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 5: Pari-Mutuel Betting: A Distant Third

Richard A. McGowan

Subjects: politics and public policy, public policy


INTRODUCTION: HORSE-RACING, ITS HISTORY AND IMAGE Horse-racing has had a long and colorful place in American history. It has always been considered a ‘sport’ (that is, a game of skill) with all the positive connotations which that term has. Yet it was also part of the earliest American tradition, whereby the terms ‘sport’ or ‘professional sport’ were also used as synonyms for gambling. No horse-racing competition was considered ‘complete’ unless someone was willing to rise to the occasion, ‘to sport a little on the race’. This type of gambling differed from activities dependent entirely on chance, such as lotteries, the earliest form of gambling in the US. Because of the skill involved in racing horses, horse-racing has always been able to soften any potential image problems caused by the close interaction between gambling and racing. By the end of the seventeenth and early eighteenth centuries, horse-racing had developed into stake races between owners, generally wealthy American and English, and thus began the important relationship between gambling and racing, coming to be known as the Sport of Kings. Horse-racing was a sport for the rich where they could indulge their gambling urge (Forbes, 1995). From the 1920s through to the 1950s, horse-racing became the ‘tolerated’ form of legalized gaming in the US. It reflects a society’s preference for games that involved a certain amount of skill (that is, handicapping the race) and the ability of trainers and riders in winning the race. The industry also made a substantial contribution not only...

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