Gambling in American History

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. <