IV.

History of Gambling

A.

Gambling Origins and Spread

Anthropologists have found evidence that games of chance date back thousands of years. Dice more than 4,000 years old have been discovered inside the Egyptian pyramids. Horse racing is more than 2,000 years old, and betting on the outcome of those races is presumably just as ancient. The Christian Bible contains a number of references to gambling, including Roman soldiers “casting lots” (probably stones or shells) to divide up Jesus’ clothes after his crucifixion. The first casinos also appeared in ancient times, serving Romans who traveled to resorts near natural spas. During the Middle Ages, gambling flourished at inns along the roads traveled by soldiers and merchants.

The first lottery games with purchased tickets and prize money were held in Europe in the early 1500s. Such lotteries were an important source of royal revenue. In colonial America lotteries were widely used to fund the construction of canals, bridges, buildings, and roads. The Continental Congress even authorized lotteries to raise money for George Washington's troops. After the American Civil War (1861-1865), several Southern states used lotteries to help rebuild their ravaged infrastructure.

In the 19th century casinos spread across Europe. The most prominent of these early casinos was in Monte Carlo, Monaco, still a popular gambling center today. Illegal casinos and other types of gambling thrived in East Coast cities in the United States during the same time.

B.

Twentieth-Century Gambling

Nevada became the first state to legalize casinos in 1931. The city of Las Vegas steadily grew into the gambling capital of the world during the mid-20th century. Nevada had a monopoly over legal casino gambling in the United States until 1978, the year casinos were legalized in Atlantic City, New Jersey. State lotteries were introduced in 1963 when New Hampshire created a government-run game, and many states followed suit.

During the early and middle of the 20th century, organized crime syndicates were a major factor in financing and controlling gambling in the United States. These groups were involved in many forms of illegal gambling as well as legal forms such as Nevada casinos. Gambling establishments made large profits for organized crime and also served as a way to “launder” (make to appear legal) the profits from other illicit activities, such as narcotics. Although organized crime’s involvement in the growth of Las Vegas and other gambling centers is well documented, this influence has gradually declined as gambling has grown into a giant corporate industry. The syndicates still exert some measure of control over illegal gambling activity, although the exact amount is unknown and varies by region. See also Mafia.

Gambling exploded in popularity during the last two decades of the 20th century. Spurred by the legalization of gaming on Native American reservations in the late 1980s, gambling revenues went from $8 billion to $15 billion from 1988 to 1994. Seeing the potential for huge profits, more states and municipalities began to legalize gambling. Lottery games proliferated and offered more and larger prizes, although often by making the chances of winning much lower. In the 1990s Las Vegas began building opulent theme resorts with thousands of rooms, targeting families along with hardcore gamblers. For the gaming industry, there seemed to be no limit to growth during this period.

C.

Recent Trends

In the early 21st century gambling was sometimes called the new American pastime. By 2004, 36 states had legalized casino gambling as a way to stimulate their economies and create jobs, either commercially or specifically on Native American lands. Television shows featuring poker tournaments attracted high ratings, giving casinos and card rooms valuable free publicity. One annual tournament, the World Series of Poker, garnered widespread media coverage with its huge cash payouts—including a $5 million grand prize in 2004. As more casinos continued to open around the world and Internet gambling grew rapidly, the industry attracted millions of new gamblers.

At the same time, the gambling industry faced challenges. The rise of Internet gambling, for example, appeared for a while to pose a serious threat to traditional gambling outlets, as anyone with an online connection could wager real money on sports or casino games. Because gambling Web sites are often based in foreign countries, they pay no taxes to the local governments where the gamblers live. Online gambling also posed problems for regulators attempting to enforce gambling laws. In 2006 the U.S. Congress passed a law making it illegal for banks and credit card companies to send payments to Internet gambling sites. The firms that run the sites announced they would not take bets from U.S. customers, and the market value of the firms plunged.

Other forms of gambling failed to thrive. Attendance at racetracks has been in steady decline, forcing governments and track owners to change laws and marketing tactics in an attempt to shore up the business. Some gambling enterprises have been hurt by too much competition, from multistate lotteries contributing to declines in smaller state games to Native American casinos cutting into the revenues of other types of gambling. In some places, citizen backlash has been able to block legalized gambling from being approved in their communities. The gambling industry, like the act of gambling itself, continued to hold out the promise of riches while remaining a risky proposition.