The United States Gambling Overview

In 1999 the gambling landscape is varied and complex. This chapter provides a snapshot of the scope and location of legal gambling activities in the United States,1 which occurs in a variety of places and takes many forms. The chapter also outlines each form of gambling, describing its scope and availability, and introducing some of the issues raised by each type of gambling.2

Lotteries held a prominent place in the early history of America, including an important role in financing the establishment of the first English colonies. Lotteries frequently were used in colonial-era America to finance public works projects such as paving streets, constructing wharves, and even building churches. In the 18th century, lotteries were used to finance construction of buildings at Harvard and Yale. Several lotteries operated in each of the 13 colonies in 1776.
Most forms of gambling and all lotteries were outlawed by the states beginning in the 1870’s, following massive scandals in the Louisiana lottery—a state lottery that operated nationally— and which included bribery of state and federal officials. The federal government outlawed the use of the U.S. mail for lotteries in 1890 and, in 1895, invoked the Commerce Clause to forbid shipments of lottery tickets or advertisements across state lines, effectively ending all lotteries in the United States.
The revival of lotteries began in 1964 when New Hampshire established a state lottery. New York followed in 1966. New Jersey introduced its lottery in 1970 and was followed by 10 other states by 1975. In 1999, 37 states and the District of Columbia have operating lotteries. Growth of Lotteries
Along with the lottery’s rapid expansion, lottery revenues have increased dramatically over the years. In 1973 lotteries were found in 7 states and had total sales of $2 billion. In 1997 lotteries existed in 37 states and the District of Columbia and garnered $34 billion in sales, not counting electronic gambling devices (EGD’s) sales3.This rapid growth is a result of both the expansion of lotteries into new states and increased per capita sales, from $35 per capita in 1973 to $150 in 1997.4 (See Table 2-1 and Figure 2-1.) In addition to expansion and increased per capita sales, technological advances have played a major role in lottery growth, especially on-line computer links between retail outlets and the central computer, which are required for the daily numbers games and lotto. Changing technologies also have allowed lotteries to branch out into new games enabling them to compete with casino-style gambling.

4 Ibid.