Gambling in American History

Paraguay, perhaps the most remote country in South America, is a landlocked country surrounded by Argentina, Bolivia, and Brazil. It is a founding member of the Southern Cone Common Market (MERCOSUR). The other members of MERCOSUR are Argentina, Brazil, and Uruguay. The four countries of MERCOSUR have eliminated import tariffs and have a free exchange of goods, services, capital, and labor. Paraguay has about 5.5 million inhabitants residing in an area of about 157 thousand square miles.
Paraguay permits almost all forms of gambling, including horse racing, lotteries, cockfighting, bingo games and casinos. Casinos have been located in all the major urban areas of the country: Asuncon, Ciudad del Este, and Pedro Juan Caballero (Greater Asuncon area). Paraguay also has small gaming casinos operated by local owners holding government licenses. With the exception of the operations in Asuncon, the capital of Paraguay, the casinos are very small. The Ita Ramada was the leading facility prior to the overthrow of Pres. Alfredo Stroessner in 1989. Soon afterward it became overshadowed by the casino at the Asuncon Yacht Club.
Casino gambling began under the regulation of the national government in 1943 when a casino opened in a hotel in downtown Asuncion. The casino owner, Sr. Valentino, formed a corporation that later developed the Ita Enramada Hotel and Casino resort complex on the Paraguay River in suburban Asuncon. The casino relocated to the Ita Enramada facility in 1975.
The Asuncon casino operated under a long-term concession granted by the government of President Stroessner. Valentino’s wife, Dora Valentino, maintained operations after his death. She also owned the casino at Ciudad Puerto Presidente Stroessner (now Ciudad del Este), the Paraguayan border city near Iguazu Falls, the Brazilian city of Iguazu Falls, and the Argentinian city of Port Iguazu (which has a casino). The Valentino company also held concessions to operate a weekly national lottery game, a quinela game, and bingo in Asuncon. The Catholic University has operated the sports pool (PROBE), and horse-race betting has been under the control of other private operators. Small casinos in other communities have been operated by local owners holding government concessions.
The Valentino company’s monopoly over major gaming activities received a serious setback after President Stroessner was deposed in February 1989. Dora Valentino’s concession for the casino at the Hotel Acaray in Ciudad del Este expired. Unexpectedly, it was not renewed, and the concession was awarded to a group of Brazilian businessmen. They moved the casino to the Club Rio Del Este in downtown Ciudad del Este. That casino closed. The Acaray Palace Hotel and Casino is again open, but under new owners who also operate the Amambay Suites Hotel across the street from the Acaray.
Dora Valentino began constructing a $30 million, 250-room resort hotel just north of the city near a proposed major international airport. The foundation and shell of what could have become the largest hotel in the nation was built. Intentions were to move the casino to the facility. Construction halted, however, when casino plans stalled. The government had given only one casino concession for each region. Obtaining another concession in Ciudad del Este proved a difficult process. As the new hotel is technically outside the city and within the Hernandez region, Dora Valentino has claimed that the area is eligible for a second casino.
While the Valentino company argued for a second casino in the Ciudad del Este area its competitors won the right to have a second and third casino (besides the Ita Enramada Casino) in Asuncon. Another casino is at the Asuncon Yacht Club (the Paraguayan Hotel and Casino and Yacht and Golf Club). The Asuncon Yacht Club Casino has outclassed the Ita Enramada Casino.  The Ita Enramada Casino is eight miles downriver from downtown Asuncon on the Paraguyan River. The Asuncon Yacht Club Casino is also on the Paraguyan River about four miles downriver from downtown Asuncon. Concessions for the casinos were extended in 1995.
Besides the casinos at Asuncon and Ciudad del Este, the cities of San Bernardino and Pedro Juan Caballero have casinos. The San Bernardino Hotel and Casino is in San Bernardino on Lake Ypacarai. The La Siesta Hotel and Casino is in Pedro Juan Caballero, a city on the Brazilian border, opposite the City of Ponta Pora, Brazil. The Amambay Casino is on the outskirts of Pedro Juan Caballero, and the La Siesta Casino is in the downtown area of the city. In addition, there is a bingo casino in the city of Encarnaci-n, which is in southern Paraguay on the Argentina border, opposite Posadas, Argentina.

Panama has had a national lottery and casino gambling during most of its history as a nation. The Republic of Panama gained its independent status in 1903 following a separatist revolution from Colombia, which was supported by the United States. The US then negotiated for rights to dig the Panama Canal and control its operations. A Canal Zone area was put under the American flag, and U.S. military bases were located in the zone. The U.S. presence as well as canal activities has brought people from all over the world to Panama, and the country looked to these people to support casino activities. The lottery, however, has been marketed to local residents, and it has served a social welfare function – first, by giving jobs to many persons who sell tickets and administer operations, and second, by dedicating its profits to programs to help the poor.
The U.S. military left the Canal Zone and invaded the governmental center in Panama City in 1989 in order to capture Pres. Manual Noriega because of his involvement in the drug trade.  That invasion involved a major firefight and the loss of hundreds of lives. Along with the invasion, the United States imposed an embargo on Panama. The hostile policies had the effect of killing any tourist-type activity for many years. On 1 January 2000, the US gave up control over the operations of the Panama Canal and by that time had withdrawn almost all its military from Panama. The withdrawal removed much of the market that had existed for casino gaming in the earlier years. Panama has readjusted with new government initiatives for redeveloping a new tourism opportunities. Casino gaming has returned to the tourist package, and the government has authorized new casinos with private ownership.
The first casinos in Panama were also under private control. Several gaming rooms were opened in the Old Balboa Gardens region of Panama City. They offered dice, roulette, and blackjack games. In the early 1940s, several gaming establishments came to the Plaza Cinco de Mayo in Panama City and to the city of Colon, where the canal meets the Caribbean Sea. After a government change in 1945, all casinos were placed under central ownership of three Panamanians who won a government concession for the activity. In the early 1950s the government permitted several casino gaming activities to be held for the benefit of the Red Cross and other charities. The private and charity gaming ventures came to an end in 1956 when the national government took over the casinos.
A national casino administration was established within the Ministry of Finance and Treasury. Its goal was to enhance tourism and to generate greater revenue from tourists as well as from Americans stationed in Panama and other businesspersons coming to the country. The national policy was directed at the placement of casinos in hotels. In the late 1950s casino activity began in the El Panama, Continental, Granada, and Siesta hotels. In 1965 a new national law reorganized the casinos, permitting their location in hotels located in cities over 200,000 population with a capital value of $1.5 million. The law also authorized slot machine–only casinos in other locations. At the time of the U.S. invasion, the government operated ten full-scale casinos in six Panama City hotels, two in Colon hotels, and one each in the city of David and on Contradora Island (which was exempt from the population requirement). Six Panama City hotels had slot machine–only casinos as did three shopping centers, three airport locations, a bar, bowling alley, and five smaller cities. The full casinos offered blackjack, roulette, craps, and poker games, as well as slot machines.
According to my interview with gaming board officials in Panama City on 27 December 1998, in 1997 the government shifted its policies, realizing that its casino administration did not have the resources to fully develop the industry for tourism. Privatization was authorized. Bids were accepted from thirteen prequalified companies to run the casinos. Three companies were granted licenses to run casinos for twenty years. At that time licenses may be renewed. The casino facilities must be located in new five-star (and old four-star) hotels that have 300 rooms. The facilities may be open twenty-four hours a day. They must have security cameras, and new slot machines must be centrally linked together on computer systems. The casinos must advertise the tourist aspects of their facilities. In addition to annual licensing fees, the casinos pay a tax equaling 20% of their win. Slot machine–only casinos pay a tax of 25%.
Today, Crown Casinos runs casinos at the Granada, Continental (slot machines only), and Caesars Park hotels in Panama City. The Thunderbird, a Vancouver, British Columbia–based company, has casinos at the El Panama and Solon hotels in Panama City, as well as the Washington hotels in Colon and David. A third corporation runs separate slot machine parlors and has slot machines in the Panama City airport.

See Japan and Pachinko.

See Japan and Pachinko.

Pres. Richard Nixon signed the Organized Crime Control Act of 1970 into law on 15 October. The act was in reality a long list of ideas rather than a comprehensive coherent package of tools with which to deal with organized crime. Some called it “a smorgasbord of legal odds and ends” and a series of “nuts and bolts” for dealing with crime.
Among the matters of concern in the act was gambling. The act provided federal tools for enforcing state provisions on gambling under certain conditions. Penalties were provided for persons who financed, owned, managed, supervised, or directed an illegal gambling enterprise. The illegal enterprises had to involve five or more persons who acted contrary to state and local law to participate in gambling over a period of thirty days or more with revenues involved exceeding $2,000 for a single day. If two people conspired to break a state law on gambling and one was a public official, the federal government was also empowered to take action against the offenders. The act also authorized the appointment of the Commission on the Review of National Policy toward Gambling, which was appointed in 1974 and made a report of its findings in 1976.

Oregon has authorized several forms of gambling activities. I have gathered information on these activities during several visits to the state, including participation in a faculty seminar, “Oregon Games: Don’t Leave It to Chance”, at the School of Urban Studies and Planning, Portland State University, on 14 November 1997.
In 1984 the voters approved a lottery by a margin of 66% to 34%. The lottery started operations in 1985. The lottery was conducted with traditional lottery games at first. In 1989 the lottery was then modified to include betting on sports events through parlay cards, and it was later modified for making wagers at video lottery terminals. The state of Oregon is one of only four states that is permitted to have sports betting. All bets are made on parlay cards, which require the player to pick winners of at least four games. Point spreads are indicated on the cards for football and basketball games. The winnings are paid on a pari-mutuel basis. Proceeds from the sports betting are dedicated to university athletic programs.
The state has also permitted card games with financial prizes to be played among players in bars, restaurants, and fraternal clubs (the various establishments may not be participants in the game) and bingo games to be conducted by charitable organizations. Oregon also has had horseracing with pari-mutuel betting for several decades.
These gaming authorizations provided the legal foundation for Native American tribes in Oregon to negotiate agreements with the state so that they could offer casino-type games. The authority for Native American gaming is granted in accordance with the Indian Gaming Regulatory Act of 1988. Seven tribes started casinos with machine gaming and bingo in their facilities. Agreements were amended to allow blackjack games. The casinos are operated by the Grande Ronde Indian Community (Grande Ronde), Umatilla Indian Reservation (Pendleton), Warm Springs Reservation (Warm Springs), Klamath Tribes (Chiloquin), Coquille Indian Tribe (North Bend), Cow Creek Band of Umpqua Indians (Canyonville) and Siletz Indians (Lincoln City).
Two of the tribes have negotiated agreements that permit them to offer all games that are authorized by the Nevada Gaming Control Board for Nevada commercial casinos.  These are the Grand Ronde and the Cow Creek. In exchange for this privilege to have all games, the tribal organizations agreed to provide a community assistance fund equal to 6% of the gaming revenues for local areas. The other tribes are positioned to negotiate for such agreements if they wish to do so. All the tribes pay the state fees to cover the costs of regulating the games.

Ontario is the most populated province of Canada, with nearly 9 million people. It also produces the largest share of gaming revenues of any province. The three commercial casinos of the province generate 55 percent of all the casino revenues in Canada, and the leading racetracks of Canada are also located in Ontario. Nearly 65 percent of the racing handled in Canada is wagered in Ontario. The Woodbine track in Toronto hosted North America’s premium racing card, the Breeders’ Cup, in 1997. The tracks also have the most successful gaming machine operations in Canada. Ontario also has the most profitable lottery operation in Canada.
Ontario is clearly a leader in gaming volume today, but the province trailed others in initiating gaming operations. The lottery did not start until 1975, and lotto games were not in place until five years later. Instant tickets were not sold before 1982. The Ontario Lottery Corporation was responsible for overseeing charity gaming; however, until the mid-1990s charities could only sell raffle tickets and break-open tickets (similar to pull tabs) and conduct bingo games.
The Ontario Lottery Corporation may have hesitated a bit, but in the 1990’s it went into high gear. In 1993 it made a decision to have major casinos. To “test the waters” it authorized a pilot project for Windsor. Windsor was chosen for an obvious reason that provincial leaders made no attempt to conceal. Quite to the contrary, they boasted that the Windsor casino would market its gaming products to residents of the United States, more specifically residents of the Detroit metropolitan area. Only a one-mile waterway – the Detroit River – separated Windsor from Detroit, and there were two border crossing stations – a bridge and a tunnel. It was projected that 80 percent of the casino’s revenues would come from the United States. The Ontario Lottery Corporation secured a remodeled museum and art gallery building for a temporary casino. The government owned the casino, but it contracted with a consortium consisting of Caesars, Hilton, and Circus Circus companies to run the casino. The casino opened in May 1994, with greater than anticipated success. Seventy table games and 1,700 slot machines collected more revenue per square foot than had ever been collected in any casinos anywhere. Continuous crowds led the province to purchase a riverboat (the Northern Belle) and open it as a second Windsor casino. No longer was Windsor a pilot project. In 1998, a permanent facility was opened in a 1.2-million-square-foot facility on the riverfront. The facility included all the amenities of a Las Vegas casino – a hotel of 400 rooms, showrooms, multiple restaurants, and of course a gaming area of 100,000 square feet with 3,000 slot machines and 130 table games. The two temporary casinos closed.
Success is measured in many ways. One thing the success of Windsor’s casinos generated was a massive concern in the Detroit area over revenues leaving not only the city but also the country. Detroit retaliated by voting in 1995 to approve a nonbinding resolution supporting casinos. Then in 1996, the voters of the state of Michigan made it binding as they voted for a new state law permitting three casinos for the city of Detroit. The first one opened in 1999.
While things were happening in southwestern Ontario, the Ontario Lottery Corporation decided that more casinos should be located elsewhere. In 1996 temporary casinos were opened in Niagara Falls and also in Orilla. Although a temporary facility, the provincially owned Niagara Falls casino was managed by the Navagante Group – led by several former casino executives from Las Vegas. Soon the revenues at the Niagara Falls facility came to surpass those in Windsor. In November 1998, the corporation entered into an agreement with Hyatt Hotels for the construction of a permanent casino facility, which was to have a 350-room hotel, convention center, arts center, and cinema complex, along with show rooms, restaurants, and a 100,000-square-foot casino. The province also planned to place casino gaming in the popular Skylon tower that oversees the falls. Hyatt was to manage the new facilities in conjunction with a new management group of Americans. The facility is under construction as of 2001.
A new project is also slated for the Casino Rama in Orilla. As would be expected, this gaming hall has exceeded expectations. It is only one hour north of the Toronto metropolitan area. Casino Rama is owned by a Chippewa Band of First Nations peoples.  The casino is operated by Carnival Cruise Lines’ casino division.
The three commercial casinos give 20 percent of their revenues directly to the Ontario provincial treasury; however, in the case of Casino Rama, the revenues are placed into a fund to benefit all the First Nations’ peoples of the province. The operators also take a 5 percent share of the gaming win. From the remaining 75% of the gaming revenues, all expenses are deducted. The residual net profits go to the province.
The Ontario Lottery Corporation also permitted charity casinos in the early 1990s. The casino nights featured table gaming only. These had to be “roving” casinos because no more than one night of gaming could be in one location per month. The “roving” games were operated by management companies, and many problems surfaced. For instance, with all the moving, equipment broke down frequently, and also there could be no permanent security systems installed to ensure that all gaming was honest and that all funds went where they were supposed to go. So in 1997, the government announced that it would create forty-four charity gaming sites in the province. How funds would be distributed was not clearly addressed, although most of the funds would go to the Ontario Lottery Corporation. (This presented a legal challenge, as the charity gaming laws require that most of the net revenues must go to the charity). The casinos would each be allowed forty tables and 150 machines. Most of the communities selected for the casino sites expressed displeasure with the idea, as citizens propelled round after round of protest at the government. In 1998 the province backed down and decreed that there would only be four “pilot” charity casinos, to be located in Thunder Bay, Sault Ste. Marie, Point Edward (adjacent to Sarnia), and Brantford. These cities were the only ones that had voted in favor of having charity casinos. Sault Ste. Marie and Point Edward were especially desirable sites as they bordered Michigan cities. One of these cities, Sault St. Marie, Michigan, boasted a very large Native American casino (the Kewadin Chippewa casino) that had been drawing most of its revenue from Canadians. Only Brantford did not have direct highway access to the United States and to potential American customers. Additional charity casinos were permitted for First Nations’ reserve lands. One is in operation near Port Erie. The four pilot casinos were allotted 450 gaming machines and eighty tables for players. All are now in operation and drawing good business from players.
The Ontario Lottery Corporation was also dissuaded from another plan owing to the protests of the citizens. The government announced that it would authorize 20,000 video machines for bars, taverns, and racetracks in the province. In 1998 the corporation abandoned the overall plan but instead finalized plans to place up to 20,000 machines in eighteen provincial racetracks, with as many as 2,000 at a single track. The operation of the machine gaming began in 1999 with 800 machines being installed at Windsor Raceway. Other tracks now have machines.

Pari-mutuel wagering was authorized by a 58 percent vote of the Oklahoma citizens in 1982. One major thoroughbred track was established, but it ceased operations for financial reasons. Several quarterhorse tracks continue to operate.
The state has no lottery; however, charity bingo games are permitted. Several Native American tribes have sought compacts so that they could offer full casino gambling, but the state has refused to negotiate. The tribes have compacts for offtrack betting facilities. Also, Oklahoma tribes pioneered the establishment of a multistate, multitribal satellite bingo gambling operation that has offered prizes up to a million dollars.

In 1973 Ohioans voted for legalized lottery gambling with a 64 percent majority vote. The active games generate over $2 billion in sales. Net revenues are dedicated to educational programs. Since the 1930s most forms of horseracing (thoroughbred, harness, and quarter horse) have had pari-mutuel betting. Telephone wagering and intertrack simulcast race wagering are permitted and are operational; offtrack betting has been approved. Ohio also has a very active charitable gaming operation with both bingo games and Las Vegas nights.
Ohio citizens have been a strong market for many gambling operations over history. The Ohio River attracted riverboat gamblers during the nineteenth century, and illegal numbers games and sports betting flourished during the twentieth century. Ohio residents have been the primary player base for illegal casinos in Steubenville and also for northern Kentucky locations such as Newport and Covington. The Mayfield Road Gang ran illegal liquor operations during Prohibition and also established gaming outlets for the Cleveland and Toledo populations. Gang leader Moe Dalitz eventually became one of the founding fathers of the Las Vegas Strip, as he became an owner of the Desert Inn and Stardust in the 1950s.
In the 1990s Ohio became surrounded by new gaming facilities in nearby states and in Canada. Indiana had riverboat casinos just outside of Cincinnati, Casino Windsor and the new Detroit casinos were but an hour’s drive from Toledo, Casino Niagara was within a day’s trip of Cleveland, and West Virginia racetracks had machine gaming within miles of the Ohio border. Ohio also furnished hundreds of thousands of gamblers for Las Vegas and Atlantic City casinos each year.
The encroaching competition for Ohio gaming dollars generated two concerted campaigns for casinos in the Buckeye State during the 1990s. Both campaigns were led by the Spitzer family, who owned a shipyard in Lorain, just twenty miles outside of Cleveland on the shores of Lake Erie. In 1990 they sponsored a petition drive and statewide election to place a casino boat on their lands. They called the casino a pilot project, suggesting that five years later casinos could be placed in other locations. In the 1990 election, 58 percent of the voters rejected the proposals. In 1996 the Spitzers sponsored a petition drive for five casinos, with two on Lake Erie and three on the Ohio River. That year nearly 52% of the Michigan voters said yes to Detroit casinos, but in Ohio 62% of the voters rejected casinos. As more casinos come to rely on Ohio for gambling patrons in the twenty-first century, Ohio interests will no doubt continue to push plans to legalize casinos within their own borders.

See Lotteries.