Gambling in the United States
Encyclopedia
Gambling
is legally restricted in the United States, but its availability and participation is increasing. In 2007, gambling activities generated gross revenues (the difference between the total amounts wagered minus the funds or "winnings" returned to the players) of $92.27 billion in the United States. Commercial casinos provided 354,000 jobs, and state and local tax revenues of $5.2 billion . Critics of gambling claim it leads to increased political corruption, compulsive gambling
and higher crime
rates. Others claim that gambling is a type of regressive tax
on the individuals in local economies where gambling venues are located.
, legal gambling revenues for 2007 were as follows:
Grand Total - $92.27 billion
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 gaming 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.
, San Francisco became a populous town flush with aspiring prospectors. By the 1850s, the new city had overtaken New Orleans as the gaming capital of the United States. As California gradually strengthened its laws and policing of gambling, the practice similarly went underground.
and other organized crime
.
Gambling was extremely popular everywhere during the settlement of the west
and nearly everyone participated in games of chance. Towns like Deadwood, Dodge City, Denver, and Kansas City were all famous for their many lavish gambling houses. Citizens of the west viewed gamblers
as respected members of society working at an honest trade. After the turn of the century, nearly all the western states' governments outlawed gambling and ended it as a way of life.
; Galveston, Texas
; and Hot Springs, Arkansas
became major gaming centers attracting tourism from around the nation. 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 revenue, 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.
project directly lead to the legalization of gambling in Nevada. 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 gaming 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.
In 1977, New Jersey
legalized gambling in Atlantic City. The city rapidly grew into a significant tourist destination, 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 casino
s were legalized in Louisiana
, Illinois
, and other states. In 1996, Michigan
legalized gambling in the city of Detroit creating a economic center for potential casino growth. As the Internet grew in the late 20th and early 21st centuries, internet gambling exploded in popularity.
When New Hampshire authorized a state lottery in 1963, it represented a major shift in social policy. No state governments had previously directly run gambling operations to raise money. Other states followed suit, and now the majority of the states run some type of lottery to raise funds for state operations. This has brought about morally questionable issues, such as states' using marketing firms to increase their market share, or to develop new programs when old forms of gambling do not raise as much money.
The American Gaming Association
breaks gambling down into the following categories:
of 1988.
Nevada
is the only state where casino-style gambling is legal statewide. Both state and local governments impose licensing and zoning restrictions. All other states that allow casino-style gambling restrict it to small geographic areas (e.g., Atlantic City, New Jersey
or Tunica, Mississippi
), or to Native American
reservations
, some of which are located in or near large cities. As sovereign nations, Native American tribes have used legal protection to open casinos, which has been a contentious political issue in California
and other states. In some states, casinos are restricted to "riverboats
", large multi-story barges that are, more often than not, permanently moored in a body of water.
Online gambling
has been more strictly regulated. The Federal Wire Act
of 1961 outlawed interstate wagering on sports but did not address other forms of gambling. It has been the subject of court cases. The Unlawful Internet Gambling Enforcement Act of 2006
did not specifically prohibit online gambling; instead, it outlawed financial transactions involving online gambling service providers. Some offshore gambling providers reacted by shutting down their services for US customers.
The approximately 450 commercial casinos in total produced a gross gaming revenue of $34.11 billion in 2006.
Some Native American tribes operate casinos on tribal land to provide employment and revenue for their government and their tribe members. Tribal gaming is regulated on the tribal, state, and federal level. Native tribes are required to use gambling revenue to provide for governmental operations, economic development, and the welfare of their members. Federal regulation of Indian gaming was established under the Indian Gaming Regulatory Act
of 1988. Under the provisions of that law, games are divided into three distinct categories:
Of the 562 federally recognized tribes at the time, 201 participated in class II or class III gaming by 2001. Tribal gambling had revenues of $14.5 billion in 2002, from 354 casinos. Approximately forty percent of the 562 federally recognized tribes operate gaming establishments.
Like other Americans, many Native Americans have dissension over the issue of casino gambling. Some tribes are too isolated geographically to make a casino successful, while some do not want non-Indians on their land. Though casino gambling is controversial, it has proven economically successful for most tribes, and the impact of Native American gambling
has proven to be far-reaching.
Gaming creates many jobs, not only for Indians, but also for non-Indians, and in this way can positively affect relations with the non-Indian community. On some reservations, the number of non-Indian workers is larger than the number of Indian workers because of the scale of the casino resorts. Also, some tribes contribute a share of casino revenues to the state in which they are located, or to charitable and non-profit causes. For example, the San Manuel Band of Mission Indians of California gave $4 million dollars to the UCLA Law School to establish a center for Indian Studies. The same tribe also gave $1 million dollars to the state for disaster relief when the area was ravaged by wildfires in 2003.
Although casinos have proven successful for both the tribes and the surrounding regions, state residents may oppose construction of Indian casinos, especially if they have competing projects. For example, in November 2003, the state of Maine
voted against a $650 million casino project proposed by the Penobscots and Passamaquoddies. The project's objective was to create jobs for the tribes' young people. The same day the state voted against the Indian casino project, Maine voters approved a plan to add slot machines to the state's harness racing tracks.
The National Indian Gaming Commission
oversees Indian gaming for the federal government. The National Indian Gaming Commission (NIGC) was established under the Indian Gaming Regulatory Act
in 1988. Under the NIGC, Class I gaming is under the sole jurisdiction of the tribe. Class II gaming is governed by the tribe, but it is also subject to NIGC regulation. Class III gaming is under the jurisdiction of the states. For instance, in order for a tribe to build and operate a casino, the tribe must work and negotiate with the state in which it is located. These Tribal-State compacts
determine how much revenue the states will obtain from the Indian casinos.
The Indian Gaming Regulatory Act requires that gaming revenues be used only for governmental or charitable purposes. The tribal governments determine specifically how gaming revenues are spent. Revenues have been used to build houses, schools, and roads; to fund health care and education; and to support community and economic development initiatives. Indian gaming is the first and essentially the only economic development tool available on Indian reservations. The National Gaming Impact Study Commission has stated that "no...economic development other than gaming has been found". Tribal governments, though, use gaming revenues to develop other economic enterprises such as museums, malls, and cultural centers.
To win, contestants match their combinations of numbers with the drawn combination. The combination may be in any order, except in some "mega ball" lotteries, where the "mega" number for the combination must match the ball designated as the "mega ball" in the winning combination. If there are multiple winners, they split the winnings, also known as the "Jackpot". Winnings are currently subject to federal income taxes as ordinary income
. Winnings can be awarded as a yearly annuity
or as a lump sum
, depending on lottery rules.
Most states have state-sponsored and multi-state lotteries. There are only seven states that do not sell lottery tickets: Alabama, Alaska, Hawaii, Mississippi, Nevada, Utah and Wyoming. In some states, revenues from lotteries are designated for a specific budgetary purpose, such as education. Other states put lottery revenue into the general fund.
Multi-jurisdictional lotteries generally have larger jackpots due to the greater number of tickets sold. The Mega Millions
and Powerball
games are the biggest of such lotteries in terms of numbers of participating states.
format, although some states use pull-tab
games. In either format, cards are sold that have opaque areas. In some games, all of the opaque material is removed to see if the contestant has won, and how much. In other scratchcard games, a contestant must pick which parts of a card to scratch, to match amounts or play another form of game.
where the ownership, possession and operation of a video poker machine either for commercial or even personal use became illegal. Violators are subject to prosecution and hefty fines. Currently the only type of legalized gambling in the state is the South Carolina Education Lottery
.
Gambling
Gambling is the wagering of money or something of material value on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods...
is legally restricted in the United States, but its availability and participation is increasing. In 2007, gambling activities generated gross revenues (the difference between the total amounts wagered minus the funds or "winnings" returned to the players) of $92.27 billion in the United States. Commercial casinos provided 354,000 jobs, and state and local tax revenues of $5.2 billion . Critics of gambling claim it leads to increased political corruption, compulsive gambling
Compulsive gambling
Problem gambling is an urge to continuously gamble despite harmful negative consequences or a desire to stop. Problem gambling often is defined by whether harm is experienced by the gambler or others, rather than by the gambler's behavior. Severe problem gambling may be diagnosed as clinical...
and higher crime
Crime
Crime is the breach of rules or laws for which some governing authority can ultimately prescribe a conviction...
rates. Others claim that gambling is a type of regressive tax
Regressive tax
A regressive tax is a tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases. "Regressive" describes a distribution effect on income or expenditure, referring to the way the rate progresses from high to low, where the average tax rate exceeds the...
on the individuals in local economies where gambling venues are located.
Gambling revenues
According to the American Gaming AssociationAmerican Gaming Association
The American Gaming Association is a United States gaming industry association.The AGA was founded in 1995 with the goal of promoting, educating and lobbying on behalf of the gaming entertainment industry through education and advocacy...
, legal gambling revenues for 2007 were as follows:
- Card Rooms - $1.18 billion
- Commercial Casinos - $34.41 billion
- Charitable Games and Bingo - $2.22 billion
- Indian Casinos - $26.02 billion
- Legal Bookmaking - $168.8 million
- Lotteries - $24.78 billion
- Pari-mutuel Wagering - $3.50 billion
Grand Total - $92.27 billion
History
Games of chance first 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 lotteriesLottery
A lottery is a form of gambling which involves the drawing of lots for a prize.Lottery is outlawed by some governments, while others endorse it to the extent of organizing a national or state lottery. It is common to find some degree of regulation of lottery by governments...
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
American Revolution
The American Revolution was the political upheaval during the last half of the 18th century in which thirteen colonies in North America joined together to break free from the British Empire, combining to become the United States of America...
.
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
Mississippi embayment
The Mississippi Embayment is a physiographic feature in the south-central United States, part of the Mississippi Alluvial Plain. It is essentially a northward continuation of the fluvial sediments of the Mississippi River Delta to its confluence with the Ohio River at Cairo, Illinois. The embayment...
became a hotbed of gambling activity with New Orleans emerging as the nation's leading gaming center. A wave of hostility against gambling in the mid 19th century pushed gambling activity onto boats in the Mississippi River
Mississippi River
The Mississippi River is the largest river system in North America. Flowing entirely in the United States, this river rises in western Minnesota and meanders slowly southwards for to the Mississippi River Delta at the Gulf of Mexico. With its many tributaries, the Mississippi's watershed drains...
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.
Gold Rush era
With the advent of the California Gold RushCalifornia Gold Rush
The California Gold Rush began on January 24, 1848, when gold was found by James W. Marshall at Sutter's Mill in Coloma, California. The first to hear confirmed information of the gold rush were the people in Oregon, the Sandwich Islands , and Latin America, who were the first to start flocking to...
, San Francisco became a populous town flush with aspiring prospectors. By the 1850s, the new city had overtaken New Orleans as the gaming capital of the United States. As California gradually strengthened its laws and policing of gambling, the practice similarly went underground.
Reconstruction era
Lotteries and other forms of gambling would be revived temporarily in the South during Reconstruction, and in other areas, but by the early 20th century gambling was almost uniformly outlawed throughout the U.S. Gambling became a largely illegal activity helping to spur the growth of the mafiaAmerican Mafia
The American Mafia , is an Italian-American criminal society. Much like the Sicilian Mafia, the American Mafia has no formal name and is a secret criminal society. Its members usually refer to it as Cosa Nostra or by its English translation "our thing"...
and other organized crime
Organized crime
Organized crime or criminal organizations are transnational, national, or local groupings of highly centralized enterprises run by criminals for the purpose of engaging in illegal activity, most commonly for monetary profit. Some criminal organizations, such as terrorist organizations, are...
.
Gambling was extremely popular everywhere during the settlement of the west
American Old West
The American Old West, or the Wild West, comprises the history, geography, people, lore, and cultural expression of life in the Western United States, most often referring to the latter half of the 19th century, between the American Civil War and the end of the century...
and nearly everyone participated in games of chance. Towns like Deadwood, Dodge City, Denver, and Kansas City were all famous for their many lavish gambling houses. Citizens of the west viewed gamblers
Frontier gambler
The Frontier Gambler is one of the most recognizable stock characters of the American West. Usually presented as a gentlemanly southerner living outside of the law, gamblers were historically of both sexes, were of many different nationalities, and were part of a well-respected profession. One of...
as respected members of society working at an honest trade. After the turn of the century, nearly all the western states' governments outlawed gambling and ended it as a way of life.
Prohibition era
During the Prohibition era, illegal liquor provided an additional revenue stream for mob figures, and organized crime blossomed. Towns which had already had lax attitudes about vice such as Miami, FloridaMiami, Florida
Miami is a city located on the Atlantic coast in southeastern Florida and the county seat of Miami-Dade County, the most populous county in Florida and the eighth-most populous county in the United States with a population of 2,500,625...
; Galveston, Texas
Free State of Galveston
The Free State of Galveston was a whimsical name given to the island city of Galveston in the U.S. state of Texas during the early-to-mid-20th century. Today, the term is sometimes used to describe the culture and history of that era...
; and Hot Springs, Arkansas
Hot Springs, Arkansas
Hot Springs is the 10th most populous city in the U.S. state of Arkansas, the county seat of Garland County, and the principal city of the Hot Springs Metropolitan Statistical Area encompassing all of Garland County...
became major gaming centers attracting tourism from around the nation. The Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
saw the legalization of some forms of gambling such as bingo in some cities to allow churches and other groups to raise revenue, 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
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
and other states looked toward Texas
Texas
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
, California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
, and other more tolerant locales to prosper.
1931–present
The stock market crash of 1929 and the Hoover DamHoover Dam
Hoover Dam, once known as Boulder Dam, is a concrete arch-gravity dam in the Black Canyon of the Colorado River, on the border between the US states of Arizona and Nevada. It was constructed between 1931 and 1936 during the Great Depression and was dedicated on September 30, 1935, by President...
project directly lead to the legalization of gambling in Nevada. In 1931, Nevada
Nevada
Nevada is a state in the western, mountain west, and southwestern regions of the United States. With an area of and a population of about 2.7 million, it is the 7th-largest and 35th-most populous state. Over two-thirds of Nevada's people live in the Las Vegas metropolitan area, which contains its...
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
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
, enforcement of gambling laws became more strict in most places and the desert
Desert
A desert is a landscape or region that receives an extremely low amount of precipitation, less than enough to support growth of most plants. Most deserts have an average annual precipitation of less than...
town of Las Vegas
Las Vegas, Nevada
Las Vegas is the most populous city in the U.S. state of Nevada and is also the county seat of Clark County, Nevada. Las Vegas is an internationally renowned major resort city for gambling, shopping, and fine dining. The city bills itself as The Entertainment Capital of the World, and is famous...
became an attractive target for investment by crime figures such as New York's Bugsy Siegel
Bugsy Siegel
Benjamin "Bugsy" Siegel was an American gangster who was involved with the Genovese crime family...
. 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 gaming in the U.S. In the 1960s Howard Hughes
Howard Hughes
Howard Robard Hughes, Jr. was an American business magnate, investor, aviator, engineer, film producer, director, and philanthropist. He was one of the wealthiest people in the world...
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.
In 1977, New Jersey
New Jersey
New Jersey is a state in the Northeastern and Middle Atlantic regions of the United States. , its population was 8,791,894. It is bordered on the north and east by the state of New York, on the southeast and south by the Atlantic Ocean, on the west by Pennsylvania and on the southwest by Delaware...
legalized gambling in Atlantic City. The city rapidly grew into a significant tourist destination, revitalizing what was previously largely a run-down slum community. In 1979, the Seminole
Seminole
The Seminole are a Native American people originally of Florida, who now reside primarily in that state and Oklahoma. The Seminole nation emerged in a process of ethnogenesis out of groups of Native Americans, most significantly Creeks from what is now Georgia and Alabama, who settled in Florida in...
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
Parimutuel betting
Parimutuel betting is a betting system in which all bets of a particular type are placed together in a pool; taxes and the "house-take" or "vig" is removed, and payoff odds are calculated by sharing the pool among all winning bets...
were legalized in other areas of the country.
In the 1990s, riverboat casino
Riverboat casino
A riverboat casino is a type of casino found in several areas of the United States which use a riverboat as a casino. Several states authorized this type of casino to limit the areas where casinos could be constructed under a type of legal fiction.-History:...
s were legalized in Louisiana
Louisiana
Louisiana is a state located in the southern region of the United States of America. Its capital is Baton Rouge and largest city is New Orleans. Louisiana is the only state in the U.S. with political subdivisions termed parishes, which are local governments equivalent to counties...
, Illinois
Illinois
Illinois is the fifth-most populous state of the United States of America, and is often noted for being a microcosm of the entire country. With Chicago in the northeast, small industrial cities and great agricultural productivity in central and northern Illinois, and natural resources like coal,...
, and other states. In 1996, Michigan
Michigan
Michigan is a U.S. state located in the Great Lakes Region of the United States of America. The name Michigan is the French form of the Ojibwa word mishigamaa, meaning "large water" or "large lake"....
legalized gambling in the city of Detroit creating a economic center for potential casino growth. As the Internet grew in the late 20th and early 21st centuries, internet gambling exploded in popularity.
Authorized types
Many levels of government have authorized multiple forms of gambling in an effort to raise money for needed services without raising taxes. These include everything from bingo games in church basements, to multi-million dollar poker tournaments. Sometimes states advertise revenues from certain games to be devoted to particular needs, such as education.When New Hampshire authorized a state lottery in 1963, it represented a major shift in social policy. No state governments had previously directly run gambling operations to raise money. Other states followed suit, and now the majority of the states run some type of lottery to raise funds for state operations. This has brought about morally questionable issues, such as states' using marketing firms to increase their market share, or to develop new programs when old forms of gambling do not raise as much money.
The American Gaming Association
American Gaming Association
The American Gaming Association is a United States gaming industry association.The AGA was founded in 1995 with the goal of promoting, educating and lobbying on behalf of the gaming entertainment industry through education and advocacy...
breaks gambling down into the following categories:
- Card RoomsPokerPoker is a family of card games that share betting rules and usually hand rankings. Poker games differ in how the cards are dealt, how hands may be formed, whether the high or low hand wins the pot in a showdown , limits on bet sizes, and how many rounds of betting are allowed.In most modern poker...
, both public and private - Commercial CasinosCasinoIn modern English, a casino is a facility which houses and accommodates certain types of gambling activities. Casinos are most commonly built near or combined with hotels, restaurants, retail shopping, cruise ships or other tourist attractions...
- Charitable gamesCharity gamblingCharity gambling is the practice where typical gambling 'games' such as bingo, roulette, lottery, slot machines, etc. are overseen by a charity or group of charities. The profits from the venture go to the charity or group of charities, rather than to a municipality or private casino. Sometimes...
and BingoBingo (US)Bingo is a game of chance played with randomly drawn numbers which players match against numbers that have been pre-printed on 5x5 matrices. The matrices may be printed on paper, card stock or electronically represented and are referred to as cards. Many versions conclude the game when the first... - Indian casinosIndian Gaming Regulatory ActThe Indian Gaming Regulatory Act is a 1988 United States federal law that establishes the jurisdictional framework that governs Indian gaming. There was no federal gaming structure before this act...
- Legal bookmakingSports bettingSports betting is the activity of predicting sports results and placing a wager on the outcome.-United States of America:Aside from simple wagers such as betting a friend that one's favorite baseball team will win its division or buying a football "square" for the Super Bowl, sports betting is...
- Lotteries
- Parimutuel wageringParimutuel bettingParimutuel betting is a betting system in which all bets of a particular type are placed together in a pool; taxes and the "house-take" or "vig" is removed, and payoff odds are calculated by sharing the pool among all winning bets...
Legal issues
Gambling is legal under US federal law, and each state is free to regulate or prohibit it. If state-run lotteries are included, almost every state can be said to allow some form of gambling. However, casino-style gambling is much less widespread. Federal law provides leeway for Native American Trust Land to be used for games of chance if an agreement is put in place between the State and the Tribal Government (e.g. A 'Compact' or 'Agreement') under the Indian Gaming Regulatory ActIndian Gaming Regulatory Act
The Indian Gaming Regulatory Act is a 1988 United States federal law that establishes the jurisdictional framework that governs Indian gaming. There was no federal gaming structure before this act...
of 1988.
Nevada
Nevada
Nevada is a state in the western, mountain west, and southwestern regions of the United States. With an area of and a population of about 2.7 million, it is the 7th-largest and 35th-most populous state. Over two-thirds of Nevada's people live in the Las Vegas metropolitan area, which contains its...
is the only state where casino-style gambling is legal statewide. Both state and local governments impose licensing and zoning restrictions. All other states that allow casino-style gambling restrict it to small geographic areas (e.g., Atlantic City, New Jersey
Atlantic City, New Jersey
Atlantic City is a city in Atlantic County, New Jersey, United States, and a nationally renowned resort city for gambling, shopping and fine dining. The city also served as the inspiration for the American version of the board game Monopoly. Atlantic City is located on Absecon Island on the coast...
or Tunica, Mississippi
Tunica, Mississippi
Tunica is a town in Tunica County, Mississippi, United States, located near the Mississippi River. Until the early 1990s the town was one of the most impoverished places in the United States, semi-famous for the particularly deprived neighbourhood known as "Sugar Ditch Alley", named for the open...
), or to Native American
Native Americans in the United States
Native Americans in the United States are the indigenous peoples in North America within the boundaries of the present-day continental United States, parts of Alaska, and the island state of Hawaii. They are composed of numerous, distinct tribes, states, and ethnic groups, many of which survive as...
reservations
Indian reservation
An American Indian reservation is an area of land managed by a Native American tribe under the United States Department of the Interior's Bureau of Indian Affairs...
, some of which are located in or near large cities. As sovereign nations, Native American tribes have used legal protection to open casinos, which has been a contentious political issue in California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
and other states. In some states, casinos are restricted to "riverboats
Riverboat casino
A riverboat casino is a type of casino found in several areas of the United States which use a riverboat as a casino. Several states authorized this type of casino to limit the areas where casinos could be constructed under a type of legal fiction.-History:...
", large multi-story barges that are, more often than not, permanently moored in a body of water.
Online gambling
Online gambling
Online gambling, also known as Internet gambling and iGambling, is a general term for gambling using the Internet.-Online poker:Online poker tables commonly offer Texas hold 'em, Omaha, Seven-card stud, razz, HORSE and other game types in both tournament and ring game structures...
has been more strictly regulated. The Federal Wire Act
Federal Wire Act
The Interstate Wire Act of 1961, often called the Federal Wire Act, is a United States federal law prohibiting the operation of certain types of betting businesses in the United States. It begins with the text:...
of 1961 outlawed interstate wagering on sports but did not address other forms of gambling. It has been the subject of court cases. The Unlawful Internet Gambling Enforcement Act of 2006
Unlawful Internet Gambling Enforcement Act of 2006
The Unlawful Internet Gambling Enforcement Act of 2006 is United States legislation regulating online gambling. It was added as Title VIII to the SAFE Port Act which otherwise regulated port security...
did not specifically prohibit online gambling; instead, it outlawed financial transactions involving online gambling service providers. Some offshore gambling providers reacted by shutting down their services for US customers.
| # | STATE | Charitable | Pari-mutuel | Lotteries | Commercial | Indian | Racetrack |
|---|---|---|---|---|---|---|---|
| 0 | District of Columbia | ||||||
| 1 | Alabama | ||||||
| 2 | Alaska | ||||||
| 3 | Arizona | ||||||
| 4 | Arkansas | ||||||
| 5 | California | ||||||
| 6 | Colorado | ||||||
| 7 | Connecticut | ||||||
| 8 | Delaware | ||||||
| 9 | Florida | ||||||
| 10 | Georgia | ||||||
| 11 | Hawaii | ||||||
| 12 | Idaho | ||||||
| 13 | Illinois | ||||||
| 14 | Indiana | ||||||
| 15 | Iowa | ||||||
| 16 | Kansas | ||||||
| 17 | Kentucky | ||||||
| 18 | Louisiana | ||||||
| 19 | Maine | ||||||
| 20 | Maryland | ||||||
| 21 | Massachusetts | ||||||
| 22 | Michigan | ||||||
| 23 | Minnesota | ||||||
| 24 | Mississippi | ||||||
| 25 | Missouri | ||||||
| 26 | Montana | ||||||
| 27 | Nebraska | ||||||
| 28 | Nevada | ||||||
| 29 | New Hampshire | ||||||
| 30 | New Jersey | ||||||
| 31 | New Mexico | ||||||
| 32 | New York | ||||||
| 33 | North Carolina | ||||||
| 34 | North Dakota | ||||||
| 35 | Ohio | ||||||
| 36 | Oklahoma | ||||||
| 37 | Oregon | ||||||
| 38 | Pennsylvania | ||||||
| 39 | Rhode Island | ||||||
| 40 | South Carolina | ||||||
| 41 | South Dakota | ||||||
| 42 | Tennessee | ||||||
| 43 | Texas | ||||||
| 44 | Utah | ||||||
| 45 | Vermont | ||||||
| 46 | Virginia | ||||||
| 47 | Washington | ||||||
| 48 | West Virginia | ||||||
| 49 | Wisconsin | ||||||
| 50 | Wyoming |
Commercial casinos
Commercial casinos are founded and run by private companies on non-Indian land. There are 19 states (and one US Territory) that allow commercial casinos in some form: California, Colorado, Delaware, Florida, Illinois, Indiana, Iowa, Louisiana, Maryland, Michigan, Mississippi, Missouri, Montana, Nevada, New Jersey, North Carolina, Ohio, Pennsylvania, Puerto Rico, South Dakota, Washington, and West Virginia.The approximately 450 commercial casinos in total produced a gross gaming revenue of $34.11 billion in 2006.
Indian gaming
The history of reservation-based commercial gambling began in 1979, when the Seminoles began running bingo games. Prior to this, the Indians had no previous experience with large-scale commercial gambling. Native Americans were familiar with the concept of small-scale gambling, such as placing bets on sporting contests. For example, the Iroquois, Ojibways, and Menominees would place bets on games of snow snake. Within six years after commercial gambling among Indians developed, seventy-five to eighty of the three hundred federally recognized tribes became involved. By 2006, about three hundred American Indian groups hosted some sort of gaming.Some Native American tribes operate casinos on tribal land to provide employment and revenue for their government and their tribe members. Tribal gaming is regulated on the tribal, state, and federal level. Native tribes are required to use gambling revenue to provide for governmental operations, economic development, and the welfare of their members. Federal regulation of Indian gaming was established under the Indian Gaming Regulatory Act
Indian Gaming Regulatory Act
The Indian Gaming Regulatory Act is a 1988 United States federal law that establishes the jurisdictional framework that governs Indian gaming. There was no federal gaming structure before this act...
of 1988. Under the provisions of that law, games are divided into three distinct categories:
- Class I games are "traditional" games that involve little or no wagering.
- Class II games include bingo, pull-tabPull-tabA pull-tab is a gambling ticket that is sold as a means to play a pull-tab game. The object of the ticket is to open the perforated windows on the back of the ticket and match the symbols inside the ticket to the winning combinations on the front of the ticket. The winning Pull-Tab ticket is turned...
s, and certain non-banked card games (pokerPokerPoker is a family of card games that share betting rules and usually hand rankings. Poker games differ in how the cards are dealt, how hands may be formed, whether the high or low hand wins the pot in a showdown , limits on bet sizes, and how many rounds of betting are allowed.In most modern poker...
, cribbageCribbageCribbage, or crib, is a card game traditionally for two players, but commonly played with three, four or more, that involves playing and grouping cards in combinations which gain points...
, bridgeBridgeA bridge is a structure built to span physical obstacles such as a body of water, valley, or road, for the purpose of providing passage over the obstacle...
, whistWhistWhist is a classic English trick-taking card game which was played widely in the 18th and 19th centuries. It derives from the 16th century game of Trump or Ruff, via Ruff and Honours...
, etc.). - Class III games include all casino games (crapsCrapsCraps is a dice game in which players place wagers on the outcome of the roll, or a series of rolls, of a pair of dice. Players may wager money against each other or a bank...
, rouletteRouletteRoulette is a casino game named after a French diminutive for little wheel. In the game, players may choose to place bets on either a single number or a range of numbers, the colors red or black, or whether the number is odd or even....
, blackjackBlackjackBlackjack, also known as Twenty-one or Vingt-et-un , is the most widely played casino banking game in the world...
, baccaratBaccaratBaccarat is a card game, played at casinos and by gamblers. It is believed to have been introduced into France from Italy during the reign of King Charles VIII , and it is similar to Faro and Basset...
, slot machines and other games where the player bets against the house) and games that do not properly fall into classes I or II.
Of the 562 federally recognized tribes at the time, 201 participated in class II or class III gaming by 2001. Tribal gambling had revenues of $14.5 billion in 2002, from 354 casinos. Approximately forty percent of the 562 federally recognized tribes operate gaming establishments.
Like other Americans, many Native Americans have dissension over the issue of casino gambling. Some tribes are too isolated geographically to make a casino successful, while some do not want non-Indians on their land. Though casino gambling is controversial, it has proven economically successful for most tribes, and the impact of Native American gambling
Impact of Native American gambling
Impact of Native American Gaming can be positive or negative, depending on the tribe and its location. In the 1970s, various Native American tribes took unprecedented action to initiate Native gaming enterprises...
has proven to be far-reaching.
Gaming creates many jobs, not only for Indians, but also for non-Indians, and in this way can positively affect relations with the non-Indian community. On some reservations, the number of non-Indian workers is larger than the number of Indian workers because of the scale of the casino resorts. Also, some tribes contribute a share of casino revenues to the state in which they are located, or to charitable and non-profit causes. For example, the San Manuel Band of Mission Indians of California gave $4 million dollars to the UCLA Law School to establish a center for Indian Studies. The same tribe also gave $1 million dollars to the state for disaster relief when the area was ravaged by wildfires in 2003.
Although casinos have proven successful for both the tribes and the surrounding regions, state residents may oppose construction of Indian casinos, especially if they have competing projects. For example, in November 2003, the state of Maine
Maine
Maine is a state in the New England region of the northeastern United States, bordered by the Atlantic Ocean to the east and south, New Hampshire to the west, and the Canadian provinces of Quebec to the northwest and New Brunswick to the northeast. Maine is both the northernmost and easternmost...
voted against a $650 million casino project proposed by the Penobscots and Passamaquoddies. The project's objective was to create jobs for the tribes' young people. The same day the state voted against the Indian casino project, Maine voters approved a plan to add slot machines to the state's harness racing tracks.
The National Indian Gaming Commission
National Indian Gaming Commission
The National Indian Gaming Commission is an independent federal regulatory agency within the Department of the Interior. Congress established this agency through the Indian Gaming Regulatory Act in 1988. The agency has the duty to "promulgate such regulations and guidelines as it deems...
oversees Indian gaming for the federal government. The National Indian Gaming Commission (NIGC) was established under the Indian Gaming Regulatory Act
Indian Gaming Regulatory Act
The Indian Gaming Regulatory Act is a 1988 United States federal law that establishes the jurisdictional framework that governs Indian gaming. There was no federal gaming structure before this act...
in 1988. Under the NIGC, Class I gaming is under the sole jurisdiction of the tribe. Class II gaming is governed by the tribe, but it is also subject to NIGC regulation. Class III gaming is under the jurisdiction of the states. For instance, in order for a tribe to build and operate a casino, the tribe must work and negotiate with the state in which it is located. These Tribal-State compacts
Tribal-state compacts
Tribal-State Compacts are declared necessary for any Class III gaming on reservations under the Indian Gaming Regulatory Act of 1988 . They were designed to allow tribal and state governments to come to a "business" agreement...
determine how much revenue the states will obtain from the Indian casinos.
The Indian Gaming Regulatory Act requires that gaming revenues be used only for governmental or charitable purposes. The tribal governments determine specifically how gaming revenues are spent. Revenues have been used to build houses, schools, and roads; to fund health care and education; and to support community and economic development initiatives. Indian gaming is the first and essentially the only economic development tool available on Indian reservations. The National Gaming Impact Study Commission has stated that "no...economic development other than gaming has been found". Tribal governments, though, use gaming revenues to develop other economic enterprises such as museums, malls, and cultural centers.
Lotteries
The classic lottery is a drawing in which each contestant buys a combination of numbers. Each combination of numbers, or "play", is usually priced at $1. Plays are usually non-exclusive, meaning that two or more ticket holders may buy the same combination. The lottery organization then draws the winning combination of 5-8 numbers, usually from 1 to 50, using a randomized, automatic ball tumbler machine.To win, contestants match their combinations of numbers with the drawn combination. The combination may be in any order, except in some "mega ball" lotteries, where the "mega" number for the combination must match the ball designated as the "mega ball" in the winning combination. If there are multiple winners, they split the winnings, also known as the "Jackpot". Winnings are currently subject to federal income taxes as ordinary income
Ordinary income
Under the United States Internal Revenue Code, the type of income is defined by its character. Ordinary income is usually characterized as income other than capital gain...
. Winnings can be awarded as a yearly annuity
Annuity (US financial products)
In the United States an annuity contract is created when an insured party, usually an individual, pays a life insurance company a single premium that will later be distributed back to the insured party over time...
or as a lump sum
Present value
Present value, also known as present discounted value, is the value on a given date of a future payment or series of future payments, discounted to reflect the time value of money and other factors such as investment risk...
, depending on lottery rules.
Most states have state-sponsored and multi-state lotteries. There are only seven states that do not sell lottery tickets: Alabama, Alaska, Hawaii, Mississippi, Nevada, Utah and Wyoming. In some states, revenues from lotteries are designated for a specific budgetary purpose, such as education. Other states put lottery revenue into the general fund.
Multi-jurisdictional lotteries generally have larger jackpots due to the greater number of tickets sold. The Mega Millions
Mega Millions
Mega Millions is a US multi-jurisdictional $1 lottery game. Since it replaced The Big Game in May 2002 , Mega Millions' advertised jackpots have started at $12 million, paid in 26 yearly installments , increasing when there is no jackpot winner...
and Powerball
Powerball
Powerball is an American lottery game sold in 44 jurisdictions as a shared jackpot game. It is coordinated by the Multi-State Lottery Association , a non-profit organization formed by an agreement with lotteries. Powerball is a game whose advertised jackpot starts at $20 million and can roll into...
games are the biggest of such lotteries in terms of numbers of participating states.
Scratchcard games
Some state lotteries run games other than the lotteries. Usually, these are in the scratchcardScratchcard
A scratchcard is a small card, often made of thin paper-based card for competitions and plastic to conceal PINs, where one or more areas contain concealed information which can...
format, although some states use pull-tab
Pull-tab
A pull-tab is a gambling ticket that is sold as a means to play a pull-tab game. The object of the ticket is to open the perforated windows on the back of the ticket and match the symbols inside the ticket to the winning combinations on the front of the ticket. The winning Pull-Tab ticket is turned...
games. In either format, cards are sold that have opaque areas. In some games, all of the opaque material is removed to see if the contestant has won, and how much. In other scratchcard games, a contestant must pick which parts of a card to scratch, to match amounts or play another form of game.
States where certain types of legalized gambling have been repealed
On July 1, 2000 a new law took effect in the State of South CarolinaSouth Carolina
South Carolina is a state in the Deep South of the United States that borders Georgia to the south, North Carolina to the north, and the Atlantic Ocean to the east. Originally part of the Province of Carolina, the Province of South Carolina was one of the 13 colonies that declared independence...
where the ownership, possession and operation of a video poker machine either for commercial or even personal use became illegal. Violators are subject to prosecution and hefty fines. Currently the only type of legalized gambling in the state is the South Carolina Education Lottery
South Carolina Education Lottery
The South Carolina Education Lottery began in 2002.South Carolina is a member of the Multi-State Lottery Association , best known for Powerball...
.
External links
- American Gaming Association Gaming industry association
- National Indian Gaming Association Indian gaming industry association
- History of Gambling in the United States