Gambling and Lotteries

Gambling and Lotteries. Since the founding of Jamestown in 1607, gambling has been a source of both pleasure and moral disapproval for Americans. The New England Puritans classified it with idleness and waste. Colonial elites feared its effect on the poor. Nevertheless, until about 1830, many Americans gambled in taverns and at cockfights, while gentlemen bet on horse races. Gambling typically occurred among acquaintances, seldom involving persons who earned a living by promoting it, and thus did not generally concern the criminal‐justice system. Indeed, colonial and later state governments sometimes chartered lottery companies to raise money for local improvements.

By the 1840s, under pressure from reformers, states began to ban lotteries and to criminalize gambling. The same period saw the emergence of a gambling culture and of illegal gambling entrepreneurs. Ever since, America has witnessed a shifting struggle between antigambling forces and an assertive gambling culture.

In the first stage of this struggle, until about 1900, state gambling laws became more specific, urban police were expected to fight gambling, and moral reformers mounted antigambling movements. Yet at the same time, gambling continued to flourish. On riverboats and trains, professional gamblers offered travelers card games and other games of chance. Gambling houses sprang up in cities and frontier settlements. Resorts like Saratoga Springs, New York, established elegant, illegal casinos. Gambling accompanied the rise of professional sports. Horse racing, boxing, and baseball were all, to varying degrees, occasions for betting, with gambling becoming a part of a male culture of sports, drinking, and socializing.

By the 1890s, city gambling had become increasingly coordinated. The growing popularity of horse racing led to on‐track bookmaking (determining odds and paying bets) and to off‐track bookmaking syndicates. Policy gambling (an illegal form of betting on daily numbers) similarly involved local syndicates. Bookmaking and policy syndicates were often backed by Irish Americans in saloons, barbershops, and other neighborhood outlets, so that syndicate backers became important local political figures.

In a second stage, the open and defiant gambling culture provoked a national antigambling crusade in the Progressive Era. Reformers, by creating a threat that bookmaking at racetracks might be raided, caused the closing of most racetracks in America. Urban reformers battled gambling houses and policy syndicates. Racetrack gambling gradually reemerged in the 1920s and 1930s, however, as many states, following the example of the Kentucky Derby, legalized pari‐mutuel betting, a system that pools the money from bettors and distributes it to the winners, minus a percentage kept by the track. Off‐track bookmaking, meanwhile, was transformed by technology as bets were increasingly placed by telephone. Numbers gambling, a new way to bet on a daily number, introduced into Harlem around 1920, soon surpassed policy gambling in popularity. As urban black ghettos grew in the 1920s, black entrepreneurs—later challenged by Jews and Italians—often replaced the Irish as heads of policy and numbers syndicates. Despite their illegality, small gambling houses and large casinos continued to flourish. Local governments often overlooked the bingo games in churches and the slot machines sponsored by the American Legion.

The third stage, beginning in the 1950s, saw a renewed war on gambling and, ironically, a movement for state‐operated lotteries and licensed casinos. The war on gambling grew chiefly from the widespread belief that a well‐organized “mafia” controlled illegal gambling and used the profits for loan‐sharking and drug trafficking. For the first time, the federal government entered the fight against gambling, using stringent federal laws that climaxed with the 1970 RICO statute (Racketeer Influenced and Corrupt Organizations Act). Federal enforcement virtually eliminated large illegal casinos, but a campaign against bookmakers proved unsuccessful. Although the declining popularity of horse racing gradually reduced illegal betting on the horses, after the introduction of the “spread” in the 1930s to equalize betting on each game, bookmakers increasingly took bets on college and professional football and basketball.

Concurrently, licensed casino gambling and state‐operated lotteries gained popularity, chiefly to raise state revenue but sometimes to undercut illegal gambling. In Nevada, where licensed casino gambling had existed since the early 1930s, Las Vegas blossomed as a gambling and entertainment center after 1945, often backed by ex‐bootleggers who ran illegal casinos in the 1930s and 1940s. In 1978, New Jersey launched casino gambling in Atlantic City. By 1994, twenty‐four states and some seventy Indian tribes had or were planning licensed casinos. New York launched a state lottery in 1967, and by the mid‐1990s more than thirty states had followed suit. In 1995, Utah and Hawai'i were the only states that had no legal gambling. The result was an upsurge both in betting by Americans, including compulsive gambling, and in the gaming industry's political power. Although legal gambling often failed to generate the income projected by its backers, state economies increasingly became dependent upon the revenues and jobs it created. Would this lead to another cycle of antigambling activism? The odds remained uncertain.
See also Indian History and Culture: Since 1950; Leisure; Organized Crime; Popular Culture; Puritanism; Stock Market.

Bibliography

John Samuel Ezell , Fortune's Merry Wheel: The Lottery in America, 1960.
National Institute of Law Enforcement and Criminal Justice , The Development of the Law of Gambling: 1776–1976, 1977.
Mark H. Haller , The Changing Structure of American Gambling in the Twentieth Century, Journal of Social Issues 35 (1979): 87–114.
Mark H. Haller , Bootleggers as Businessmen: From City Slums to City Builders, in Law, Alcohol, and Order: Perspectives on National Prohibition, ed. David E. Kyvig, 1985, pp. 139–157.
John M. Findlay , People of Chance: Gambling in American Society from Jamestown to Las Vegas, 1986.
Elliott J. Gorn , The Manly Art: Bare‐Knuckle Prize Fighting in America, 1986.

Mark H. Haller