History of gambling in the United States

In Chicago, like other rapidly growing industrial centers with large immigrant and migrant working-class neighborhoods, gambling was a major issue, and in some contexts a vice. The city's wealthy urban elite had private clubs and closely supervised horse racing tracks. The workers, who discovered freedom and independence in gambling, discovered a world apart from their closely supervised factory jobs. They gambled to validate the risk-taking aspect of masculinity, betting heavily on dice, card games, policy, and cockfights. Already by the 1850s, hundreds of saloons offered gambling opportunities, including off-track betting on the horses.[10][11] Historian Mark Holler, argues that organized crime provided upward mobility to ambitious people in poverty-stricken non-white communities. The high-income, high-visibility vice lords and racketeers built their careers and profits in these low-income neighborhoods, often branching into local politics to protect their domains.[12] For example, in 1868–1888, Chicago linchpin, Michael C. McDonald—"The Gambler King of Clark Street"—kept numerous Democratic machine politicians on expense accounting to protect his gambling empire and keep the reformers at bay.[13]

In larger cities, the exploitation, inherent in illegal gambling and prostitution, was restricted to geographically-segregated red-light districts. The business owners, both legitimate and illicit, were pressured into making scheduled payments to corrupt police and politicians, which they disguised as a licensing expense. The informal rates became standardized, for example, in Chicago in 1912, in ranges of $20 a month for a cheap brothel to $1000 a month for luxurious bordellos. Reformist elements never accepted the segregated vice districts and they wanted them all permanently shut down. In large cities, an influential system of racketeers and a vicious clique of vice lords was economically, socially and politically powerful enough to keep the reformers and upright law-enforcement at bay. Finally, around 1900–1910, the reformers with the support of law enforcement and legislative backing, grew politically strong enough to shut down the destructive system of vice and the survivors went underground.[14]

Segregated neighborhoods in larger cities starting in the late 19th century were the scene of numerous underground "numbers games", typically controlled by criminals who paid off the local police, they operated out of inconspicuous "policy shops" usually a saloon, where bettors chose numbers. In 1875, a report of a select committee of the New York State Assembly stated that "the lowest, meanest, worst form ... [that] gambling takes in the city of New York, is what is known as policy playing". The game was also popular in Italian neighborhoods known as the Italian lottery, and it was known in Cuban communities as bolita ("little ball").[15] In the early 20th century, the game was associated with big-city slums and could be played for pennies. The bookies would even extend credit, and there were no deductions for taxes.[16] Illegal gambling, which had the same organizers and support systems as illegal liquors in the 1920s, lead to powerful criminal syndicates in most large cities.[17]

Reformers led by the evangelical (Protestant) Christian movement, succeeded in passing state laws that closed nearly all the race tracks by 1917. However, slot machines, gambling houses, betting parlors, and policy games flourished, just as illegal alcohol did during Prohibition.[18] The Prohibition of most forms of alcohol, was an important reform for changes in social terms and health terms in America, but in the 1920s, due to the passing of anti-prohibition legislation, much of their influence was discredited. Horse-racing made their comeback in the 1920s, as state Governments legalized on-track betting as a popular source for state revenue and legalized off-track betting regained its popularity.[19]

The Great Depression saw the legalization of some forms of gambling such as bingo in some cities to allow churches and charities to raise money, but most gambling remained illegal. In the 1930s, 21 states opened race tracks.[20]

Some cities such as Miami, the "Free State of Galveston in Texas," and Hot Springs, Arkansas, became regional gambling centers, attracting gamblers from more prudish rural areas.[21]

At the turn-of-the-century in 1900, gambling was illegal but widespread in New York City. The favorite activities included games of chance such as cards, dice and numbers, and betting on sports events, chiefly horse racing. In the upper class, gambling was handled discreetly in the expensive private clubs, the most famous of which was operated by Richard Canfield, who operated the Saratoga Club.[22] Prominent players included Reggie Vanderbilt and John Bet-a-Million Gates. The chief competitor to Canfield was the "Bronze Door," operated 1891–1917, by a syndicate of gamblers closely linked to the Democratic machine represented by Tammany Hall.[23] These elite establishments were illegal and paid off the police and politicians as needed. The working-class was served by hundreds of neighbourhood gambling parlours, featuring faro card games, and the omnipresent policy shops where poor folks could bet a few pennies on the daily numbers, and be quickly paid off so they could gamble again. Betting on horse racing was allowed only at the tracks themselves, where the controls were tight. The most famous venue was Belmont Park, a complex of five racecourses, a 12,000 seat grandstand, and multiple stables, centred around a lavish clubhouse. Middle-class gamblers could frequent the city's race tracks, but the centre of middle-class moral gravity was strongly opposed to all forms of gambling. The reform movements were strongest in the 1890s. It was led by men such as the Reverend Charles H. Parkhurst, the leading Presbyterian pastor and president of the New York Society for the Prevention of Crime;[24] reform mayor William L. Strong, and his police commissioner Theodore Roosevelt. Reformers passed laws in the state legislature against any emerging gambling venue. Such laws were enforced and most of the small towns and rural areas, but not in New York's larger cities, where political machines controlled the police and the courts.[25]

Another common gambling activity during this period was betting on political elections. Betting on United States presidential elections from around 1868 to 1940 was practiced on a large scale, centered on New York city, which conducted an estimated half of the activity. The money spent on election betting even occasionally exceeded trading done on the stock exchanges of Wall Street. The odds from the betting markets were often used as a way to predict the outcome of an election. Election betting generally declined leading up to the second world war, due to a combination of factors, including increased legal restrictions, being crowded out by horse betting, and the rise of scientific polling like Gallup, which correctly predicted the outcome of the 1940 election.[26][27]

After 1870, Saratoga Springs became the nation's top upscale resort relying on natural mineral springs, horse racing, gambling, and luxury hotels. World War II imposed severe travel restrictions which financially ruined the tourist industry. Since 1970, there has been a revival with a renovated racetrack, a 28-day exclusive racing season, a new interstate, winter sports emphasis, and an influx of young professionals.[28]

Horse racing has a long history in Cleveland, as elites by the 1860s, worked to keep gamblers and criminals at bay.[29]

The Mayfield Road Mob, based in the Little Italy district, became a powerful local crime syndicate in the 1920s and 1930s, through bootlegging and illegal gambling. Local gangsters worked deals with the Jewish-Cleveland Syndicate, which operated laundries, casinos, and nightclubs. Both groups profited from illegal gambling, bookmaking, loan sharking, and labor rackets in northern Ohio.[30]

The "Harvard Club" (named after its Harvard street location in the Cleveland suburbs) operated in 1930–41, as one of the largest gambling operations attracting customers from as far as New York and Chicago. It moved to different locations on Harvard Street, which accommodated 500–1,000 gamblers who came to shoot craps and to play the slot machines, roulette, and all-night poker. It defied numerous raids until it was finally shut down by Frank Lausche in 1941.[31]

Eliot Ness, after building a crime-fighting national reputation in Chicago, took on Cleveland, 1934–1942. He tried to suppressed labor-union protection rackets, illegal liquor suppliers, and gambling, but his reputation suffered.[32]

The Las Vegas Strip became the nation's casino capital.

To overcome the Great Depression, Nevada legalised gambling as a way to bring economic relief.[33] In 1931, Nevada legalised most forms of gambling when Assembly Bill 98 was signed into law, providing a source of revenue for the state.[34] Interest in development in the state was slow at first, as the state itself had a limited population. After 1945, enforcement of gambling laws became more strict in most places and the resort 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 venues such as Galveston. Thanks to cheap air travel and auto access from California, Nevada, and Las Vegas, in particular, it became the centre of gambling 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 eliminating the city's connections to organized crime.[35]

Southern Maryland became popular for its slot machines which operated legally there between 1949 (1943 in some places) and 1968. In 1977, New Jersey legalized gambling in Atlantic City. The city rapidly grew into a significant tourist destination, briefly revitalising 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.[36] Gradually, lotteries and some types of parimutuel betting were legalised in other areas of the country.

In the 1990s, riverboat casinos were legalised in Louisiana and Illinois in addition to other states.[37] In 1996, Michigan legalised gambling in the city of Detroit, creating an economic centre for potential casino growth. In an attempt to curb the ill effects of the rapid rise in gambling on sporting events, Congress passed the Professional and Amateur Sports Protection Act of 1992.[38] This act was overturned by the Supreme Court in 2018, because the court deemed it was unconstitutional for the federal government to prohibit states from legalised it under state law.[38]

In the early 21st century, Internet gambling grew rapidly in popularity worldwide Global Internet gambling reaching US$34 billion in 2011. This is higher than worldwide movie box office revenues and represents 9% of the international gambling market.[39] However, interstate and international transactions remained illegal under the Federal Wire Act of 1961, with additional penalties added by the Unlawful Internet Gambling Enforcement Act of 2006.

• Asbury, Herbert. Sucker's Progress: An Informal History of Gambling in America (1938), covers numerous cities
• Cunningham, Gary L. "Chance, Culture and Compulsion: The Gambling Games of the Kansas Cattle Towns." Nevada Historical Society Quarterly (1983) 26: 255–271.
• Dasgupta, Anisha S. "Public Finance and the Fortunes of the Early American Lottery." QLR 24 (2005): 227+. Online
• Henricks, Kasey and David G. Embrick. ed. State Lotteries Historical Continuity, Rearticulations of Racism, and American Taxation (2016) Online
• Karmel, James R. Gambling on the American dream: Atlantic City and the casino era (2015).
• Peck, Gunther. “Manly Gambles: The Politics of Risk on the Comstock Lode, 1860–1880,” Journal of Social History 26 (1993)
• Riess, Steven A. The Sport of Kings and the Kings of Crime: Horse Racing, Politics, and Organized Crime in New York 1865–1913 (Syracuse UP, 2011).
• Royer, Jennifer Baugh. "A dark side of Dixie: Illegal gambling in Northern Kentucky, 1790–2000" (PhD dissertation, Texas Christian University, 2009) Online.
• Taylor, Troy (2010). Wicked New Orleans: The Dark Side of the Big Easy. Arcadia Publishing. ISBN 9781614230113.
• Weaver, Karol K. "“It's the Union Man That Holds the Winning Hand”: Gambling in Pennsylvania's Anthracite Region." Pennsylvania History 80.3 (2013): 401-419. Online
• Williamson, Ron. Frontier Gambling: The Games, the Gamblers, & the Great Gambling Halls of the Old West (2011). excerpt

• Clotfelter, Charles T., and Philip J. Cook. Selling hope: State lotteries in America (Harvard UP, 1991).
• Dasgupta, Anisha S. "Public Finance and the Fortunes of the Early American Lottery." QLR 24 (2005): 227+ Online
• Ezell, John. Fortune’s Merry Wheel: The Lottery In America (1960). online free to borrow
• Goodman, Robert. The luck business (Simon and Schuster, 1996), attacks gambling.
• Neal Millikan, Neal (2011). Lotteries in Colonial America. Routledge. p. 2. ISBN 9781136674464.
• Munting, Roger. An economic and social history of gambling in Britain and the USA (Manchester UP, 1996). excerpts
• Watson, Alan D. "The Lottery in Early North Carolina." North Carolina Historical Review 69.4 (1992): 365–387. Online