city had overtaken New Orleans as the gambling capital of the U.S.

As California gradually strengthened its laws and its policing of gambling, the practice went underground.

Reconstruction era

Lotteries and other forms of gambling would be revived temporarily in the South and in other areas during Reconstruction. Gambling was extremely popular on the frontier during the settlement of the West; nearly everyone participated in games of chance. Towns like Deadwood, Dodge City, Denver, and Kansas City were famous for their many lavish gambling houses. Citizens of the West viewed gamblers as respected members of society who worked at an honest trade.

By the early 20th century, gambling was almost uniformly outlawed throughout the U.S. and thus became a largely illegal activity, helping to spur the growth of the mafia and other criminal organizations.

Prohibition era

During the Prohibition era, illegal liquor provided an additional revenue stream for mob figures, and organized crime blossomed. Towns which already had lax attitudes about vice, such as Miami, Galveston, and Hot Springs, became major gambling centers, stimulating the tourist industry in those places.

The Great Depression saw the legalization of some forms of gambling such as bingo in some cities to allow churches and other groups to raise money, but most gambling remained illegal. Major gangsters became wealthy from casinos and speakeasies. As legal pressures began to rise in many states, gangsters in New York and other states looked toward Texas, California, and other more tolerant locales to prosper.

1931–present

The Las Vegas Strip in Las Vegas is home to a large number of casinos

The double blow of stock market crash of 1929 and the Hoover Dam project created a hard economic depression in Nevada, which led to the legalization of gambling as a way to bring economic relief. In 1931, Nevada legalized most forms of gambling when Assembly Bill 98 was signed into law, providing a source of revenue for the state. Interest in development in the state was slow at first as the state itself had a limited population. After World War II, enforcement of gambling laws became more strict in most places and the desert town of Las Vegas became an attractive target for investment by crime figures such as New York's Bugsy Siegel. The town rapidly developed during the 1950s dooming some illegal gambling empires such as Galveston. Nevada, and Las Vegas in particular, became the center of gambling in the U.S. In the 1960s Howard Hughes and other legitimate investors purchased many of the most important hotels and casinos in the city gradually reducing the city's connections to organized crime.

Southern Maryland became popular for its slot machines which operated legally there between 1949 (1943 in some places) and 1968. In 1977, New Jersey legalized gambling in Atlantic City. The city rapidly grew into a significant tourist destination, briefly revitalizing what was previously largely a run-down slum community. In 1979, the Seminole tribe opened the first reservation-based commercial gambling beginning a trend that would be followed by other reservations. Gradually, lotteries and some types of parimutuel betting were legalized in other areas of the country.

In the 1990s, riverboat casinos were legalized in Louisiana and Illinois in addition to other states. In 1996, Michigan legalized gambling in the city of Detroit creating an economic center for potential casino growth. In an attempt to curb the ill effects of the rapid rise in gambling on sporting events, the Congress passed the Professional and Amateur Sports Protection Act of 1992. This was overturned by the Supreme Court in 2018, on the grounds that it was unconstitutional for the federal government to prohibit states from legalizing it under state law.

In the early 21st century, Internet gambling grew rapidly in popularity worldwide, but interstate and international transactions remained illegal under the Federal Wire Act of 1961, with additional penalties added by the Unlawful Internet Gambling Enforcement Act of 2006.

Further reading

• American Gaming Association Gaming industry association
• National Indian Gaming Association Indian gaming industry association