Gambling in American History

Argentina has all major forms of gambling: casinos, slot machine parlors, lotteries, bingo halls, racetracks, and a variety of lotteries. The 34 million citizens occupy a land base about one-third the size of the United States. The country is divided into twenty-eight provinces, plus the national district of Buenos Aires City. Both the provinces and the national government have authorized lotteries, casinos, and other forms of gambling. Until the 1990s, the government operated almost all of the gambling; since then a privatization drive has brought many new casino organizations to the country, upgrading that form of gambling. Until very recently, no casino gambling was allowed in the national city of Buenos Aires; however, a dockside ship now offers over 300 slot machines and nearly fifty tables for gamers.
Casino gaming has been common in Argentina, starting in colonial days of the eighteenth and early nineteenth centuries when viceroys from Spain governed the land. At that time and even after national independence in 1810, casinos were privately owned and locally licensed. This structure of minimal regulation and local control changed drastically in the mid-twentieth century.
As in most Latin American politics, a chief executive and his appointed council, as opposed to a broad representative legislative chamber, control
government. This pattern of executive rule derives from colonial traditions and cultural expectations. Military governments also have been common in the region. Argentina’s governmental structures fit these patterns. In 1943, General Edelmiro Farrell assumed the role of “keeper of the national conscience” after deposing the civilian government. His selected council included General Juan Peron, who was the minister of war, the vice president, and the secretary of labor.  General Peron succeeded to the presidency as the head of the new Argentine Labor party in 1946. His election resulted from widespread support from the working classes and the Catholic Church. He remained the leader and virtual dictator until other military officers deposed him in 1955. Many changes occurred under the leadership of Farrell and Peron, including the structure of casino operations. Peron advanced industrialization programs requiring increased national control at the expense of provincial powers. He also fostered public ownership of enterprise.

A view of Mar Del Plata, the largest casino in South America, located 200 miles south of Buenos Aires.

In 1944, a presidential decree closed all private casinos in Argentina. The national government controlled all casinos from then on. One consequence of this action, remaining to this day, was the closure of casinos in the national capital city of Buenos Aires and its suburbs. This decision influenced the development of South American gaming. Casinos in Argentina, Uruguay, Chile, Ecuador, Colombia, and Surinam now market their properties to wealthy Buenos Aires players. The other major target area is Brazil, which also lacks legal casinos.
The National Lottery Administration (La Lotteria de Beneficial) has operated a national drawing since 1893. It now oversees the publicly owned casinos for the national government. In 1947 the administration created a casino commission to direct operations. The commission consists of representatives of the Ministries of Finance and Labor and the National Bank.
The first casinos authorized to be part of this organization opened in the beach resorts in the province of Buenos Aires, about 200 miles from the capital city. Casinos operating as private casinos in Mar del Plata, Necochea, and Miromar (December 1944) continued as national government casinos. In 1945, the government nationalized the casino at Termas de Rio Hondo, a hot springs resort in the province of Santiago del Estero. A decree in 1946 reiterated that all casinos were under the jurisdiction of the national government but recognized that provinces could prohibit gaming within their borders.
Despite a decree in 1947 that placed the National Lottery Administration under the minister of the interior, two years later the minister of finance assumed the responsibility. Casino revenues were to be spent on social work, health, and urban sanitation programs. Later additions to the list of gaming recipients were schools, universities, local governments, tourism programs, medical foundations, and the Eva Peron Foundation. The government set admission charges for players and fees for exchanging checks and purchasing chips. In 1951, the government assessed a fee of 0.5 percent of the drop but later eliminated it.

The international hotel overlooking the Iguasu Falls on the Argentina-Brazil border.

The national casino system expanded by nationalization of a private casino in Mendoza in 1947 and the creation of a casino annex at Mar del Plata in 1949.  In 1954, casinos opened at the snow skiing and lakes resort of Bariloche in Rio Negro Province and at Termas de Reyes in Jujuy Province. Another casino opened at Termas de Rosario de la Frontera in Salta Province in 1959.
In 1963, a national casino opened at the edge of the great Iguazu Falls in Misiones Province. Casinos came to Alta Gracia and La Cumbre in Cordoba Province in 1971. The provinces of Corrientes and Chaco and the city of Parana in Entre Rios Province received authorizations for casinos in 1972. In the same year, a new national casino opened in the seaside resort of Piromar in Buenos Aires Province. Later in the decade, the remote coastal cities of Rivadavia and Puerto Madryn in Chubut Province and the interior city of Tandil in Buenos Aires Province established casinos. A seasonal casino in the oceanside resort of Las Grutas in Rio Negro Province also began operations.
After the fall of the final Peron government in the mid-1950s, the interior provinces tried to reassert autonomy over many public policy areas previously dominated by Peron officials. Several provinces wanted their casinos back.
In 1960, the national casino at Mendoza closed, and the provincial government assumed control of gaming. In 1961, the casino at Termas de Rio Honda was transferred to the provincial government of Santiago del Estero. In 1962, a presidential decree authorized provincial participation in all revenues from the national casinos. Subsequently, the provinces acquired the casinos in Salta and Jujuy. These and other provincial governments started province-operated casinos. The interior provinces of San Luis, San Juan, La Rioja, Tucuman, Santa Fe, Misiones, and Corrientes now have such casinos.
A movement toward privatization on a national level began in the mid-1980s. The public treasuries of the nation faced trouble from Argentina’s continuing economic crisis. The incentives for generating revenues by sales of casino properties were present.
The central government negotiated with the province of Rio Negro to transfer the national casino at Bariloche. In the early 1980s, the government of Mendoza Province had been anxious for resort developments. Ernesto Lowenstein saw the possibility of developing a world-class ski resort at Las Lenas on the edge of the Andes. In exchange for taking a risk with his development, he asked for a casino concession. The province was happy to comply with his desires. The resort opened in 1985, and two years later, a casino began operations. The Lowenstein Resort Company owns the casino, which Casinos Austria operates under a management contract. In 1989, the provincial government granted a second private casino concession to the developers of the new Ora Verde Hotel in Mendoza City. These two private casinos, the first in over forty years in Argentina, were the impetus for the privatization of the existing government casinos at both the national and provincial levels.  Other new private casinos were also authorized, and the Mirage organization of Las Vegas was instrumental in starting a major facility at Iguasu Falls at the Brazilian border.
The National Lottery Administration also controls and administers other gaming. A major track near Buenos Aires offers horse racing. Three tracks along with fifty offtrack betting facilities had a total handle of around $300 million a year in 1997, the most recent year for which information is available. Another form of legal gaming is parlay betting on soccer games. The administration also offers various lottery products. Additionally, the provincial governments run lottery operations.

Antigua and Barbuda, in the Leeward Islands of the West Indies, constitute an island nation that was formerly under the control of Great Britain. The government allows casino gambling, bingo halls, horse-race betting, a lottery, offtrack betting, and sports betting on the Internet. There are five casinos in the capital city of St. John’s and one in the city of Deep Bay. The minister of finance licenses all the casinos. A license may be given to any person who owns a hotel that markets rooms to tourists.
The Antiguan government encourages casino development and is willing to offer new licenses to those wishing to start casinos. Larger hotels pay an annual licensing fee of $300,000; smaller hotels pay $100,000. Additionally they pay a tax of 15 percent of their gaming revenue. Although local residents may come to the casinos, the casinos are prohibited from advertising gaming to the local public.
In 1985, one of the largest properties, the Halcyon Cove, instituted a small gambling junket program in which tourists fly in from cities in the United States on inclusive tours. Because checking credit players incurs an element of risk, the Halcyon Cove does not subscribe to a credit check service based in the United States (unlike other junket destinations in the Caribbean). Therefore, to ensure against potential problems, the hotel has received written guarantees from junket organizers, who cover debts owed by the players they bring to the casino.
In operating the casinos on Antigua, the gaming management must realize that vacationers do not travel to the island in order to gamble. They come to relax, rest, and enjoy the weather and scenery. Gambling is only one amenity to fulfill the entertainment needs of the guests. It is not a major profit center for the management or government.

Alberta can lay claim to having the first legalized casino gaming in Canada, albeit in a temporary form. In 1967 the provincial government initiated several laws that seemed to open the door to casino games even though they were forbidden by the Penal Code. In the summer, during the Edmonton Exhibition, the Silver Slipper Saloon was opened as part of the two-week celebration. The general manager of the exhibition later indicated that he had taken payoffs from the carnival company that ran the games, that is, the Silver Slipper. Amendments to the national code in 1969 helped regulate Alberta gaming. The attorney general took control over licensing charitable bingo games and raffles. In 1975, the attorney general’s office opened the door to casinos once again as it first approved a casino for a charity event supporting a summer camp. A license was then given for a casino at the Calgary Stampede. A flood of applications for casino events overwhelmed the attorney general, and he quickly created a special Gaming Control Section to regulate the gaming. Rules were set into place over the next two years. In 1981, a new Alberta gaming commission took over all licensing powers.
As gaming developed, Alberta adopted the model used in British Columbia. Charities could have casino events, but they had to be held in permanent facilities that were operated by private parties. In the 1990s, the number of such facilities grew to nearly a score. There are five casinos in Edmonton; four in Calgary, and others spread around the province. Until 1998 they were not allowed to have slot machine gaming, and the charities paid a fixed fee for having an event. When the government installed machines, a new revenue division based upon play was instituted. As the government owns the machines, it keeps a majority of machine revenues. Although no serious consideration is being given to the creation of large commercial casinos, proposals have been made for wide-open, large-scale casino gaming on the First Nations reserve lands.
Alberta has many other types of gambling, including all forms of pari-mutuel operations, both on-track and offtrack. Raffles and pull tabs are sold by charities. The most prevalent form of gambling, however, is found in the bars and taverns of the province. By 1999 more than 6,000 video lottery terminals were operating in 1,200 locations, producing about $300 million in revenue, which is about 70 percent of the gaming revenue produced in the province. In that year the popular machines (which provide an average gaming revenue of $50,000 a year) accounted for a per capita gaming participation of about $1,300 per adult, the largest in Canada and North America, with the exception of Nevada. Studies have also revealed that Albertans have the highest rate of problem gambling in Canada. Efforts to ban the terminals have been concerted, with local elections called in 1998 in most of the cities. Only in a few smaller cities did the voters choose to ban the machines.

Native Alaskans and Native Americans in Alaska conduct bingo operations. There are also many bingo games sponsored by charitable organizations. Much of the revenue for the games’ sponsors comes from the sale of pull-tab tickets. Alaska permits many raffle-type games for a variety of nonprofit interests. One of the most interesting games allows people to pick the time for the first breakup of ice floes in the spring each year.  In recent years there has been interest in developing some casino gambling. The proposals for increased gambling have not found support in the legislature, however, or among the general population. In 1990, a ballot initiative to permit limited stakes casino games in bars and taverns was soundly defeated by a 60 percent to 40 percent margin.

Even though Mobile, the first city of Alabama, has had a rich history of pirates, houses of ill repute, Mardi Gras celebrations, and gambling dens of inequity, most sinful activities in the state have been effectively suppressed in modern times. One major exception was the illegal enterprises of Phoenix City, which during and after World War II catered to a clientele made up mostly of soldiers from nearby Fort Benning. A major cleanup was instituted in the 1950s by state attorney general John Patterson. Patterson was propelled into the crackdown activity after his father, a candidate for attorney general at the time, was murdered by local mobsters who were running the town. In 1954 John Patterson was elected in place of his father.
Gambling activity resurfaced in the 1980s; however, it now operated on a legal basis—for the most part. Charitable games were permitted under the control of local governments, and the state also authorized the establishment of dog- and horse-race betting. The largest track in the state opened near Birmingham, and it pioneered an unusual event. The track featured both dog and horse racing on the same day and on the same card. The experiment with racing was not overly successful, as it was initiated just a few years before the state of Mississippi authorized commercial casino gambling as well as Native American casino gambling. Several of these facilities were near the Alabama border. Also, two other states bordering Alabama—Florida and Georgia—started very active lottery games that drew players from Alabama. The Alabama Porch Creek tribe of Native Americans led by Eddie Tullis reacted to the new gambling ventures by creating two large bingo halls and by seeking a compact for casino games. State officials refused to negotiate a casino compact, but the tribe began using gambling machines anyway.
As the twentieth century ended, the legislature gave serious consideration to legalizing new forms of gambling, including table games, and machine gambling for racetracks. There are now four dog tracks in existence, as Birmingham closed its horse-race activities. The legislature was able to authorize a public vote on the question of having a state lottery. In 1998, the governor was elected on a platform that included the lottery proposal. In October 1999, however, the voters of the state shocked not only Alabama but also the whole nation when they said no to the lottery by a vote of 54.3 percent to 45.7 percent. The lottery proposal was designed to duplicate the Georgia experience in that it designated revenues for a plan of free college scholarships for Alabama high school graduates with good records. With the negative vote, Alabama became only the second state (the other being North Dakota) to receive a negative vote on a state-operated lottery proposal.

Africa, the world’s largest continent, with 20 percent of the land mass of the world, includes more than fifty nation states. Almost all permit some gambling activities, lotteries, and racing, and about half allow casino gambling. Casinos in the various regions of Africa differ considerably. In the northern African Muslim countries there are limited numbers of casinos: two in Morocco, one in Tunisia, and fourteen in Egypt. Local residents of Egypt may not enter the country’s casinos, as they are specifically designed to attract foreign currency from tourists and foreign businessmen. The casinos are in major hotels; they require identification for entrance and impose dress codes. Egypt is one of the few African jurisdictions where casinos are lucrative investments.
The other area of Africa where casino gambling is attracting considerable interest is South Africa. Prior to the establishment of full democracy, the government of the Union of South Africa had a firm ban on casino gambling. That all changed in 1993 and 1994. A newly elected congress passed an act establishing lotteries and gambling. In 1996, a National Gambling Act was passed. The act created a board that was empowered to draw up rules for the creation of forty new casinos. Licensing began in 1999. Prior to the new eras of multiracial democracy, casinos had been permitted in the segregated areas known as “homelands.” The Sun City casino organization had been instrumental in establishing several casinos in the four areas that have now been integrated into South Africa under the new constitution.
East Africa has casinos that also seek to market to tourists. For instance, in Zambia there are seven casinos, with two at Victoria Falls. The other casinos are in international hotels. Kenya has twelve casinos in the capital city area of Nairobi and another nine in the coastal resort of Mombasa, all of which are quite small. There are also casinos on the tourist islands of Seychelles, Reunion, Madagascar, and Mauritius, as well as in Ethiopia, Djibouti, and Uganda. Without tourism, the casinos could not be profitable, as local populations are extremely poor.
Such is also the case with the properties in West Africa, which are found in countries such as Benin, Cameroon, Congo, Gabon, Gambia, Ghana, Liberia, Niger, and Nigeria. Senegal, Zaire, Togo, Senegal, and Sierra Leone have also had casinos, although one has to wonder how gambling activities can proceed within the atmosphere of national, political, and economic disintegration that is all too often present in some of these countries.
Casinos in very poor countries have trouble developing markets. Their ability to recruit casino staff is limited by workforce deficiencies, coupled with national rules demanding that locals be hired. These would often be locals with political connections that precluded their being properly trained or supervised and making it unthinkable that they could be disciplined if they violated the trust that must go with casino jobs. Where there are workforces in place, casino operators find that it is necessary to pay workers every day, as they might not return to work for several weeks if they received a large labor payment. A shocking sight witnessed by more than one European casino owner has been a group of local residents coming to a casino and pooling their wealth so that they could make a single pull on a slot machine handle. In Togo, the national government was so poor that it could not provide sufficient coinage to use in the operation of the slot machines. Most of the African countries between the northern Muslim region and the new South Africa state are in desperate need of economic development, but casino gambling is simply not the tool they need to establish economies that can participate in the global economy.

During the 1990s, Sheldon Adelson became one of the leading entrepreneurs in the gambling industry as the primary developer and owner of the Venetian Casino resort on the Las Vegas Strip.
Adelson was born in 1933 in Boston, the son of a cab driver. He worked hard and studied hard as a youth. He received a bachelor’s degree in real estate and corporate finance from the City University of New York. After a period of service in the United States Army, Adelson set upon a plan to make himself fabulously rich. He succeeded more than one time.  As a venture capitalist in the 1960s, he acquired scores of companies, only to see his budding financial empire fall as the stock market took a plunge in 1969. He came back by developing a series of trade shows, the most important of which was COMDEX, the leading computer dealers’ exposition, and by the 1980s, the leading annual convention in Las Vegas each year. The success of the show led to other ventures such as developing airlines. That success also focused his attention upon Las Vegas. The convention was a gold mine for Adelson, but even Las Vegas did not have enough convention space. He privately built a facility next to the Las Vegas Convention Center and gave it to the county, realizing that his revenues from his big show would cover his capital costs in a few years. But he wanted more – his own convention center.

The Venetian Casino owned by Sheldon Adelson is the first two-billion-dollar casino property anywhere.
In the late 1980s, Sheldon Adelson was able to finance the purchase of the Sands Casino Hotel from its owner, Kirk Kerkorian. In 1989, it was licensed by the Nevada Gaming Commission, and Adelson became a casino magnate. Actually he was just holding on to the property waiting for something bigger. In 1993, he built the Sands Exposition Center, a one-million-square-foot convention facility on the Sands property. But he was still waiting for something bigger. His chance to “do something” with the Sands came in 1995 when he was able to sell the COMDEX show and sixteen other trade shows for $860 million. The next year he imploded (blew up) the Sands, and he devoted his new resources to the construction of the Venetian Hotel. The Venetian opened in April 1999 with a 113,000-square-foot casino, a shopping mall set alongside canals with gondolas, and 500,000 feet of new convention space. The hotel’s thirty-three-story tower and 3,000 rooms featured luxuries not found elsewhere. The basic room was over 700 square feet, making it the largest standard room for a hotel anywhere. The total square footage of the rooms actually exceeded that of the MGM Grand, with its 5,009 rooms. The facility had a first-phase price tag of $1.5 billion “plus.” The “plus” was the result of the fact that others paid the price. Adelson leased all the space for shops and restaurants, keeping only the casino, hotel, and meeting areas under his financial control. As the new century began, the revenues for the casino were meeting all expectations and then some, and Adelson was planning a phase-two construction of a museum and a new casino and hotel tower with 3,036 rooms adjacent to the Venetian.