Government and the Transformation of the Gaming Industry

Government and the Transformation of the Gaming Industry

Richard A. McGowan

The book is divided into three parts. The first part focuses on the historical and cultural forces that have shaped the new gaming industry. The second part of the book analyzes how each segment (pari–mutuel betting, lotteries and casinos) competes in the new industry. The political and social implications of gaming are the focus of the final part, which concludes with a series of recommendations that will enable the industry, public policy officials and anti–gambling activists to construct policies that mitigate some of the problems associated with gambling.

Chapter 1: A Brief History of US Gambling

Richard A. McGowan

Subjects: politics and public policy, public policy

Extract

INTRODUCTION In 1984, all forms of gambling (casinos, lotteries, pari-mutuel betting: the three segments of the gambling industry) accounted for less than $15 billion in revenues. In 1995, these gambling activities generated $55.3 billion in revenues, nearly a 400 per cent increase in 11 years. Gambling had become the largest component of the American entertainment industry. It had also become a means of salvation in terms of economic development for troubled urban areas ranging from Chicago to New Bedford, Massachusetts. But the multiple roles that gambling presently fulfils, namely a form of entertainment, a method of raising revenue for states and a measure that would provide economic relief for depressed areas, are hardly unique in American history. There have been five waves of gambling activity that have occurred in US history. This introduction will attempt to place the current boom in gambling activity in an historical context. It is hoped that this brief review will enable the reader to gain some perspective on how this current boom in gambling (or gaming as the casino industry would prefer) compares with previous booms in gambling that have occurred throughout US history. THE FIRST WAVE: STATE-SANCTIONED LOTTERIES (1607–1840s) The first wave of gaming activity (1607–1840s) that occurred in the US began with the landing of the first settlers, but became much more widespread with the outbreak of the Revolutionary War. During this time, lotteries were the approved form of gambling. A few of these lotteries were sponsored by states to help...

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