History of gambling Essay
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?In modern day America, gambling is seen everywhere. Whether it is gambling on a sporting event, a horse race, a game of cards, or any other event, it is seen as a common practice among many American citizens. The most popular place for one to gamble is a casino. There are many casinos throughout the country, and despite the many critics of such venues, these casinos are here to stay for quite some time to come. Starting in 1931, Nevada took control of the casino gambling market and held a monopoly within this industry.
It was the first state to have legalized commercial casino gambling, and it was the only state to have such legislation until 1976 (Morse, Goss 13-14). During the 1950’s, Las Vegas started to develop rapidly, opening many casinos within the city. Throughout the 1960’s most of these top-end casinos were purchased by Howard Hughes, which led to an ending of organized crime in the Las Vegas area. Corporations then began building and purchasing casino properties.
The profitability of such properties made entering the casino industry quite attractive.
This was the beginning of the transition of casinos from a simple form of gaming to a legitimate business (History of US Gambling). In 1976, commercial casino gaming was legalized in New Jersey, and Atlantic City began to thrive in ways similar to Las Vegas. This was the outcome that was hoped for, because it was done in an effort to revitalize Atlantic City. Casinos started to be built in Atlantic City, and a popular location for these casinos was the city boardwalk, along with in the marina district (Morse, Goss 14). More than a decade later, several states began to legalize commercial casino gambling.
There are currently fifty-seven counties in the United States that allow commercial casino gambling. In states other than Nevada, a good majority of commercial casino gaming takes place adjacent to a river or some form of a body of water that creates a geographic border dividing states. This promotes the idea of riverboat gambling, along with the competition between each state and their neighbors for their gambling supporters (Morse, Goss 14-15). Soon after the rapid expansion of legal gambling locations throughout the country, tribal casino gambling became an important part of today’s casino industry.
Tribal casino gambling is a practice that came to place after the 1987 Supreme Court decision in California v. Cabazon Band of Mission Indians. This case determined that the state of California did not have the proper authority to use its regulatory statutes for the gambling activities that took place on Indian reservations. The only institution that had complete authority over the issue was the federal government; therefore congressional authorization was necessary for state power to enact regulations. In 1988, Congress responded by passing and enacting the Indian Gaming Regulatory Act (IGRA).
This was done for the purpose of balancing both the interests of the states and those tribes that resided within them (Morse, Goss 18-19). There were many policy goals that the IGRA aimed to accomplish. The first was to promote economic development and self-sufficiency amongst tribes. The second goal was to create a regulatory base that protected Indian gaming from organized crime, to make sure that the only beneficiary of the gaming operations is the tribe itself, and to ensure that the gaming operations are both fair and honest.
The final goal was to establish an organization that would assist in these purposes, thus the creation of the National Indian Gaming Commission. Basically, the IGRA allowed tribes the right to build and run gaming facilities, or casinos, on their reservations to the same extent as the gaming allowed by state law (Morse, Goss 19). Tribal gaming has proven to be quite beneficial for Indian tribes in the United States. The tribes that have benefited the most are those that have exclusive rights to owning and operating casinos within their state.
That means that specific states have an agreement with the tribes in their state that there will not be any commercial casinos within the state, just tribal casinos on tribal territory. This creates endless opportunities for tribal members, allowing them to generate large revenues and provide jobs for many members of their tribe (Morse, Goss 20-21). More recently, a new type of casino has emerged quickly into the gambling business, that being racetrack casinos, or racinos. These casinos are essentially a horse-racing track, along with many other casino features, such as slot machines, video gambling terminals, card tables, etc.
This brings in a diverse crowd of people, for a lot of people only like to gamble on live racing events. It also helps states contain gaming expansion to their current racing grounds, and the economic benefits have quite a positive effect for the state (Morse, Goss 22). Each type of casino benefits the state in different ways. By a slight margin, there are more commercial casinos in the United States than tribal casinos, but tribal casinos are being built more rapidly (192 built between 2004-2007, as opposed to 175 commercial casinos built), so it is expected they will pass up commercial casinos in the near future.
States benefit most from commercial casinos, receiving on average 16. 4% of revenues, as opposed to just 6. 1% of revenue from the tribal casinos (Morse, Goss 23). One factor that has led to major success for casinos in the United States is the great amount of promotion and advertising. The average casino spends 2. 5% of all revenues on promotion and advertising, which is a heavy amount compared to many other business industries. Throughout the years of the existence of legalized gambling, casinos have been figuring out the secret to generating the highest possible revenue, and that is through promotion.
Promotions for casinos originally started out pretty basic, offering a patron a free bet if they come to the casino, or a free drink or meal. With the addition of hotels to many casinos, casinos began offering free night stays to customers, and sometimes even free transportation both to and from the casino for the time of their stay. Since then, there has been such an intense competition between casinos to attract gamblers to their establishment, so more and more promotions started to come into place and be offered by casinos around the country (Morse, Goss 27-28).
Some casinos found their best strategy was to pay their patrons to play. This came in either the form of simply handing the patron money upon walking in the door (usually between 5-$20, but sometimes upwards of $100), or paying the person for the amount of time they spent in the casino. This is done by activating a “player card”, and every time that player sits down to play a game, they scan their card at that station and the system keeps track of how much time the player has spent gambling. Their account is then credited with however much money they earned during their time spent at the casino (Ogwyn).
Competition between casinos continued to grow every year, and still does to this day. Promotions have become a necessity in order for a casino to succeed, and many amenities have become expected by patrons upon entering a casino. For one, soft drinks are expected to be complimentary at every casino. Many casinos have waiters and waitresses walking around taking orders, so there is a convenience of receiving a soft drink without needing to get up from your chair. It is seen as courteous to tip the servers, and is also seen as good karma for the gambling that is done after.
The most intense promotion competitions take place in the major casino markets. Harrah’s is a major casino corporation, and it is one of the highest spenders when it comes to promotions. In 2005, it initiated possibly the biggest promotion in casino history, and that was the $1,000,000 Treasure Hunt. To partake in the hunt, customers had to go to one of the many Harrah’s Casino locations in the country, and depending how much time the customer spent at the casino, they earned an entry (or multiple entries, depending on the frequency of visits) into the contest.
These entries represented an opportunity to partake in the actual treasure hunt, which took place in Las Vegas on November 10, 2005. A treasure chest containing $1,000,000 was placed in a remote desert location, and whoever found it first kept it all. This created an uproar of hype for Harrah’s Casinos, and has helped increase revenues in the following years since as well. Many other casinos learned from that, and started similar promotions to help boost their own revenues. This is a good example of how casinos have been learning from each other throughout time, and adjusting quickly to whatever is necessary for maximum business.
The bottom line when it comes to casino promotions: do whatever it takes to get customers through the door; revenues will generate from there (Morse, Goss 28). Many studies have been done to find the effect of legalized casino gambling in an area on the residents who reside in that area. A study done by Morse and Goss in 2005 had surprising results, finding that counties that legalized casino gambling experienced lower personal bankruptcy rates in the first several years of having a casino operating in the county.
After those years, however, it was found that the personal bankruptcy rates began to rise, eventually becoming higher than the rates from before the legalization of casino gambling (Morse, Goss 53). Casinos have been growing and expanding ever since their first existence. It is a unique industry in that, unlike many other large industries, it is not that crucial to focus on cutting costs, while instead it is best to just focus on generating revenues. As said before, this industry has a history of experiencing great success, and it is only getting greater and greater each year.
Looking at some statistics from 1998-2003 is a good way to show an example of this growth; the average number of employees for stand-alone casinos in the United States went from 201 in 1998 to 265 in 2003, and in casino hotels it grew from 988 to 1,208 employees. Average pay for these employees grew as well. In 1998, stand-alone casino employees earned on average $21,700 a year, while in 2003 they earned $25,100 a year. It was a similar jump in salary for casino hotel employees, going from earning on average $23,700 a year to $26,100 a year (Morse, Goss 55). Today, the United States has an incredibly large market for casino gambling.
There was an estimated 147 billion U. S. dollars in global revenue from casino gaming, and 60 billion of those dollars was from United States gambling. In the twenty states with legalized commercial gambling, there are about 450 commercial casinos in the United States (CASINO GAMBLING HISTORY). Gambling has been around since the beginning of United States history, and the creation and expansion of gambling centers that we call casinos has led to many opportunities for both growth and decline for citizens in this country. Whether viewed as positive or negative, casinos are here to stay for some time.