Legalized Gambling in the United States

Legalized gambling in the United States is increasingly under attack, not only within individual states regarding its proposed expansion into new jurisdictions, but also on the national level. This August, Congress enacted legislation that establishes a commission to investigate the social and economic consequences of gambling.

Despite the many forms of gambling that are currently permitted in most states, gambling opponents tend to focus on privately owned casinos while virtually ignoring state lotteries, which remain the most popular and widespread form of legal gambling. The preoccupation with casinos is puzzling, because almost every argument that is raised against casino gambling applies with greater force to lotteries.

Those making the moral case against gambling frequently depict casino patrons as hapless victims of unscrupulous "gambling kingpins." Their wagers, it is claimed, are born of desperation and ignorance. Yet casino patrons tend to have above-average incomes and education levels. A demographic profile of casino gamblers in the Washington, D.C. metropolitan area offers a glimpse of the kind of person who does — and does not — visit casinos.

According to Washingtonian, casino gamblers there "tend to be suburban couples with good jobs and grown children. Whites, Hispanics, and Asian-Americans frequent casinos at higher rates than blacks. Betters tend to be over age 50 with tweedy tastes, fond of theater, classical music, books, and European travel."

The profile of the non-casino gambler is no less interesting: "The fewest casino gamblers live near military bases… where large families with modest incomes have neither the time nor the money to roll the dice." National studies of gamblers are consistent with these findings.

Compared to lottery players, casino patrons are less motivated by a desire to win money because they perceive casinos primarily as forums for socializing and entertainment. While casino patrons tend to gamble in the company of spouses, friends, or associates from clubs and fraternal organizations, playing the lottery is a largely solitary pursuit. Indeed, even to speak of "playing the lottery" is misleading, for there is no element of play involved in the act of buying a ticket and waiting for the winning numbers to be announced.

Casino gambling, on the other hand, offers a smorgasbord of interactive games, in which the only way to participate is to play — employing strategy, skill, patience, and of course, luck.

In every state where casinos are allowed, public advertisements for casinos are strictly regulated. Indeed, in many jurisdictions casinos are flatly prohibited from advertising the gambling component of their operations.

Government-sponsored lottery advertisements, by contrast, are ubiquitous in nearly all of the 38 states that run lotteries. These ads appear in nearly every mass medium (e.g., television, radio, daily newspapers, and billboards), and are notorious for encouraging working-class people to regard the lottery as a viable way to make money-and escape from what the ads sometimes depict as dreary, dead-end jobs.

Thus one lottery ad featured a vendor at a sporting event who thinks to himself, "If I win Pick-6, I won't have to do this anymore." A billboard located in a crime-infested, impoverished neighborhood on Chicago's South Side displayed an Illinois lottery ticket with a caption that read simply: "This could be your ticket out." The ad did not merely fail to disclose the statistical improbability of such good fortune; it also revealed that the state was deliberately pitching its lottery to those least able to afford the luxury of gambling, and in a way calculated to appeal to the very anguish and desperation brought on, arguably, by the failure of other state policies.

The economic critique of gambling rests heavily on the notion that casinos deprive other businesses of revenue.

The implication for the validity of the substitution effect is clear: The availability of more disposable income means that new forms of entertainment, such as casino gambling, can coexist with, and need not supplant, existing forms of entertainment. To the extent that existing forms of entertainment suffer a decline in revenue, this more likely reflects a change in consumer tastes than any iron law of "substitution." Protecting existing businesses by erecting legislative barriers to casino development would run counter to the interest of consumers.

Given gambling's enduring place in American history — as both a popular pastime enjoyed by millions, and as a source of bitter controversy — it is naive to think that a national consensus on gambling will emerge any time soon. Thus, the appropriate locus for the debate over gambling lies exactly where it does today — at the level of state government. Yet for those who want a national gambling policy that reflects their personal predilections, the constitutional limits on the scope of federal authority are an inconvenient obstacle that must be overcome.

That is why the formation of a federal investigatory commission on gambling is an important victory for the national anti-gambling movement. For the commission, far from being a mere fact-finding body, represents the means by which federal power can be mobilized, not only against gambling, but against the rightful authority (and duty) of state governments to set their own policies on gambling.

–Robert R. Detlefsen

Robert R. Detlefsen is the author of Civil Rights Under Reagan. His most recent study "Anti-Gambling Politics: Time to Reshuffle the Deck" is available for $6 from CEI. To order, call 202-331-1010 or e-mail [email protected].