Gambling in the United States is a sector marked by its complexity due to various legal restrictions. With gross revenues of $92.27 billion in 2008 and an industry worth $240 billion as stated by the American Gaming Association, gambling is a significant part of the American economy. It employs 1.7 million people across 40 states and contributed $8.85 billion in state and local tax revenues in 2016. However, the industry faces its share of criticisms and legal challenges.
The History and Growth of Gambling in the US:
Gambling in the United States has a rich history. The move by New Hampshire in 1963 to authorize a state lottery marked a significant shift in social policy. This opened the door for other states to use gambling as a means to raise funds without increasing direct taxes. Most states now run some form of lottery, with revenues often directed towards education and other state needs. This approach, however, has raised moral questions, particularly regarding states’ strategies to increase lottery participation.
Various Forms of Authorized Gambling:
The American Gaming Association categorizes gambling into several forms: card rooms, commercial casinos, charitable games and bingo, tribal casinos, legal bookmaking, lotteries, parimutuel wagering, and advance-deposit wagering. Each form has its own legal considerations and is subject to state-specific regulations.
Legality and Restrictions:
While gambling is legal under federal law, significant restrictions apply, particularly concerning interstate and online gambling. The Professional and Amateur Sports Protection Act of 1992, which effectively outlawed sports betting nationwide, was struck down as unconstitutional by the Supreme Court in 2018, leading to changes in sports betting laws across several states.
Forty-eight states allow some form of gambling, with the exceptions of Hawaii and Utah. However, casino-style gambling is more restricted. Federal law allows Native American Trust Land to be used for games of chance under specific agreements, as outlined in the Indian Gaming Regulatory Act of 1988. Only Louisiana and Nevada have legalized casino-style gambling statewide, with others limiting it to specific areas or to American Indian reservations.
Diversity in Gambling Legality Across the States
The legal landscape for gambling in the United States varies significantly from one state to another. This diversity is evident when examining the legality of different types of gambling across states and territories. Let’s delve into the specifics:
- Charitable Gambling: Most states allow charitable gambling, which includes games like bingo and raffles, often conducted by non-profit organizations for fundraising purposes.
- Pari-mutuel Betting: This form of betting, commonly associated with horse racing, is legal in many states. It involves pooling bets and dividing the pot among the winners, minus fees and taxes.
- State Lotteries: The majority of states have state-run lotteries, which have become a significant source of revenue. Lotteries are notably absent only in Hawaii and Utah.
- Commercial Casinos: The legality of commercial casinos, where games are played for profit, varies. States like Nevada and New Jersey are well-known for their commercial gambling industries, while others strictly regulate or prohibit them.
- Tribal Casinos: Many states allow casinos on Native American reservations under the Indian Gaming Regulatory Act. These casinos operate under a different set of regulations and are a significant part of the gambling landscape in the U.S.
- Racetrack Casinos: Also known as “racinos,” these facilities combine horse racing and casino-style gambling. They are found in several states, providing a hybrid form of gambling entertainment.
- Online Gambling: The legal status of online gambling is one of the most complex aspects. While some states allow it, others have strict prohibitions. The Federal Wire Act and the Unlawful Internet Gambling Enforcement Act have also influenced the online gambling scene.
- Sports Betting: Following the Supreme Court’s overturning of the Professional and Amateur Sports Protection Act in 2018, several states have moved to legalize sports betting. This has become a rapidly growing sector within the gambling industry.
For example, states like Nevada and Louisiana offer a wide range of legal gambling options, including commercial and tribal casinos, racetrack casinos, and sports betting. In contrast, Utah and Hawaii have an outright ban on all forms of gambling.
The Online Gambling Debate:
Online gambling in the US faces more stringent regulations. The Federal Wire Act of 1961, which outlawed interstate sports wagering, and the Unlawful Internet Gambling Enforcement Act of 2006, which targeted financial transactions related to online gambling, have shaped the online gambling landscape. Despite these restrictions, some operators have found ways to continue servicing US customers, leading to ongoing legal and regulatory debates.
The legality of gambling in the United States is a complex and evolving landscape. From state lotteries to tribal casinos and online betting, the sector navigates a myriad of legal frameworks. As the industry continues to grow and adapt, it remains a significant, albeit controversial, part of the national economy.