A Brief Historical Review On The Gambling Industry In The U.S.


While we may think that gambling is a fairly modern pastime in the United States, there's actually a long history of gambling in some form or other; with acceptance of both legal and illegal forms of gambling moving back and forth from prohibition to regulation. According to Professor I. Nelson Rose, one of the world's leading experts on gaming law, the acceptance of various forms of gambling appeared to follow three distinct periods (or waves) of regulation, beginning during the colonial period right up until the present day.

From 1600 to the mid 1800s

Historians believe that gambling in the early colonies started with two different groups of settlers; the English settlers who brought with them their traditional English beliefs and customs, and the Puritans, with their own distinct set of values and beliefs. Depending on the area in which they settled, different attitudes towards gambling were established. For example, in areas where the Puritans settled, such as New England and Pennsylvania, most forms of gambling, including cards, dice and gaming tables were outlawed, together with other social activities such as singing and dancing. 

In colonies established by non-Puritan settlers, there was a far more liberal attitude towards gambling, with these settlers seeing this kind of activity as a harmless pastime. The popularity of such activities seemed to fit in with the adventurous spirit of the colonists, and their desire to create a brand new world, despite the risks involved. However, in spite of the initial acceptance of gambling, the tides soon turned with gambling getting the blame for the problems which began to arise throughout the colonies.

While gambling was initially seen as the source of the problems in the colonies, the financial backers in England soon began to see it as a possible solution. This brought about the introduction of a lottery system, started by the Virginia Company of London, who began to hold lotteries to raise much needed funds for the company's colonial venture, although these lotteries were short lived as they were banned due to a multitude of complaints.

However, gambling still remained a popular recreational activity with regular betting on wrestling matches, and dog and rat fights, and the introduction of riverboat gambling, especially on the Mississippi where, by the mid 19th century, over 2,000 gamblers plied their trade. The Civil War brought about the demise of riverboat gambling as it featured heavily in the gun battles between the Union and Confederate soldiers, although other forms of gambling did continue.

From the mid 1800s to the beginning of the 20th century

The popularity of gambling started to rise again from the middle of the 19th century. It's been suggested that the Gold Rush and the exodus of settlers to the Wild West resulted in this resurgence, as once more the frontier spirit emerged. Between 1849 and 1855 many new gambling establishments were opened and gambling became a common distraction for the miners who'd settled on the West Coast. Once again, this tolerance was short-lived; there was a shift in public opinion and the establishment quickly banned gambling in all the states. Of course, this just had the effect of sending gambling underground, as people searched and found new ways to continue the activity outside of the law.

This period also saw regulations come into force which were aimed more at professional gamblers, rather than at gambling itself. In an attempt to 'clean up' society and make it more respectable, the authorities attempted to raise awareness of the dangers of gambling. However, the early gambling laws were weak and ineffectual, meaning that many gamblers were happy to flout the laws. This changed in the early 1900s as stronger laws were put into place; laws which were far more firmly enforced by the authorities. Strict penalties were introduced for those found to be running gambling games, in addition to the gamblers themselves. This made it increasingly difficult to be involved in gambling on any level. Yet, over a period lasting just thirty years, gambling gradually climbed back up from underground and many cities saw a re-emergence of gambling and gaming establishments.

From the 1930s to the current day

Known as the 'current or third wave of gambling' the period from 1930 onwards saw big revival in gambling and gaming activity as the state of Nevada legalized gambling. This legalization, combined with the general lenient attitude toward gambling due to the Depression, was seen as a way to revive the flagging economy. It was also seen as a way to lessen illegal gambling, which by then had grown immensely. From the 1930s onward, the gambling industry in the United States saw a slow but steady process of consolidation, as the revenues earned in gambling establishments grew year on year, reaching the staggering figure of $30 billion in 2005.

One of the main reasons for this massive upsurge in gambling is all down to the internet. All forms of online gambling, including online bingo, have become very popular, not just in the States, but worldwide.  However, despite its popularity, online gambling remains illegal in the vast majority of states, with only New Jersey, Delaware and Nevada having chosen to legalize online casinos. It is expected that more states, including Iowa, Massachusetts and California will follow suit in the coming years, but if US gamblers wish to place online bets, they're currently severely limited, especially as US federal laws still make it illegal for US credit companies to process charges linked to gambling establishments.

There is no doubt that the online gambling industry will continue to grow, although it's unlikely that widespread legalization is in the cards, as anti-gambling governors do their best to slow down the process.