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Betting in the US

Published on: 08/08/2016

The biggest gambling industry worldwide is in the United States of America. In a typical year the market achieves in excess of $80 billion worth of revenues. The industry creates approximately one million jobs and over $5 billion in local and state tax revenue. The U.S. has 50 states and each one can enforce their own betting regulations within their particular regions.

During America’s formative years, people’s attitudes towards gambling and its laws varied from one colony to another. In some areas, all betting activity was illegal - to the extent where people were banned from owning games tables, dice or cards. Other areas held the British opinion that gambling was an enjoyable form of entertainment.

In the middle of the 19th century, the people’s views on gambling became more negative. When the Civil War ended, lotteries were started in an attempt to generate money for the rebuilding of the destroyed areas in the South. However, nationwide anti-gambling campaigns began in 1894. Horserace betting was even targeted, despite having been present for hundreds of years, and by 1910, only three states still permitted horse race betting.

In 1931, the state of Nevada decided to make gambling legal - an initiative taken to help the region recover from the Great Depression. After World War II, Nevada’s liberal gambling laws enabled the city of Las Vegas to boom - it soon became known as the entertainment capital of the world. However, the rest of the States took the opposite stance and banned all gambling, as well as lotteries. As a result, Nevada enjoyed a gambling monopoly.

The State of New Hampshire bucked the trend by starting a lottery in 1964. New York’s first state lottery began a few years later in 1967, and then New Jersey established its own lottery in 1971. New Jersey progressed to legalizing casino gambling in 1978. Currently, 16 US States (plus Puerto Rico) authorise licences for casino businesses, with eight of those States operating lotteries. The Native American Indians enjoyed “tribal gaming”, and this influenced the American gambling culture towards the end of the 20th century. The Indian reservations were classed as sovereign nations under U.S. federal law, giving them the right to arrange their own tax and gambling laws. Some settlements introduced bingo games throughout the 1970s, which later resulted in the creation of casinos at sites nationwide.

For a long time the Mashantucket Pequot Tribe managed the world’s biggest casino. It was named the Foxwoods Casino and was located in Connecticut. Eventually in 1996, the huge gaming hall was joined to the Mohegan Tribes Mohegan Sun Casino, which itself was almost as big.

The American legal departments continue to debate sports betting. Horse race betting on a pari-mutuel basis is permitted in New Jersey, and there are trackside wagering venues to be found in 26 other States. However, Nevada remains the only state where sportsbooks are able to legally offer gambling opportunities - as a result, the Nevada casinos facilitate all of the sportsbooks in the country.

America is far behind in terms of internet gambling. The Federal Interstate Wire Act founded in 1961, passed a law to prohibit bets being made across state lines - basically insulating Nevada. People using telegraph or telephone lines to wager between states were liable to face charges if found out.

Efforts were made to assign the Wire Act to online gaming - however, the endeavour was rejected by the law courts. In 2006, the U.S. Congress created a new regulation named the “Unlawful Internet Gambling Enforcement Act” aka UIGEA, which was passed by President George W Bush.

The legislation prohibits American financial organisations from handling transactions for online betting operators. Omissions were made for state-run lotteries, fantasy sports and horse racing, but it did spell the end of online sportsbooks, casinos and poker sites based within the U.S.

The penalties set by UIGEA have deterred gambling websites with licenses in other areas from accepting play from American citizens. In 2011, reports indicated that out of all of the world’s gambling web sites, under 30% conducted business with Americans. Having said that, approximately 290 online sportsbooks still entertain punters from the USA, while others only accept play from particular States which have more lenient regulations.