Gambling and Americans' ambivalence toward it are woven into the country's history. Lotteries helped fund the Revolutionary War, build Harvard College, and pay for the construction of the nation's capital. In the Old West, poker games were the stuff of which legends were made. All the while, religious forces were fiercely trying to pass laws against it.
"It boomed through the 1800s, until it finally died out in the 1890s with a lottery scandal in, of all places, Louisiana," says Frank Fahrenkopf, head of the American Gaming Association, the industry's lobbying arm in Washington, D.C.
By 1909, every state, even Nevada, had outlawed gambling. It wasn't until the Depression and the decline of mining revenues that bedrock-conservative Nevadans decided to become home to the nation's vices. In the early 1930s, they legalized the "quickie" divorce (stay six weeks and leave a single person) and gambling. Gangster Benjamin (Bugsy) Siegel moved in, and the image of the high-rolling, mob-infested glitter gulch was born.
At once glamorous and seedy, Las Vegas remained the only legal home of gambling until 1963. That year, New Hampshire legalized the lottery. Within a decade, a dozen states had followed. By the 1980s, more than 30 states had lotteries.
"I think the change in the atmosphere, the acceptability of the way people look at gambling, can be traced to the legalization of the lotteries in the '70s," says Bernard Horn, executive director of the National Coalition Against Legalized Gambling. Specifically, he points to the legalization of TV commercials for state lotteries in 1973: Suddenly, the government went from permitting gambling to urging Americans to gamble.
The more recent, ready acceptance of high-stakes casino gambling has come about rapidly, arguably during the past 10 years as cash-strapped state governments turned from lotteries to casino gambling as another "painless" way to raise revenues.
New Jersey legalized high-stakes casino gambling in Atlantic City in 1976, with mixed results. In 1987, the federal government ruled that native Americans could open casinos on their own land, if gambling was allowed in the state in any form. Then Iowa, facing a recession and a yawning budget deficit, took the plunge and approved high-stakes riverboat gambling in 1989. Since then, 21 states have legalized casino-type gambling, and another 10 have permitted slot machines and video poker at racetracks and bars.
Today, all but two states, Utah and Hawaii, allow some form of legalized gambling.