Gambling in America has a long history that can be marked in three segments. Many of the original settlers brought English traditions and beliefs, while the Puritans discarded those values. As a result, the tolerance of gambling was very much a regional attitude.  In New England and Pennsylvania, the Puritan values prevailed. In the Massachusetts Bay Colony, the possession of cards, dice and gaming tables was outlawed (even in private homes) as was dancing and singing.  In other colonies, gambling was viewed as a harmless diversion, as long as it was for recreation and not as a trade. Professional gamblers were considered unsavory, a theme which prevailed for over two centuries. 

   Lotteries were common throughout the early colonies as a way to raise revenue for the government. All 13 colonies established lotteries, and many of our most prestigious Ivy League universities were funded partially through lottery proceeds. In 1769, lotteries became an issue in the drive for independence when the English Crown tried to prevent lotteries from occurring without its permission. 

   Not all lotteries were successful. The Continental Congress voted a $10 million lottery to finance the revolution, but that lottery failed because it was too large and tickets could not be sold.  In 1823, Congress established a lottery to finance the beautification of Washington, D.C., but the organizers absconded with the proceeds and the winner was never paid.

   As America expanded west, gambling followed the frontier. During the early 1800s, gambling in the lower Mississippi Valley became a legitimate and organized enterprise, as New Orleans became the capital for gambling. Professional gamblers often preyed upon cash-laden travelers with dishonest games, cheating or confidence games. During the 1830s the actions of professional gamblers came under growing scrutiny, and settlers turned against them. Vigilante groups became the preferred method of regulation. 

   The Civil War brought about a change in public opinion. Issues such as temperance, women's rights, educational reform, prison reform, and abolition of slavery were on the minds of many, with the belief that people should behave in a virtuous way, and that gambling was immoral. Numerous instances of fraud and dishonesty in lotteries led to their prohibition in all states.

   The gold rush in California brought gambling to the West, until the legislature made most types of gambling illegal in 1860 by outlawing banked games. By 1891, it was illegal to play.

   The second era of gambling was short lived, born with the slot machine, invented and premiered in San Francisco in 1895. Cities licensed these machines which operated in the gray area of the law as “trade stimulators.” Virtually all licensing was done on a local basis, with the desire for tax revenue causing local authorities to overlook the anti-gambling laws. The emergence of the temperance movement around the turn of the century resulted in the prohibition of slot machines and all forms of gambling in the U.S. by 1910. 

   The third era began as the great depression led to a greater acceptance of gambling. Massachusetts decriminalized bingo in an attempt to help churches and charitable organizations raise money. In 1931, Nevada became the first state to legalize most forms of gambling.  Games of chance, including table games and slot machines, were licensed and taxed by the city or county based on the number of games or machines in operation. The calculation of taxes was simple, and as long as they were paid, little scrutiny was paid to the casino owners.

   In 1945, licensing authority shifted to the state level, and Nevada enacted a new program that, in addition to the per-game fees, taxed gaming at a percentage of gross gaming win.  As Nevada's economy became more and more dependent upon gaming as an economic engine, the fear of federal gaming prohibition and negative public sentiment grew larger. 

   During the 1950s, The Kefauver Senate Committee to Investigate Organized Crime in Interstate Commerce found widespread evidence of skimming, which sheltered gambling profits from taxes. 

   This prompted the Nevada state Legislature to create the Gaming Control Board in 1955. A division of the Nevada Tax Commission, the Board's primary purpose was to oversee the licensing and operation of Nevada casinos, while also eliminating the unsavory elements that threatened the industry's existing and future integrity. In 1959, the Legislature passed the Gaming Control Act, establishing the Nevada Gaming Commission, which acted upon the recommendations of the Gaming Control Board and was the final arbiter of all gaming licensing matters.

   In 1978, Atlantic City became the second location for legal gambling in the U.S. and with it the creation of the New Jersey Casino Control Commission. 1979 saw the Seminole tribe open the first reservation- based commercial gambling location, which prompted a boom in tribal gaming locations. In 1989, South Dakota and Iowa legalized gaming, followed by Mississippi, Louisiana and Illinois in the early 1990s.
Read Bill's article on The Role of the Gaming Regulator now.