History of Gambling in the United States

Gambling in the United States has a long and storied history. In fact, American colonists were betting on the outcome of events long before the United States of America existed. Despite our puritanical past, many Americans enjoyed games of chance.

Two Cultural Traditions Shape America

In fact, as soon as we stepped off the boats on the East Coast, a dichotomy existed between the new arrivals. Traditional Englishmen enjoyed gambling, so these salty English settlers brought their favorite forms of gaming to the British colonies. These people wanted freedom from the stifling traditional class structure of England, to live life as free men on the own terms.

Another group of Englishmen came to America seeking freedom, but freedom of another kind. The Puritans were a sect of English Protestants who appeared in the 1500’s and tried to remake England as a moralistic, perfect society. Into the 17th century, they continued to struggle to remake England, but by the 1620’s, they realized this was a failure. The Puritans moved to Holland first, and then to the New World. When they came, they wanted to construct a perfect society free of sin.

These two traditions clashed in those days and, in many ways, continue to clash over American culture and politics in the 21st century. Gambling laws make a telling record of these clashes, as the American people have seen periods where they favored more gambling, and then eras when they banned it altogether. But gambling has been a cornerstone of this country from the beginning.

Revolutionary War Raffles

In fact, an independent American government might never have existed, if it were for gambling. When the Continental Congress sent the Declaration of Independence to the King of England and rebelled against his authority in 1776, its politicians had a difficult time funding the War of Independence. Until the French agreed to back the American cause in 1778 after the Battle of Saratoga, the Congress was constantly scraping together funds for the Continental Army led by General Washington. One of the chief ways they raised funds was through raffles. These became key factors in raising the money to continue the war, at least until the French entry into the war allowed the Founding Fathers to borrow funds from the big European banking houses.

Early United States

This open attitude towards gambling continued in the early decades of the USA. Freedom from central government was important to the men who fought for that freedom, so Americans faced little legal repercussions for gambling. Lotteries and raffles were widespread, while games like faro and blackjack were popular among the people. Horse racing, dog racing, and cock fighting were popular.
In the early decades of the 1800’s, the American frontier was on the Mississippi River. Settlements were being built along the Mississippi, while old French towns like St. Louis and New Orleans were growing into cities. In these days, riverboat travel was becoming the key to settling the Mississippi River delta. Riverboat gambling became a part of the American culture at the time, and the riverboat gambler entered American folklore.

By the 1830’s, New Orleans became the center for gambling in the United States. Criminal enterprises began to spring up around gaming, and Americans on the frontier began to take justice into their own hands. Riverboat gambling began to get a bad reputation, as the professionals would come to local settlements and take advantage of the farmers. In the decade of the 1830’s, settlers in Mississippi lynched 5 professional gamblers. This proved effective in driving away gaming activities in certain riverside communities, but the period from 1840 to 1860 became the apex of the riverboat gambling lifestyle.

Outlawing the Lotteries

The 1830’s was a decade of reform in the United States. Andrew Jackson came to the presidency as an outsider, the first president not from Virginia or New England. He reformed the American banking system, and people of the country wanted to eliminate corruption in other areas of their society. New York, Massachusetts, and Pennsylvania outlawed lotteries in their states in 1833. By 1840, all U.S. states had outlawed lottery gambling, due to widespread corruption in the result.

Gambling on the Frontier

American in the 19th century was about a frontier going ever westward. By and large, the first settlers to an area were men, and the men of the time enjoyed gambling. A pattern emerged where frontier towns would grow into boom towns, usually over a gold rush or the cattle trade. Saloons would house cards and dice games. When the women arrived at a later stage, they wanted less gambling and less carousing at the saloons. Schools and churches replaced some of the saltier establishments, and reform would come to the region.
As reform movements came to the Mississippi River region, new frontiers opened out west. The United States won the rights to California in a war with Mexico from 1845 to 1848. In 1849, as Americans moved into California, gold was discovered. This started a gold rush to Northern California, making San Francisco a major western city. As always, gambling became a major part of the local culture, and San Francisco became the new capital of gambling in America.

The gold rush would end by the mid-1850’s. Over the next decade, Americans began to concern themselves with the issue of slavery. The inclusion of so much territory in the Mexican War brought with a question the country’s leaders couldn’t answer: would that territory be slave-holding or free?
As the Civil War was being fought to determine the answer, American investors were building a transcontinental railroad to link east to west. Congress passed the National Railway Act in 1862. Railway companies started on either end and built from what is now the American Midwest and from San Francisco. By 1869, the first of five transcontinental railways linked up.

Old West Saloons

After the Civil War ended in 1865, many Americans were looking to rebuild their shattered lives. For many, settling on the frontier was the best hope. Recently freed slaves could hope for land and new start in the west, where hard work was valued over customs. One-fourth of all cowboys were African-Americans. Northerners tired of living in cramped, increasingly industrial northern cities could hope for free land and a new lifestyle out west. Southerners really by defeat or fearful of losing jobs to freed slaves also could find new land. With railroads making the journey easier, Americans relocated in hundreds of settlements throughout the American west.

Many of these people were traumatized by the war. Placed in a lawless environment in the western expanses, this wave of settlement created what we now know as the Old West. In the Old Western saloons, gambling became a major pastime of cowboys on the cattle trails, local farmers, and workers on the railroads. Faro, which has a strong resemblance to baccarat, was the game of choice.
The same pattern played out in the Old West. Professional gamblers gained a bad reputation, and lynching of gamblers began in San Francisco as early as 1856. In the pre-state territories, anti-gambling laws were weak or non-existent. Even when states were formed, the laws were often weak. But as the west became more settled, laws began to be enacted. From 1860 onward, banking games (players versus the house) were outlawed.

Louisiana Lottery

Back in the east, the Louisiana Lottery became the chief gaming company for many states. In 1868, the U.S. Congress approved a 25-year license for the Louisiana Lottery. Because officials were bribed to see the law through, the lottery gained an immediate bad reputation. Still, the license continued through the 1870s and 1880s. Former Confederate generals P.G.T. Beauregard and Jubal Early held the drawings, while Charles T. Howard and John A. Morris collected the profits. The lottery was ended in the early 1890’s, but not before giving lottery gaming a bad reputation in the USA.

Slot Machines

San Francisco saw the invention of the slot machine in the 1890’s. Charles Fey, a German-born immigrant, built the Liberty Bell machine and started placing them in saloons in the early 1900’s. These machines paid out money at first, but laws quickly made this illegal. Instead, the machines contained small prized, gum, or fruit—which is why they often had fruit symbols on the reels (“fruit machines”). By 1910, slot machines were outlawed in many western states and cities. Throughout the next few decades, Charles Fey would continue to try to sell his machines, but it would take a new era of gambling to make them a big success.

Gambling in Nevada

The early 1900’s were a time of reform in the United States. Teddy Roosevelt was a trust buster as president from 1901 to 1909. Women agitated for the right to vote, which was passed in 1920. The temperance movement also was strong in this era, strong enough that Prohibition was passed in 1920. In this era, gambling became an outlawed practice throughout most of the USA.

Nevada, which had legalized gambling up until 1910, had followed the rest of the nation by banning games of chance from 1910 until 1931. When the Depression began, the State of Nevada began having serious trouble raising state funds. In 1931, Nevada lawmakers agreed to legalize gambling. Over the next ten years, investors began to build casinos in the Nevada Desert. When the Hoover Dam was completed in 1936, settlement in that desert became more viable. By the 1940’s, Las Vegas (30 miles from the Hoover Dam) began to see large-scale construction of casinos—often with mob funds.

Las Vegas was built to attract gamblers from the growing city of Los Angeles. In the late 1940’s and 1950’s, Americans were experiencing a new prosperity. After living through the Great Depression and the terrors of World War II, Americans wanted to get back to the business of making money. Though they had a strong work ethic, the new American middle class also wanted to enjoy their fruits of their labor by taking vacations to interesting places. Las Vegas became one of the favorite destinations for such people.

Las Vegas casinos offered all sorts of games, from blackjack and roulette to the increasingly popular poker. Slot machines were a diversion for many, but they didn’t yet have the popularity which would come decades later. Vegas casinos began to sign famous musical acts to put on shows for the tourists, so that men as disparate as Frank Sinatra and Elvis Presley became associated with Las Vegas.

Reno and Atlantic City

Other gambling destinations sprang up. Reno attracted gamblers from San Francisco and northern California. The legislature of New Jersey passed laws in the late 1970s, opening up the Atlantic City Boardwalk to casino gambling. This would presage big gambling establishments all over the country, in places like Tunica and Gulfport, Mississippi.

Lottery Gambling Returns

Also in the 1970s, U.S. states began to reintroduce lottery gambling. This time, the gaming was run by the state-licensed companies. Often, politicians sold these state lotteries as a chance to raise money for education, though they were really just a way to swell the state’s treasury. These games had the worst odds of any form of gambling, but also offered the biggest prizes.
As time passed, the state lotteries began to compete with the multi-state lotteries: Powerball and Mega Millions. These would grow from a small number of states in the multi-state lottery associations until they had up to 43 different states competing. These lottery games saw jackpots in the tens of millions, and sometimes in the hundreds of millions, of dollars.
Charitable gambling had a resurgence, too. Charities offered bingo nights, poker nights, and pickles games. These non-profit organizations might include church groups, civic organizations, and police and fire departments.

Pari-Mutuel Wagers

Pari-mutuel wagering also became a big industry. The Kentucky horse racing industry became world famous, as the Kentucky Derby was broadcast to the entire world. This was just a part of a web of racetracks which offered betting on race day. The Triple Crown races including the Kentucky Derby at Churchill Downs, the Preakness Stakes at Pimlico in Maryland, and the Belmont Stakes near New York City. The Breeders Cup also became a prestigious annual race.
These were the races at the pinnacle, but a web of racetracks sprung up across the United States. Thoroughbreds, harness racing, and greyhound tracks all became prevalent. In time, off-track betting was available in certain locations, while the gaming machines were placed at the track, creating “racinos”.

Native American Casinos

A landmark case before the Supreme Court in the late 1980s also paved the way for Indian casinos. In the 19th century, many Native American tribes signed treaties with the United States government. Despite the one-sided nature of these treaties, they were tacit admission by the American government that Indian tribes represented foreign nations.

This meant Native American reservations could be seen as foreign territory, and the Supreme Court confirmed the Indian tribes had legal sovereignty over their reservations. If the local tribe could come to a compact with the U.S. state whose borders they were inside, they could provide legal gambling venues even in states where casino gambling was illegal.
Over time, a large network of Indian casinos have appeared across the American landscape. Some of these are among the largest in the world, taking into account casino floor space. The Mohegan Sun and Foxwoods in Connecticut and the Winstar in Oklahoma are among the most notable such establishments.

Online Gambling in the US

Another major innovation was online gambling in the United States. As the mainstream of Americans were joining the Internet, software programmers created ways for people to gamble online. In the mid-1990s, software development companies like Microgaming and Playtech were designing software. Major USA online casinos, sportsbooks, and poker rooms were launching in 1996, 1997, and 1998. The American online gambling community was the largest and most profitable in the early days of the Internet.

This only increased after Chris Moneymaker’s win of the 2003 World Series of Poker. Televised Texas hold’em competitions became a staple of cable television, while the field at the WSOP Main Event swelled from a few hundred players to several thousand. Americans had never found it easier or more exciting to gamble. The online variety of gambling came to an end in 2006, when the U.S. Congress passed the Unlawful Internet Gambling Enforcement Act. Though many Americans continued to gamble online after the UIGEA, the biggest online casinos and poker rooms left the American market.

This might not be a permanent exit. One thing the history of gambling in the United States shows us is the gambling laws are never permanent. Attitudes change as the American culture changes. As the moral framework of the USA evolves, US laws will evolve. The underlying fact is that many Americans love to gamble, even if a large segment of America has an ambivalent attitude to games of chance. This explains an often contradictory set of US gaming laws.

History of US Gambling

This page from the California Library provides a nice history of gambling in the United States. As you might expect from a California-based library, much of the later information focuses on the American Frontier and the Old West, so you won’t see much about the Louisiana Lottery of the 1800’s or the creation of Atlantic City. Still, it provides a nice overview, especially in the early days of American gambling.

History of Las Vegas

If you want to research the storied history of America’s gambling capital, this page from the Las Vegas Convention and Visitors Authority offers a history of Las Vegas itself. The timeline is broken down into seven different eras: Up-to-1899, 1900-1989, 1990-1994, 1995-1999, 2000-2004, 2005-2009, and 2010-Present. As you can tell, the information is going to deal more with the recent history of Vegas than anything. The timeline is divided into red-letter days instead of detailed paragraphs, so those who prefer to scan should be in luck. This is a good primer for those who want to know the high points of Las Vegas expansion and renovation.
Nevada 150 Articles

The Review Journal’s Nevada 150 provides articles and other content covering the 150 year history of Las Vegas. You can learn how earthquakes shaped LV history, or what the early Mormon settlements were like. Or readers can learn how Carson City was connected to the American entertainment industry. Use the internal search engine to research more of Las Vegas’s long history.