Gambling | Introduction
Americans love to gamble. More than half of all adults say they play the lottery, and more than a quarter regularly frequent casinos, according to a 1999 National Opinion Research Center study. Each year Americans lose more than $50 billion on legal wagering in casinos and bingo halls, on lotteries, and at racetracks. They spend an additional unknown amount in private settings, such as poker games, and through illegal channels, such as bookies. “Judging by dollars spent,” writes Timothy L. O’Brien in his book Bad Bet, “gambling is now more popular in America than baseball, the movies, and Disneyland—combined.”
This enthusiasm for gambling is as old as the nation itself. During the Revolutionary War, states sponsored lotteries to help finance their armies. Thomas Jefferson advocated statesponsored gambling as a voluntary, rather than a coercive, tax. Lotteries became popular again after the Civil War, when southern states used them to finance Reconstruction projects. Lotteries were sanctioned because they raised funds for worthy causes; other forms of gambling remained illegal and socially unacceptable until the twentieth century.
Many states started to permit betting on horse and dog races in the 1920s, and Nevada became the first state to legalize casino-style gambling in 1931. Every state had banned lotteries because of scandals in the 1880s involving embezzlement and fraud, but in 1964 New Hampshire, which has no income or sales tax, revived the lottery as a means of generating revenue. It was an enormous success, with the majority of tickets purchased by out-of-state residents. “In the next ten years,” writes economics professor Richard Mc- Gowan, “every northeastern state approved a lottery.” But, he reports, “the greatest growth of state lotteries occurred between 1980 and 1990. Twenty-five states approved lotteries, offtrack betting, keno, and video poker machines.”
However, the 1990s may be remembered as the decade in which Americans truly embraced gambling. In 1993, for the first time in U.S. history, revenues from casino gambling were greater than those from state lotteries. According to McGowan, “this marked a turning point: Casino gambling became the preferred form of gambling in the United States. It also marked the acceptance of gambling as a legal source of entertainment.”
One reason for this was the enormous growth that Las Vegas experienced in the early 1990s. Tourism jumped by 24 percent in this period, and by 1996 the city’s population was almost four times what it had been in 1980. This was in part because the gambling mecca had pursued a massive public relations campaign, downplaying its image as “Sin City” and instead marketing itself as a family-friendly vacation destination. Casinos such as the MGM Grand, for example, built roller coasters and theme parks in addition to slot machines and craps tables, and the $900 million Mirage casino-resort created an all-ages tropical theme park in the middle of the desert. Another factor in the city’s growth was the lure of slot machines, one of the most popular forms of gambling: In 1983, revenue from slot machines surpassed that of other games, such as blackjack or roulette, for the first time.
Another important development in the 1990s was the spread of Indian casinos. Many American Indian reservations are on lands that lack natural resources, and poverty and unemployment are exceptionally high among Native Americans. In the 1980s many tribes looked to casino gambling as a means of generating both jobs and tribal revenues. In 1987 the Supreme Court ruled that tribes could operate legal forms of gambling on their lands free from state regulation and taxes. In response to criticism of the large amounts of untaxed, uncontrolled income, Congress passed the Indian Gaming Regulatory Act, which returned some power to states. The result has been a compromise, with tribes and state governments negotiating over whether a tribe may build a casino and what types of games it may offer. Today there are more than 120 Indian casinos in 28 states. The most successful of these has been the Mashantucket Pequots’ Foxwoods Resort Casino in Connecticut, which is the world’s largest casino.
Several states have tried to emulate the success of Las Vegas and some Indian casinos. Iowa became the first state to legalize riverboat gambling in 1989. Over the next few years, other states along the Mississippi River also legalized riverboat gambling in order to compete for revenues, just as northeastern states had adopted lotteries in order to compete with New Hampshire. Towns as unlikely as Deadwood, South Dakota; Joliet, Illinois; and Detroit, Michigan, have all approved gambling in the hope that it will provide economic benefits. As of 2001, only Utah and Hawaii do not have some form of legalized gambling.
Not surprisingly, the spread of legalized gambling has raised a number of concerns. Many Americans remain morally opposed to gambling. The Navajo, for example, have refused to adopt Indian casinos on ethical grounds. Others warn about the growing problem of compulsive gambling, which in some cases can lead to bankruptcy, crime, and even suicide. Some critics charge that it is wrong for the government to promote gambling and unwise for states to rely on gambling for revenue. A growing antigambling movement, headed by organizations such as the National Coalition Against Legalized Gambling, maintains that the social costs of gambling far outweigh its purported economic benefits.
In 1997, President Bill Clinton appointed the National Gambling Impact Study Commission (NGISC) to address these concerns. The commission released its report in June 1999. The report is inconclusive on many important issues, stating that “the available information on economic and social impact is spotty at best and usually inadequate for an informed discussion.” The commission did, however, call for a moratorium on gambling expansion. “The Commissioners believe it is time to consider a pause in the expansion of gambling,” the report states. “The purpose of this recommended pause is to encourage governments to do what to date few if any have done: To survey the results of their decisions and to determine if they have chosen wisely.”
As the NGISC report indicates, the debate over legalized gambling is far from over. Gambling: Opposing Viewpoints explores the issue in the following chapters: Is Gambling Im- moral? How Serious Is the Problem of Compulsive Gambling? How Does Legalized Gambling Affect Communities? How Should the Government Regulate Gambling? Because legalized gambling has become so widespread, it is important to consider what the full social and economic impacts of gambling will be. The viewpoints in this book have been selected to introduce the reader to this ongoing debate.
