Commercial gambling's history moves from underground to mainstream

Nov 1, 2013

If voters on Tuesday pass the proposed amendment to the state constitution to allow casino gambling, New York will become the 21st state to have commercial, Las Vegas-style casinos. Across much of the country nowadays, gambling seems like the natural state of things. But it wasn’t always that way.

If you’re a person of a certain age -- say about 50 -- you’ll remember when going to the casino meant a trip all the way to Las Vegas. It seems almost quaint now, but just a generation ago casinos were outlawed in 49 of 50 states. Only Nevada allowed legalized gambling.

Then, in 1978, amid great controversy, New Jersey decided to authorize a casino in hopes of rejuvenating the faded resort town of Atlantic City.

"Oh, it was a huge deal," said Father Richard McGowan, a professor of management at Boston College. He studies how business and government interact when it comes to gambling.

"All of a sudden, if you lived in the East Coast, you had about 30 million people who could go down to this casino and play," McGowan said. "Then they built a bunch of casinos."

The ground was prepared for that change, and what was to come, by something else we take for granted today. Fifty years ago New Hampshire became the first state to have a lottery.

"New Hampshire started their lottery in 1964, basically because they didn't want to have an income tax, so it was once a week drawing for 50 cents," McGowan said. "And people drove from all over New England and other places to try to buy one ticket."

Two decades later, 38 states had lotteries. Father McGowan says the lotteries made gambling morally acceptable, especially since the money was used for education, health care and other good causes.

That opened the gambling floodgates. A 1988 federal law, The Indian Regulatory Gaming Act, allowed Native American tribes like the Oneidas to run casinos on their land. Midwestern states allowed riverboat gambling, at first only as long as the boat was out on the water away from shore.  One by one, states began to drop their opposition.

A big driver of the trend, says Father McGowan, is the same reason that Gov. Andrew Cuomo gave last June for supporting the proposed amendment in New York.

"We need jobs in upstate New York and economic activity like we need oxygen," Cuomo said.

Some dispute whether casinos spur economic activity other than related service jobs, but there’s no question they bring money into the state coffers. With budgets tight, elected officials see casinos as providing revenue without raising taxes.

Now New York and other Northeastern states are getting into the game because they see money crossing state lines.

"When it was established that 25 to 30 percent of all gamblers in Atlantic City were from Pennsylvania, Pennsylvania politicians said you know what, I want the revenue back here," McGowan said. "That's why Maryland just legalized casino gambling, that's why Massachusetts is going to be legalizing casino gambling."

And where once gambling was seen as a shady or disreputable activity, it’s now seen as entertainment, especially among the young. Polls show about 85 percent of Americans now think gambling is acceptable, even if it’s not something they do themselves. Father McGowan calls it the ethics of tolerance.

"Basically, you should be able to do what you want as long as you don't harm someone else," McGowan said. "Most people will say I don't think it's a great activity, but if people want to do it, it's their business."

Some of those people, between one and two percent, will become addicted to gambling, with all the social costs that entails. But New York officials are willing to bet the benefits will be greater.

David Chanatry reported this story as part of the New York Reporting Project at Utica College. You can read more of the project's stories at their website,