II.

Forms of Gambling

There are many different types of legal and illegal gambling. Legal forms are run directly by government agencies, for-profit companies, and charitable organizations. Illegal types include bets placed with individuals (known as bookmakers) or underground gambling services (including Internet gambling sites), as well as informal gambling among friends, such as poker games or sports pools. Complex laws dictate which types of gambling are legal in a particular city, state, or country, and these laws are subject to change. Because of varied regulations from city to city and state to state, gambling is often used by communities and vacation destinations to attract tourism.

A.

Casinos

One of the fastest growing forms of gambling today is the casino. A casino is a gambling establishment where players bet against the casino (sometimes called the house) in games of chance. These games can include poker, blackjack, keno, dice games such as craps, and mechanical devices such as roulette wheels and slot machines. All casino games have a house edge, which means the casino has better odds than the players. In the few games where players compete against each other, such as poker, the house edge usually consists of a small percentage taken from each pot (the total amount wagered on each hand). Since the early 2000s poker has soared in popularity, mostly because of widespread television coverage of major tournaments.

Although many states and foreign countries have legalized casinos, Nevada dominates the casino market in the United States and the world. In an area known as the Strip in Las Vegas, Nevada, billion-dollar theme hotels attract millions of tourists annually with flashy entertainment, amusement parks, and huge casinos. Other cities with a high concentration of casinos include Reno, Nevada, and Atlantic City, New Jersey. Some states, including Iowa and Louisiana, have legalized floating gambling parlors known as riverboat casinos. All together, legal casinos in the United States collected about $40 billion annually in the early 2000s, with the total revenues making up nearly two-thirds of all legal gambling in America.

Native American casinos have begun to make inroads into the U.S. gambling industry. In 1988 the United States Congress passed the Indian Gaming Regulatory Act, which allowed for the possibility that Native American tribes could open up gambling on their lands, partly to help stimulate the depressed economies of many reservations. By the early 2000s more than half of the states had licensed some form of Native American gaming. A number of these casino resorts, such as the giant Foxwoods complex in Connecticut, have been phenomenally successful. This trend has increased the pressure in many states to expand legalized gambling so that other outlets can compete with Native American casinos.

B.

Sports Betting

Betting on sporting events is a common form of gambling around the world, involving billions of dollars annually. Large events such as the Super Bowl or the World Series alone can generate wagers totaling billions of dollars. In addition to legal sports betting, such as wagers made in casinos, illegal sports gambling flourishes globally. Rigid enforcement of sports gambling laws remains difficult because much of the betting is placed with private individuals or with companies located in countries where such wagering is legal. Internet gambling sites, which can be based anywhere in the world, are a growing source of sports gambling.

Legal in many other parts of the world, betting on individual sporting events in the United States is allowed only in Nevada (with some exceptions, such as the sport of jai alai, which is open to gambling in a few places, mostly in Florida). In part this is because of the potential for events to be fixed, or illegally influenced (usually with bribes or other compensation). There have been a number of high-profile sports gambling scandals in history, including the fixing of the 1919 World Series by Chicago White Sox players, who were paid by gamblers to lose the series. Another scandal involved professional baseball player and manager Pete Rose, who was banned from the sport and barred from entering the Baseball Hall of Fame because of his gambling. Most sports leagues and associations have strict rules against players betting on sports or associating with gamblers.

Sports betting typically involves odds or point spreads that affect the bet or the payout. A bet with odds of five-to-one means that a winning bettor will collect five dollars for every dollar bet. With a point spread, one team is favored by a certain amount of points (the amount is set separately by each gambling outlet). For example, if a bettor decides to wager on a team favored by 12 points, then he or she wins only if that team wins the game by more than 12 points. If there are no odds or point spread given, then the wager is known as an even-money bet (betting five dollars to win five dollars). There are many other types of sports wagers, including combination bets, depending on the sport and the specific regulations that apply to it.

Horse racing has long been one of the most common types of legal sports gambling. Many large cities have tracks dedicated to horse racing. More than 150 racetracks were operating in the early 2000s in the United States. Gambling at these tracks is governed by the pari-mutuel betting system (French for mutual stake). Under this system all money bet on a race is placed in a pool and split between winning bettors, minus a percentage that goes to the track. The odds are determined by how much money is bet on each horse, with the more money bet, the lower the odds (and the lower the payout). By the beginning of the 21st century pari-mutuel betting on horse racing in the United States—including wagers allowed away from the track, know as off-track betting—totaled more than $16 billion annually. See also Harness Racing.

Dog racing, which also uses the pari-mutuel system, is legal in some states but is not as widespread as horse racing. Betting on animal fights, such as cockfighting or bullfighting, has become even more limited because of animal cruelty laws that outlaw these sports. Animal fighting is an example of a type of gambling that has been banned in the United States but is still legal in some other countries, which have different cultural traditions and often less stringent gambling laws. It is also operated illegally in many places.

C.

Lotteries

Lotteries are another form of gambling. In a lottery, tickets are sold for a set amount and a share of the proceeds is returned to the winners, usually through a random draw. Most games allow players to pick their own numbers or let a computer randomly pick for them. Lotteries offer a wide variety of games, including weekly drawings, instant “scratch” tickets, daily games, and superlottos with prizes increasing until there is a winner. Large lottery prizes sometimes exceed $100 million, especially in games held simultaneously in more than one state. By the early 21st century all ten of the Canadian provinces and about 80 percent of U.S. states had laws allowing government-run lotteries. Overall, lotteries make up about 25 percent of all legal gambling revenue in the United States.

D.

Other Types of Gambling

Various other forms of gambling exist but are generally more limited in scope or visibility. Many of these, such as bingo games and raffles (similar to a lottery), are often used for charitable fundraising. The prizes offered for these games can be money or goods, sometimes donated by local businesses or individuals. Mail-in sweepstakes are another gambling alternative that people play in hopes of winning a large prize.