Gambling in American History

Three times one man built the largest hotel in the world.  First it was the 1,512-room International Hotel on Paradise Road in Las Vegas in 1969. This is now the Las Vegas Hilton. Next it was the 2,084-room MGM Grand on Flamingo Road at the Las Vegas Strip in 1973. This is now Bally’s, which is also part of the Hilton Casino Group – also known as Park Place Casinos. Then in 1993 it was the second Las Vegas MGM Grand Hotel and casino – with theme park. This facility at Tropicana and the Strip, with 5,009 rooms, was the first billion-dollar casino project in Las Vegas. These projects alone would merit the mention of that man – Kirk Kerkorian – in any encyclopedia of gambling or gamblers, but his story is more interesting than simply being a builder. Parts of his story make him sound like Howard Hughes, part like Steve Wynn, but he was really neither. He is unique in the annals of casino personalities.
Kirk Kerkorian was born in Fresno, California, on 6 June 1917. His family moved to Los Angeles, where he had to contribute to their finances by selling newspapers at the age of nine and performing whatever other work he could find. He had spoken only the Armenian language of his forefathers until he reached the streets of Los Angeles. Los Angeles taught him that life was to be a struggle, and he willing jumped into the flow of the activity. He drove trucks to carry produce from the San Joaquin Valley, he worked with logging operations in Sequoia National Park, and he was an amateur boxer who won twenty-nine of his thirty-three fights.
In 1939 he fell in love with flying, and within two years he had a commercial pilot’s license. He soon became a flight instructor, and then at the first chance he joined the British Royal Air Force. He ferried bombers from Canada to England in one very dangerous mission after another. In one flight he set a speed record for his aircraft. After the war, his interest remained in the air. In 1945 he visited Las Vegas, bought a single-engine Cessna, and went into the charter business. He would fly into Las Vegas almost daily. In 1947 he purchased the Los Angeles Air Service. Soon he went into the business of refurbishing planes and reselling them. He renamed his company Trans International Airlines and went into the passenger service business in 1959.  His business continued to expand, and he would spend much of his free time in Las Vegas at the casinos.
Kerkorian always kept his eyes open for deals. In 1962 he was able to purchase the eighty acres across from the Flamingo on the Las Vegas Strip. By consolidating other pieces of land, he was able to create the parcel of property that Jay Sarno purchased in order to build Caesars Palace. Kerkorian also bought eighty-two acres of land on Paradise Road in 1967. The same year he was able to purchase the Flamingo Hotel for $12.5 million. In 1968 he sold Trans International Airlines for $104 million. He had the resources for his first major project, the International. He invested $16.6 million of his own money in the $80 million facility. He took the properties public in 1969 when the International opened, featuring performers such as Barbra Streisand, Ike and Tina Turner, and Elvis Presley. Yet the Securities and Exchange Commission did not allow him to sell sufficient shares of stock to pay off debts on this and other projects in which he was involved. He felt that he had to sell the Flamingo and International in order to satisfy his business obligations. Hilton took over the two hotel casinos in 1970 and 1971, but Kerkorian was not out of town for long.
He started out by buying a controlling interest in Western Airlines, and he began buying stock in a failing movie company called MGM Grand. He pushed the company toward diversifying into resort hotels. Their first project was the MGM Grand Hotel Casino in Las Vegas, named after the 1932 film Grand Hotel. The hotel opened on 5 July 1973, with a 1,200-seat showroom, a shopping arcade, a movie theater featuring classic MGM films, and a jai alai fronton. In 1976, Kerkorian sold a large block of Western Airlines stock and began a new hotel-casino in Reno. In 1978 the $131 million MGM Grand–Reno opened with the largest casino floor in the world and a 2,000-room tower – making it Reno’s largest hotel.
Disaster struck the MGM Grand in Las Vegas on 20 November 1980. A fire that started in an electrical panel in a kitchen quickly shot through the casino area, killing a score of players and employees. When the fire reached the hotel lobby area it was knocked down by the sprinkler system. A massive smoke cloud was able to rise up stairwell and elevator shafts, however, before it was trapped on the upper floors. There the smoke penetrated guest rooms, killing dozens more. In all, eighty-seven persons perished. Although the tragedy was devastating, Kerkorian quickly decided he would rebuild. By the end of 1981, the MGM was operating at full force. In 1986, however, Kerkorian walked away from his two properties, the Las Vegas MGM and the Reno MGM, selling them to Bally’s for $594 million. Subsequently Bally’s Reno was sold to Hilton, and in turn Hilton bought all of Bally’s, so both properties – like the International before – have become part of Park Place Gaming.
Kirk Kerkorian could not stay away from Las Vegas gambling for long.  Once again, he began to plan. One plan to take control of Chrysler Corporation fell short of its goal, although Kerkorian became the largest stockholder in the automotive giant. His other plan led to the creation of the largest hotel and casino floor (at the time) in the world. His 5,009-room colossus, also called MGM Grand (he had held on to the right to the name), featured a 330-acre theme park, a health club, eight restaurants, and a 15,000-seat arena where boxer Mike Tyson has performed on many occasions (some notable, some infamous). Barbra Streisand came out of a twenty-year moratorium on personal concerts to perform there as well for the grand opening in 1993.
When Kerkorian opened the International, he included a youth hostel in the facility. Later the Hilton had a youth recreation area in the facility. His 1993 MGM Grand was heralded as a casino for families with children. It had a Dorothy and the Wizard of Oz theme with an Emerald City and a Yellow Brick Road. The word went out that Las Vegas was a place to bring children. Within a very short time, Kerkorian and the MGM management realized that children want two things from their parents—time and money. Both ways the casino loses. Kerkorian has backed off the “family” theme, and so has Las Vegas. The theme park at the MGM Grand has been consistently downsized, and plans have been made for expanding convention space and also for developing more rooms for prosperous gambling patrons. Kerkorian, in the meantime, keeps moving forward, always seeking new business deals. In 2000 he failed in an effort to take over Chrysler Motors, but he did succeed in a takeover of Steve Wynn’s Mirage Resorts. <

Kentucky is the home of horse racing. More racehorses are born and bred in Kentucky than in any other state. The Kentucky Derby is the most famous horse race in The United States. In 1988, 61 percent of the Kentucky voters said they wanted a lottery, and the next year one was established that offers instant games, lotto games, and numbers games as well as Powerball interstate lottery tickets. Charitable games are also permitted.
The fact that many states bordering or near Kentucky – Indiana, Illinois, Missouri, Mississippi – offer casino gambling pressured state leaders into making plans for casino gambling. In 1999, the governor recommended that as many as fourteen casinos be authorized for the state. The notion of casinos in Kentucky is not too far out of bounds for most residents, as Kentuckians remember that the middle decades of the twentieth century found many wide-open but illegal casinos operating along the Ohio border. The seven tracks of Kentucky are supporters of the idea of having casinos, as long as they are located at the tracks and operated by the tracks. The idea of casinos has not received much support in the state legislature, however. <

Keno is a game that enjoyed great popularity in Nevada casinos in the mid-twentieth century. Its use is now waning, as serious players realize that it does not offer a good expected return. Casinos also realize that it requires much labor and also considerable security to ensure that all play is honest. The game that is now played can be traced back to Chinese games two millennia ago. The Chinese used boards with ninety (or more) characters. They brought the game to the United States as they emigrated to the West Coast for jobs on the railroads and in the mines.
Americans modified the game so that numbers replaced characters. When casinos reopened in Nevada in the 1930s, an 80-number game became standard, and it is still in use. The player is given a sheet of paper with ten columns and eight rows of numbers. He or she may bet on from 1 to 15 numbers. Numbered balls (or a computer number generator) are then retrieved from a randomizer, and 20 numbers are called. Hence, for a one-number pick, there is a one in four chance to have it called. The payoff is even money. In addition to picking one set of numbers (up to 15 of them), the player may use his card for making several combination bets. After marking the card, the player gives it to a casino official (or keno runner) who verifies it and gives him a receipt.
The convenient feature of keno in a casino is that players can wager and play the game while dining, watching entertainers, or playing other games. The winning numbers are posted on boards throughout the casino facility. Games are separated by fifteen or twenty minutes, and winners usually have several hours to turn in cards for payoffs. The house edge is determined by payoff schedules. Typical Nevada payoffs to players range from about 75 percent to about 65 percent (a house edge of 35 percent) depending upon how many numbers are bet. When more than three numbers are bet, there are prizes for having some of the numbers (but not all) called.
Although the game is considered by most experts to be a “sucker’s bet”, many persons like the fantasy of being able to play a one-dollar game and win $25,000 or $50,000 for hitting fourteen of fifteen numbers. The casino, however, guards itself from extraordinary risks by limiting all prizes on a game to an arbitrary figure, such as $50,000. If there are multiple big winners on the game, they have to divide the prize. <

Robert F. Kennedy was a U.S. senator and attorney general. Robert Francis Kennedy, known as Bobby, was born on 20 November 1925 in Massachusetts. He was the son of Ambassador Joseph Kennedy and the brother of Pres. John F. Kennedy and U.S. Senator Edward Kennedy. Robert Kennedy graduated from Harvard University with a B.A. in 1948 and received his legal education at the University of Virginia, earning an LL. B. degree in 1951. After graduation he worked briefly in the U.S. Department of Justice before becoming a counsel in 1953 with a Senate committee investigating internal security, chaired by Sen. Joseph McCarthy (R-Wisconsin).
After the Democratic party secured the Senate majority in 1955, Kennedy became chief counsel of the Investigations Committee under the chairmanship of Sen. John McClellan (D-Arkansas). In 1957, the committee became known as the Rackets Committee as it focused its attention on organized crime and illegal activity in labor unions. The first target of the investigations was the International Brotherhood of Teamsters (often referred to as the Teamsters’ union). Union president Dave Beck was implicated in personal corruption; he was subsequently tried, convicted, removed from office, and imprisoned. Then Kennedy went after Beck’s replacement, James Riddle Hoffa. Kennedy was able to demonstrate Hoffa’s interactions with organized crime figures and illicit gambling activity. Kennedy’s work with the committee led eventually to the 1959 passage of the Landrum-Griffin Act, which regulated financial activities of labor unions. The committee action also established Robert Kennedy’s reputation as a fighter against organized crime. That reputation was enhanced when he authored the best-selling book The Enemy Within (Kennedy 1960).
In 1960 Kennedy demonstrated his political expertise as he managed John F. Kennedy’s successful campaign for the presidency of the United States. Bobby Kennedy’s reward was his appointment to the office of attorney general in January 1961. He held the office until September 1964. He concentrated the energies of his office and his Department of Justice on civil rights issues and on organized crime. He continued his quest to bring down James Hoffa; however, he was frustrated in these endeavors. It was left to his successors to finally guide the prosecutions that resulted in the imprisonment of Hoffa.
Attorney General Kennedy established an organized crime task force, and he pursued his objectives with prosecutions as well as with an agenda of new legislation. Three major bills dealing with illegal gambling were passed into law as a result of his efforts. These included the Federal Wire Act of 1961, the Travel Act of 1961, and the 1962 amendments to the Johnson Act (Gambling Devices Act), which expanded the prohibition of transportation of slot machines across state lines to include all gambling equipment. Congress also passed the Racketeer Influenced Corrupt Organizations Act (RICO) in 1961.
Kennedy maintained his steady attacks on organized crime until late 1963 when his brother, Pres. John Kennedy, was assassinated. There has been more than one set of rumors suggesting an organized crime connection to the assassination. One account (Davis 1988) suggests that organized crime had been quite influential in the president’s election and that crime figures maintained close relationships with the president and his father (who had been involved in bootlegging businesses decades before). Some feel that the attorney general’s vigorous attacks on Mob activity somehow represented a double cross by the president.
After John Kennedy’s assassination, Robert Kennedy turned his energies toward passage of civil rights legislation. In 1964 he resigned the office of attorney general in order to successfully run for a U.S. Senate seat from New York State. In 1968, while he was running for the presidency, Robert F. Kennedy was assassinated in Los Angeles. <

The Kefauver Committee is the popular name of the U.S. Senate Special Committee to Investigate Organized Crime in Interstate Commerce.  The committee, which met in 1950 and 1951, was the first federal entity to make a comprehensive study of organized criminal activity in the United States. The investigations concentrated much attention upon gambling. The idea of a Senate investigating committee came from Estes Kefauver, a first-term senator from Tennessee. Kefauver’s initiative came as a reaction to reports of several state and local crime commissions that had met in the postwar years. These local investigatory efforts had found that criminal organizations experienced great growth during the World War II years. They had moved from their Prohibition-era bootlegging activities to gambling, narcotics, and prostitution activities. They did so at a time when the nation’s collective attention was focused upon world events.
The crime commissions’ reports were accompanied by a widely reported series of sensational newspaper investigations and stories. It seemed to Kefauver that the national public was making a call for action. The ambitious senator had served as a member of the U.S. House of Representatives for five terms before winning election to the Senate in 1948. His election resulted from a bitter fight against a corrupt political machine that had dominated Tennessee politics for decades.
During 1949, Kefauver developed the idea that the federal government should follow the lead of the local commissions and have its own study of crime. On 5 January 1950, he introduced Senate Resolution 202 in order to create a new subcommittee of the Judiciary Committee on which he served. After jurisdictional objections from the leader of the Commerce Committee, the resolution was amended, and an independent special investigating committee was approved on 3 May 1950. Five senators were selected to be members by Vice President Alben Barkley (president of the Senate). The members included Democrats Kefauver, Herbert O’Conor (Maryland), and Lester Hunt (Wyoming) and Republicans Alexander Wiley (Wisconsin) and Charles Tobey (New Hampshire).
The committee gained widespread national attention for its televised hearings. Kefauver achieved celebrity status and soon afterwards launched a presidential campaign. He failed in attempts to get the presidential nomination of the Democratic party in 1952, but in 1956 he was nominated for the vice presidency on the unsuccessful ticket with presidential candidate Adlai Stevenson.
The committee held its hearings in a Senate office building in Washington, D.C., and in thirteen other cities, including Las Vegas, Miami, New York City, New Orleans, Kansas City, Detroit, and Los Angeles. Over 600 witnesses testified. These included federal, state, and local officials as well as many persons who participated in gambling enterprises both legal and illegal. Among these were members of the Desert Inn Group of Las Vegas, including Moe Dalitz and Wilbur Clark. Several thousands of pages of testimony were recorded.
The committee issued its report on 17 April 1951.  The committee concluded that “organized criminal gangs operating in interstate commerce are firmly entrenched in our large cities in the operation of many different gambling enterprises… as well as other rackets…”. The committee found that there was a “sinister criminal organization known as the Mafia” that was operating throughout the country. Gambling profits were considered the “principal support” for the criminal gangs. The committee strongly opposed legalization of gambling, as they found that the “caliber of men who dominate the business of gambling in the state of Nevada is on par” with those operating illegal establishments. The committee members concluded that “as a case history of legalized gambling, Nevada speaks eloquently in the negative” (94). The committee wrote: “It seems clear to the committee that too many of the men running gambling operations in Nevada are either members of existing out-of-state gambling syndicates or have had histories of close association with the underworld characters who operate those syndicates”. They criticized Nevada’s licensing system for not resulting in the exclusion of undesirables but rather seeming only to give the individuals a “cloak of respectability”.
The committee’s report included twenty-two recommendations for federal government action and seven for state and local governments. The federal recommendations included (1) the creation of a racket squad in the Justice Department; (2) the establishment of a Federal Crime Commission in the executive branch; (3) a continuing study by the committee of interstate criminal organizations and support of social studies related to crime; and (4) new legislative initiatives, to be suggested by the committee. The committee also applauded the establishment of a special fraud squad in the Bureau of Internal Revenue (now the Internal Revenue Service) to deal with taxation of illegal gamblers and other gangsters. It was recommended that casinos be required to keep daily records of wins and losses of gamblers and provide the records to the bureau. Officials of the bureau should have access to casino records at all times. The transmission of wagers and of betting information interstate by means of telephone, telegraph, or radio and television should be prohibited.
While the committee was meeting, the Johnson Act was passed. It prohibited the transportation of slot machines across state lines for illegal uses. The committee recommended that the prohibition be extended to other gambling devices such as roulette wheels and punchboards. Congress also increased the federal slot machine licensing tax to $250 for each machine. The tax had been established in 1941 and levied at an annual rate of $150.
State and local governments were urged to appoint committees to study the problem of organized crime in their jurisdictions, with special grand juries having extensive powers appointed in communities with wide-open illegal gambling. Greater cooperation among police agencies was suggested. Each jurisdiction was also asked to consider depriving businesses of licenses if illegal gambling was taking place on their premises. Several additional recommendations were urged upon both federal and state authorities in areas of criminal activity that did not involve gambling.
The committee had impacts beyond the presidential campaigns of Estes Kefauver. As a result of the hearings, many persons were charged with being guilty of committing contempt of the Senate for their misinformation. The report of the committee listed thirty-three notorious individuals who were cited for contempt and other charges as a result of the hearings. Additionally, many states followed recommendations and set up their own committees and commissions where they had not done so before. Through the 1950s many local gambling establishments across the country were closed down – in some places one by one, in other places en masse.
The effects on Nevada gaming were mixed. The efforts of other states to crack down on gambling pushed many illegal operators in other jurisdictions to Nevada. The state also experienced growth, as it became known as the singular place where many casinos could operate openly. Also, the attention of the committee influenced the state to improve its gaming regulatory structures with the creation of a specialized Gaming Control Board in 1955 and the Nevada Gaming Commission in 1959. Also influential in pushing regulatory improvements in the state were the work of the McClellan Committee and the administration of Gov. Grant Sawyer. <

The Kansas lottery began operations in 1987. It offers instant games, daily numbers games, and lotto, as well as participation in the multistate Powerball game. Three small Native American reservations – Iowa, Kickapoo, and Pottawatomie – won the right to offer casino games after a long struggle for a compact with the state of Kansas. One governor signed a compact only to have it repudiated by the legislature. A later compromise in the mid-1990s allowed limited gaming on the reservations.
Kansas City, Kansas, is within the Greater Kansas City metropolitan area, so it is directly accessible to the riverboat casinos of Missouri. The competition of the riverboats has effectively destroyed the market for Woodlands racetrack, which is located just west of Kansas City. Kansas allows pari-mutuel wagering for both dog and horse races. As a consequence, the owner of the track launched efforts to establish casino games on his property. The efforts have not been successful, but they are sure to continue. <

“Canada Bill” Jones (1820–1877) was the master of three card monte in the middle years of the nineteenth century. Stories are told about characters in the gambling world, and some of the best are told about Canada Bill. When he was circulating through the South during the post–Civil War years conning people with his monte games and looking for any action, he found a poker game. As he entered the game he was warned that it was a crooked game. He responded simply, “I know, but it is the only game in town”. Certainly the same story has been told about other gamblers. It was quite likely to be true about Canada Bill, however, who in his lifetime won millions of dollars on his own specialty game. He then turned around and lost the money gambling in other games, usually poker and faro games.
After his funeral in Reading, Pennsylvania, in 1877, it was reported that while two gamblers were lowering the coffin into the ground, one said, “I’ll bet you my hundred against your fifty”. “On what?” said the other. “I’ll bet that he isn’t in the coffin”. He then related that Canada Bill had squeezed out of tighter boxes in his lifetime. Indeed, he had gotten out of town ahead of his victims on more than several occasions. During the 1850s he traveled the Mississippi River with his monte operation in a partnership with George Devol. Devol was a fighter. But Canada Bill was only 130 pounds and afraid of a fight. He knew how to get Devol to make a defensive stand as he led the escape from the “tight” situations.
Bill Jones was born in Yorkshire, England, to a family of gypsies.  He was raised among fortune-tellers and horse traders and thieves. He learned that the secret of living involved using con jobs. In his early twenties he moved to Canada, whence came his nickname. There he met his gambling mentor, Dick Cady, who taught him the sleight-of-hand operations of three-card monte, a card game that worked like the proverbial shell game. When Jones heard about the riverboats, he left the frozen tundra behind, becoming a man of the South.
After touring the river for several years, he worked his scams on the new railroads in the United States. He actually proposed to one line that he be given a monopoly concession for the train. He was denied the exclusive opportunity and had to travel with other gamblers – probably guaranteeing that he would not keep his winnings. Canada Bill was the best at three card monte, as he could almost change a card as he was throwing it down to the table. In his later years he worked county fairs and a world fair, and also racetracks. He was unlike other professional gamblers of the era, as he did not dress to impress. Quite the opposite, he always appeared as the rube, unshaven, in rumpled oversized clothes, looking like a sucker ready to be taken. He often said that “suckers had no business with money, anyway”. He was what he appeared to be. He died a pauper. <

See The Gambling Devices Act <

Pachinko may be a funny sounding word. Actually it is derived from the sound – “pachin-pachin” – that is made by balls as they bounce down the face of the game board toward winning or losing positions. It may be a funny-sounding game, but it produces some serious wins.
Pachinko has its origins outside of Japan. Some suggest that the game comes from Europe, but most find beginnings in the United States. The Corinthian game was played in Detroit in the early 1920s.  The game was played with a board placed on an incline. Balls were shot up one side of the board and then fell downward onto circles of nails (arranged like Corinthian architecture) and bounced into winning slots or fell into a losing pool at the bottom. Players were given scores and awarded prizes for their play.
The game developed in two different directions. In the United States it graduated into the popular pinball games that were found in recreation halls across the land until computerized games replaced them in the 1960s. The Corinthian game moved to Japan, and in the 1930s parlors were developed offering play. The game board was placed upright into a vertical position to save space. Machines were also converted so that the balls could come out of the machine in increased volumes if winning placements were made.
Soon the machine was the most popular recreational game in Japan. In 1937, however, Japan commenced military action in China, and the nation assumed a wartime posture. The game was made illegal as plants making the games were converted into munition factories. The government did not want individuals to waste time at play, and many of the players were drafted for military service.
After the war the machines were made legal once again. The government now encouraged play, as the occupying armies used play as a means to distribute scarce goods to the public – cigarettes, soap, chocolate. Players “won” balls from the machine, then exchanged the balls for merchandise. No cash prizes were allowed (which is still the case). In ensuing decades the machines were refined. Shooting mechanisms enabled players to put over 100 balls a minute into play. Pachinko machines incorporated new games within the game. Slot machine–type reels were placed in the middle of the playing board. As balls went into winning areas, the reels spun, enabling greater prizes to be won if symbols could be lined up in winning combinations.
Machine operators have the opportunity to make payouts greater or smaller by moving the nails on the surface of the playing boards. Players find that when the nails are farther apart, the balls are more likely to fall into a winning position. Experienced players will look for such machines. Also, they will play on certain days when the weather may cause the nails to be loosened. Particular players may be consistent winners; however, even a very inexperienced player can achieve wins when a ball activates the slot-type reels and they end up in a jackpot position. Typically the machines pay out a maximum of balls worth about $160 for a top jackpot.
A new variation of the game called pachi-slo has been introduced. The game is essentially like the reel slot machines found in casinos all over the world. After the reels are activated, however, they may be stopped individually by the player’s pushing buttons. With a special skill the player is supposed to be able to line up symbols in winning patterns. The reels spin so fast, however, that almost all winners claim their prizes through luck.  Although pachinko wins are conveyed in balls from the machine, pachi-slo machined use tokens for play, and tokens come out for winners.
With both types of machines the balls and tokens are converted by a weighing machine into tickets with winning amounts written upon them. The tickets are traded for prizes at a special booth within the parlor. Prizes popularly won include cigarettes, music tapes, and compact discs.
Well over 90 percent of the winning players, however, choose to trade tickets for small plastic plaques, which ostensibly have value in and of themselves. Usually they include small pieces of gold or silver. But no player wants the little bit of precious metal. Instead, they take the plaques to a designated money exchange booth that is usually very near the pachinko parlor. There they receive cash payments. The process of converting balls or tokens into tickets into prizes into cash costs the player about 25 percent of the prize. That is, 100 balls for play will typically cost 400 yen (about $5). If a player wins back the 100 balls, the ticket will enable him to trade the win for a prize worth 400 yen retail. The plastic plaque may be traded at the money exchange for 300 yen cash. The parlor does not really care which way the player goes. After all, the retail merchandise costs the parlor only 300 yen. The exchange booth operators may take a portion of the win when they sell the plaque, as they are a separate business. Even so, the parlor owners sometimes may have close ties to the exchange businesses.
Today there are approximately 18,000 parlors in Japan. Collectively they have 4 million machines. About 80 percent of the machines are pachinkos and the rest pachi-slos. The parlors may also have rooms with other kinds of amusement machines that give prizes. Each machine wins an average of over $5,000 per year, substantially less than the slot machines of U.S. casinos. The machines cost only about $1,000 each, however, and halls choose to have an excess of machines so that experienced players as well as others can have the opportunity to select machines for play. The United States has about one slot machine for each 400 residents, but Japan has one gaming machine for each thirty residents. And that makes for a lot of gambling.
The reluctance of Japan to embrace casino-type gambling in part derives from a feeling that gambling enterprise is closely connected to bad influences – in Japan, that might mean the Yakusa, or organized crime. There is a fear that the Yakusa has ties to the pachinko industry.
Like the democracy of Pericles and the Golden Age of Athens, citizenship privileges in Japan are for the most part reserved for people of Japanese origin. Residents with Korean or Chinese family ties may be excluded from entrance to the major corporations of the land, and for some of the time after World War II, their children were not allowed into the universities. Those with entrepreneurial spirit had to “go it alone”. These “foreign” (so considered even if native born) Japanese developed mom-and-pop retail businesses, and they also gravitated toward pachinko. At first most parlors were small and independently owned. Also, pachinko, although very popular, was considered somewhat unclean – perhaps like pool, pinball, and slot machines were in years past in the United States. The traditional Japanese did not want to associate with the business. Organized crime groups also moved into the industry, many with Korean ties. Today the police worry that some pachinko parlor funds are utilized to support drug activities and gun smuggling. There is an ongoing fear that funds are skimmed and sent to North Korea where the Communist regime uses them to purchase nuclear materials.
These suspicions have led various members of the industry to band together to form an association with the goal of cleaning up the industry as well as the image of the industry. The group is hoping that the government will revise the prize structure of the games so that players can win cash prizes directly from the machines. The police are reluctant to do so, because, as one National Police director told me during an interview in Tokyo on 10 August 1995, “we don’t want gambling in Japan”. <

The Japanese are known in Las Vegas as “prized customers”, “top-rated quality players” and “high rollers”. Deservedly they are given first-class treatment whenever they hit the Strip. Moreover, it is well recognized that Japanese manufacturers supply some of the best gaming equipment for U.S. casinos. Japanese have even owned gambling halls in the United States. Although it is known that the Japanese people are very attached to gambling enterprise, there may be a false notion that the Japanese do not gamble very much at home. Nothing could be further from the truth. Per capita gaming in Japan far exceeds that present in the United States.
Over the years, trade journals have given only the slightest attention to the games of Japan. International gaming charts indicate that the country has lotteries and pari-mutuel racing, but no casinos. Comments on what various countries are doing regarding gaming almost always leave Japan out. In the history of the now defunct Gambling Times, there was only a short article on motor boat racing in Japan and another one on amusement machines. The leading trade journal, International Gaming and Wagering, devoted only one short survey article to Japan gaming in 1994. It would be helpful if the literature gave more attention to this gambling-intense country, perhaps in an elaboration of the 1994 piece.
Gambling, as we would call it, or entertainment with prizes, as the Japanese police would call it, is very big in Japan. Japan has 130 million people—approximately half the population of the United States. Yet the total gambling revenue of Japan is more than equal the $35 billion gross win of U.S. casinos, lotteries, and pari-mutuel racing venues.
Part of the illusion that Japan does not gamble comes from the fact that there are no casinos in Japan – that is, casinos in the U.S. sense of the word. But make no mistake about it, there are gambling halls in Japan – almost 20,000 of them. They offer players opportunities to win prizes by playing “skill” games on pachinko and pachi-slo machines. Even though there are elements of skill in pachinko, luck is a major factor in the game. Thirty million people play on the 4 million machines around the country. The machines produce wins equivalent to US$21 billion each year. In other words, the entertainment machines with prizes win more money than is won by all the casinos – commercial, Indian, and charity – of the United States.
Pari-mutuel wagering is permitted both on and off track for motorboat, bicycle, and horse racing. Japan is unique in being the only place where wagering is offered for bike and boat races. Large stadium structures permanently line banks of rivers where the boat races take place. As there is “skill” in making wagers, the government denies that there is gambling involved in the enterprise. The race betting may not be “gambling”, but make no mistake about it, it is big-time wagering. The Japan Derby (Imperial Cup) horse race each fall (November) produces a handle exceeding the collective handle of the Triple Crown in the United States.
Lotteries are in a growth phase. Until recent years, the games were passive weekly draws that were slow and did not permit the player much involvement in selection of numbers. Instant games have been played since the late 1980s, however, and in 1995 a numbers game in which the player selects the number was added. A national lottery run through the Dai-Ichi Kangyo Bank leads the world in sales for a single lottery. <