All In: The Spread of Gambling in Twentieth-Century United States

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Introduction

JONATHAN D. COHEN AND DAVID G. SCHWARTZ

Gambling represents a major economic and cultural phenomenon in the twenty-first-century United States. Forty-eight states have legalized either casinos or a lottery and, in the coming years, gambling may become nearly ubiquitous as it expands onto the internet. Meanwhile, offline gambling remains a widespread consumer activity. Approximately 70 percent of Americans regularly engage in some form of betting. In 2015 alone, Americans spent over $70 billion on lottery tickets and gambled another $70 billion at commercial and tribal casinos.¹ Gambling’s popularity has translated into prominence in the public sphere as well. From presidential March Madness brackets to media frenzies over the latest record-setting Powerball jackpot, gambling holds a prominent place in national political, consumer, and popular culture.

Legal gambling is notable not only for its popularity but also for the speed with which it spread across the United States. At the turn of the twentieth century, legalized betting of all forms was in decline. In 1890, the Louisiana State Lottery Company, the last of a long line of sweepstakes reputedly organized for the public benefit, had been throttled by federal law. At the state level, betting on horse races was under similar attack. By 1910, every state but Kentucky and Maryland had banned this form of gambling. Even Nevada, which had maintained a policy of wide-open, nonlottery gaming since 1869, enacted a prohibition on commercial gambling in 1909. In the early twentieth century, the United States appeared to have outgrown legalized gambling, offering no indication that the illegal vice of the Progressive Era would become a hallmark of corporate capitalism by the 1990s.

This collection examines the causes and consequences of the spread of gambling in the United States over the course of the twentieth century. In particular, All In offers a contingent history of gambling. Scholars, advocates for the gaming industry, and even federal investigators have claimed that gambling represents an ahistorical impulse, an inexorable desire that, if only released from legal limitations, would spread like wildfire across the United States.² The truth is far more complicated. The legal and cultural status of gambling did not change on its own. Rather, the evolution of legalized gambling represented a gradual, uneven process facilitated by particular historical actors acting under particular cultural, economic, religious, and political conditions.

All In provides a closer examination of the historical contexts that facilitated the spread of gambling. It sheds light on some of the players who, intentionally or not, helped legitimize and legalize gambling, from members of the Las Vegas Chamber of Commerce to corrupt police officers in New York City to Ojibwe tribal leaders in North Dakota. No single factor accounts for gambling’s dramatic expansion. The ten essays in this collection highlight the complex motivations that facilitated the spread of gambling as well as some of the effects of its legalization for American government, the private sector, and the betting and nonbetting public.

The general narrative of the history of gambling in the twentieth-century United States is one of expansion, followed by retraction, followed in turn by an even larger wave of expansion. At century’s start, most forms of gambling were criminalized. Then a few simple realities interfered: Americans continued to gamble despite numerous prohibitions; criminals and later corporations became rich by exploiting the public’s seemingly insatiable desire to place a bet; and state governments faced mounting budgetary shortfalls but an unwillingness to raise taxes. To varying extents, each of those three factors would be responsible for what came next. Starting in the 1920s, gaining vigor in the 1960s, and finally bursting through in the 1980s and 1990s, a series of legalizations dramatically transformed gambling in the United States and brought about its present-day pervasiveness.

The rise of legal gambling in the twentieth century started with pari-mutuel wagering. In the Progressive Era, gambling opponents charged that betting and bookmaking had corrupted the sport of horse racing. Pari-mutuel betting, in which prizes are determined by the total amount bet, divvied up the wager pool, removing bookmakers from the equation and guaranteeing slices of revenue for the track and the government. Florida (1925) and Illinois (1927) were forerunners in this enterprise, but the economic woes of the Great Depression accelerated the march of gambling: ten states legalized pari-mutuel in 1933 alone. Desperate for revenue, four states even legalized slot machines during the 1930s and 1940s.³

In 1931, Nevada took a bet on betting when its state legislature reintroduced full commercial gambling. Within thirty years, the state’s economy centered largely around gaming-related tourism. Two factors drove Nevada’s sudden, massive dependence on an activity illegal almost everywhere else in the country. First, other states continued to prohibit casino gambling, thereby providing Nevada a monopoly on an apparently popular diversion. Second, Nevada lacked other sustained means of industrial or commercial development. Despite the isolation of its casinos in the western desert and the eventual torrent of organized crime over state lines, the new laws in Nevada and around the nation seemingly indicated a gradual liberalization of national antigambling policy.⁴

In the early 1950s, however, the Kefauver Committee blunted that momentum. Through a series of widely televised hearings, Senator Estes Kefauver (D-TN) introduced many Americans not only to the prevalence of illegal gambling but also to its ties to the criminal underworld in Las Vegas and elsewhere. In the aftermath of the committee meetings, most states maintained pari-mutuels, but every state except for Nevada recriminalized slot machines. While some states passed laws allowing charitable or religious groups to hold bingo games, proposals to legalize casino gambling or lotteries failed to gain significant traction. Yet the testimony elicited by the committee and other midcentury antigambling investigations contained the seeds for the ultimate failure of Kefauver’s campaign. State and federal legislators could pass laws against gambling, but they could not as effectively stop the widespread practice of numbers betting or other forms of illegal gambling at the grassroots. Though voters supported politicians who campaigned against gambling, many continued to gamble, even if their losses funded organized crime.⁵

Thus, after a brief period of stagnation, legalized gambling grew at a ferocious pace beginning in the 1960s. The first wave of public-interest gambling in the 1920s and 1930s represented an initial step toward reconciling the public’s appetite for gambling with the concerns of both law enforcement and budget-conscious state officials. Politics kept states from legalizing more forms of gambling in the 1950s, but the lure of easy money was too great to resist for long, and voters, state officials, and the private sector took action to legalize gambling around the country. The revival of legal lotteries, starting with New Hampshire in 1964, sparked a new wave of gambling expansion. Thirteen states had formed a lottery by 1976; in 1989, the number had reached thirty-two, including the District of Columbia.⁶ Similarly, New Jersey’s legalization of casino gaming in Atlantic City in 1976 kicked off a wave of casino expansion, a boom that came to tribal lands after the Supreme Court’s decision in California v. Cabazon Band of Mission Indians (1987) and the passage of the Indian Gaming Regulatory Act (1988).⁷

At the end of the century, gambling on horse racing, lotteries, and casino games had spread across the United States, and Americans of all different backgrounds wove gaming into their daily lives. Indeed, the history of gambling provides a window into broader cultural, political, and economic changes in the history of the United States as well as crucial insight into how and why some of these changes occurred. In particular, gambling exposes a crucial facet of the relationship of culture and the law. Each of the three major legal gambling industries at the end of the twentieth century—racing, lotteries, and casinos—had widespread, popular, and significant antecedents in poolrooms, numbers games, and illegal urban slot machines and near-urban casinos. Americans continued to gamble after legalization, but government involvement has changed a great deal about the structure and experience of gambling. In the twenty-first century, taxes are withheld from winners, sponsoring bodies make at least a modicum of effort toward curbing problem gambling, and gambling itself has a more prominent place in public life.⁸ Yet the history of gambling lies not only in a legalistic discussion of state regulation but also in the battles over gambling in corporate offices, voting booths, churches, synagogues, and tribal reservations. Closer examination of these debates illustrates how individuals acting under specific historical conditions normalized gambling as a pleasurable and profitable American pastime.

This collection presents ten chapters that examine different facets of the transformation of American gambling over the twentieth and into the twenty-first centuries. Their methodological differences—from the fields of history, American studies, English, communications, and Jewish studies—highlight the wide-ranging effects of gambling in the United States as well as the breadth of scholarly approaches available in the study of gambling.

The opening section, Policing, deals with the complications involved in law enforcement’s regulation of illegal gambling in the turn-of-the-century American metropolis. Gamblers and police engaged in a long cat-and-mouse game that shaped both how bettors placed wagers and how law enforcement regulated betting. Ultimately, illegal gambling declined in the post–World War II period not because of effective policing but due to the choices state and business officials made under a confluence of political, economic, and cultural conditions.

In the opening chapter, Matthew Vaz examines the cyclical nature of the policing of gambling in New York City. Between 1894 and 1972, city officials conducted four major investigations into police corruption stemming from bribes for protection of illegal gambling. Each scandal resulted in a brief period of heavy-handed policing followed in turn by reversion to the status quo, as reform-minded gambling opponents refused to address the financial factors that prompted police to take bribes. Vaz argues that intractable antigambling corruption paradoxically facilitated the liberalization of vice regulation, as state and police officials realized they could never eliminate or effectively police illegal gambling.

In Chapter 2, Seth Tannenbaum demonstrates law enforcement’s frustration with gambling conducted inside baseball stadiums. Sports betting posed a serious danger to professional baseball in its early years, as municipal officials threatened teams’ legal status unless team owners policed gambling inside their ballparks. Therefore, especially after the Black Sox Scandal of 1919, owners sought to give the appearance of cracking down on gamblers. Yet owners also sought to make sure they did not harass gamblers to such an extent that they affected ticket sales among working-class baseball fans, many of whom were casual bettors. Tannenbaum illustrates the various methods used to control in-stadium betting and explains how this form of gambling declined as suburban ballparks reshaped baseball fans’ experience, thereby eliminating opportunities for wagering.

Since the Nevada state legislature relegalized commercial gambling in 1931, Las Vegas has served as the gambling capital of the United States. Part Two, Promoting, studies how Las Vegas officials marketed Sin City to American tourists and gamblers and illustrates how shifting attitudes toward gambling shaped how the city was advertised in the post–World War II period. City officials and business executives carefully managed associations between Las Vegas and gambling, as the city’s casinos represented an opportunity to attract tourists but also threatened to repel visitors who perceived the city as immoral and unsavory.

In Chapter 3, Larry Gragg examines the efforts of the Las Vegas Chamber of Commerce to reshape the city’s image. Until the 1950s, Las Vegas held an unfavorable reputation as a den of drinking, prostitution, and gambling. Gragg explores the formation of the Desert Sea News Bureau, a professional public relations operation that carefully repackaged the city as a western getaway and star-studded entertainment hub. By inundating newspapers nationwide with highly curated coverage of Las Vegas, the News Bureau sought to change public conception of the city by, ironically, ignoring the gambling that, for most visitors, continued to lend Las Vegas its primary appeal.

In Chapter 4, Jessalynn Strauss examines a similar process of promotion in the late twentieth century, providing an in-depth study of casino press releases. Strauss contends that even after the rise of corporate Las Vegas casinos, gambling did not garner full acceptance as a legitimate business enterprise, in part because of lingering associations with organized crime. The traditional, staid practice of issuing press releases served two purposes for casinos’ corporate management. First, amid an increasingly crowded and monotonous industry, casinos could promote their unique offerings, ranging from entertainment to restaurants to gambling games. Second, casino executives could reshape gambling into a reputable business practice worthy not only of tourists but of investors as well.

Part Three, Proliferating, explores the dynamics of the spread of gambling. The expansion of gambling outside Nevada—most prominently the legalization of state lotteries and casinos—was not the organic result of changing opinions about gambling. This section illustrates the particular economic conditions, political forces, as well as corporate interests that facilitated the legalization of gambling around the country.

In Chapter 5, Jonathan D. Cohen examines the creation of the New Jersey Lottery in 1969. A budget crisis in the Garden State in the 1960s led to what Cohen calls fiscal alchemy, the magical belief that legalized gambling represented a financial panacea that could singlehandedly balance the state budget and reduce taxes without cutbacks in state services. Through analysis of the arguments raised by voters and politicians on both sides of the issue, Cohen explains how fiscal alchemy led to the overwhelming approval of New Jersey’s lottery as well as the Garden State’s role in accelerating the expansion of lotteries throughout the Northeast in the early 1970s.

While Cohen illustrates how taxpayers and state officials prompted the spread of gambling, in Chapter 6 David G. Schwartz demonstrates the role played by the private sector, exploring the previously overlooked work of gaming corporations to expand casinos beyond Las Vegas in the late twentieth century. Schwartz charts shifting national attitudes toward gambling in the post–World War II period, highlighting the political circumstances that created fertile soil for the spread of gambling. Especially following the legalization of casinos in Atlantic City, profit-hungry Las Vegas gaming corporations found eager partners in revenue-starved state governments that were eager for the jobs and income promised by the casino industry.

Gambling’s expansion was not without its critics. In particular, journalists often highlight opposition to legalized gambling from religious organizations, especially conservative Protestant churches. Part Four, Praying, provides a powerful counter to this narrative, offering two examples of the interaction of religious people with the gambling industry, not as its opponents but as its employees and collaborators. These chapters examine religious communities that viewed gambling not as antibiblical or immoral but as a moneymaking enterprise that could support holy causes.

In Chapter 7, Michelle Robinson examines evangelicals’ encounter with Nevada’s gambling industry. Through a study of conservative Christians who found work in Las Vegas casinos, she explores how evangelicals reconciled their faith with economic opportunity and how they subtly created spaces for conversion in the spiritual wasteland of Sin City. Robinson further explores the collaboration between evangelicals and casino executives in organizing Billy Graham’s 1978 Crusade, illustrating an overlooked moment of harmonious cooperation between gambling interests and the nation’s most prominent preacher. Though Las Vegas business executives saw the Crusade as an opportunity to improve their reputation and widen their customer base, the city’s evangelical community saw a chance to draw attention to the nascent Christian presence on the notorious Strip.

In Chapter 8, Dan Judson also explores gambling and religious outreach, highlighting a longstanding relationship between gambling and Jewish philanthropy in the United States. Beginning in the eighteenth century, American synagogues used lotteries to raise revenue outside the Jewish community. These practices endured into the twentieth century, and Judson explores the controversy over synagogue-hosted bingo within Conservative Judaism. Because of Jewish texts’ ambiguous treatment of gambling, Conservative movement doctrine vacillated between approval and disapproval of synagogue-hosted bingo, in part due to the influence of Protestant antigambling campaigns. Through a case study of a synagogue in suburban Boston, Judson illustrates why congregations turned to gambling and how they resolved the contradiction between spiritual values and economic needs.

Finally, Part Five, Playing, explores some of the consequences of the legalization of gambling through the intersection of gambling with individual and collective identity. The vast economic inequality of the late twentieth and early twenty-first centuries prompted widespread crises regarding class, gender, and racial status, and these chapters demonstrate how individuals and groups attempted to use gambling to overcome uncertainty. In particular, this section shows how gambling fit into pursuits of prestige and preservation in an era of corporate