Gambling in American History

Poker is the most widely known card game. In one or another of its many formats, it is played more often than any other game. Live poker games are typically player-banked games that involve not only the luck of drawing certain cards but also much skill in determining how the cards should be played in order to defeat the hands held by other players. Some forms of the game, typically those played with machines (video poker), are house-banked games in which the player seeks to achieve hands of certain values in isolation of any other hand, whether held by a person or by a machine. (As the preponderance of poker players are male, in this entry I will use male gender forms to refer to players).

The Poker Hand

All poker games are based upon the value of a five-card hand. The ten best hands are listed here in descending order.
1. A royal flush consists of an ace, king, queen, jack, and 10, all of the same suit (e.g., all hearts or all spades).
2. The straight flush also consists of five cards in the same suit and also in order. Next to the royal flush, the best straight flush would be king, queen, jack, 10, and 9 of the same suit.
3. Four of a kind consists of four aces, four kings, four 2s, and so on.
4. A full house consists of three of a kind and two of a kind (a pair). The highest-ranking full houses have the top three of a kind (three aces and another pair).
5. A flush consists of five cards all of the same suit but not necessarily in any order or sequence.
6. A straight is a consecutive sequence of cards that are not necessarily of the same suit, for instance, a 3, 4, 5, 6, and 7 of varying suits.
7. In a three of a kind, the cards are of the same rank (three 4s, etc.), along with any two other cards.
8. Next is the combination of two pairs of cards and one other card. The highest pair would decide the value of the hands if two players had two pairs each.
9. The next combination is one pair.
10. Last is a hand valued by the highest card in a hand without at least a pair. (In Pai Gow and Pai Gow poker, two card hands are ranked according to the highest pair [the best hand is two aces] or the highest card if there is no pair).

Draw and Stud Poker

Two styles of poker games are draw poker and stud poker. In draw poker, the several players are each dealt (in turn) five cards. They may then request up to three new cards (more in some games) and throw away up to three cards. In the other form, stud poker, there is no draw. The player must utilize the cards that are dealt the first time. Stud poker games may involve more than five cards. In seven-card stud, the player is asked to make the best five-card hand possible from the seven cards.
The sequence of betting is tied to the rules of particular games.  For two examples, consider five-card draw and a seven-card stud game called hold ’em, a game popular in Las Vegas. In a five-card draw game, all players at a table make an initial bet (called an ante). Then five cards are dealt to each player, all face down only, for the one player to see. Usually there must be at least one player with a minimum hand (for instance, a pair of jacks or better) in order to start the next round of betting. Such a player may open with another bet, and other players decide to either stay in the game and match the bet or drop out. Other players also may raise the bet, requiring all others to meet the raise or drop out. (Rules of the particular game put limits on the amount of bets and raises. If there are no limits, a person is entitled to stay in a game by placing all his money into the game pot. His winnings are confined to moneys equal to his bet from each other player. If he loses he is out of the game.) The players then throw away cards they do not want and draw new replacement cards. They then engage in another round of bets and raises according to rules (some games limit the number of raises to three). The final player to call or raise then must show his cards; others may drop out without showing cards. Of course the player who wins must show his cards. All cards are secret until the final play is made.
In variations of stud poker, cards are dealt face up as well as face down, so that all players can know partial values of their opponents’ hands. In seven-card hold ’em, there is an ante bet, and then initially two cards are dealt face down to each player. There is then another round of betting that is followed by a dealing of an additional three face-up cards that are placed in the center of the table. These are common cards. Each player now can make a five-card hand. Then another round of betting ensues in which players match each others’ bets or drop out. A fourth common card (one that may be used by any or all players in their hands) is dealt for all to see, and there is a final round of betting. Finally, the fifth common card is placed upon the table, and each remaining player puts forth his best five-card hand using his own two cards and three of the five cards from the common pool of cards on the table.
Each of these poker games involves many calculations of which cards are likely to be dealt from the remainder of the single deck that is used for the games, as do the many variations, including low ball, in which bettors seek to have the lowest hand at the table. There are also great psychological skills used to seek how to discover signs that will reveal what an opponent may be holding. The main questions asked about the heavy bettor in a game are, “Is he bluffing?” “Does he really have a good hand, or is he just trying to scare others out of the game?” If all others drop out, he can win without having to show his hand. As suggested by Kenny Rogers’s famous gambling song, each hand can win, and each hand can lose, depending upon how it is played and on how the player is able to “read” other players. Even a royal flush can be misplayed in such a way that the one holding it can really be a “loser”. If the player cannot conceal his joy at such a good hand, the other players will drop out, and all he will win is their ante. If played properly, the hand can be used to draw out big bets from the other players. Players seek to find characteristics called “tells” that will reveal an opponent’s holdings.
The live-card poker game among players is extremely exciting. The game is one that, more than any other, attracts professional players. Some of them actually make a living with their skills, although there are not many examples of biographies revealing players who kept their fortunes well into old age.

Caribbean Stud Poker

Other forms of poker games do not have the suspense and psychology of the live player-banked game, but they do involve the poker hand. In Caribbean stud poker (a house-banked game), the player puts his five-card stud hand against a dealer’s hand.
First the player makes an ante bet. Then the dealer gives him five cards and also takes five cards. Four of the dealer’s cards are down, and one is up for the player to see. The player looks at his cards and then either drops out or bets an amount double his ante. The dealer does not look at his cards until the players’ bets are finished. When he looks at them, he determines if he has a “qualifying hand.” The qualifying hand has at least an ace and king cards high or one pair. If the hand does not qualify, the dealer folds and pays the remaining players a win equal only to their ante bet. The second bet they made is simply returned.
If the dealer’s hand is qualified, however, the player either loses or wins an amount equal to the ante and the second bet.  He also is eligible to win a bonus depending upon the value of his hand. For instance, a straight gets a 4-to–1 bonus (on the second bet amount); a flush, 5-to–1; four of a kind, 20-to–1; and a royal flush, 100-to–1.
There is also another side bet that the player makes at the beginning. He may bet one dollar on the value of his hand, and he can win a special payoff if he stays in the betting, even if the dealer’s hand is not qualified. The casino will have a progressive jackpot for this bet. A flush will get $50, a full house $100, a straight flush 10 percent of the progressive jackpot, and a royal flush the full jackpot. The progressive meter displayed above the Caribbean stud tables attracts players with the notion that they can win six figures on a one-dollar bet. Experts who study the game find that this extra one-dollar bet favors the house until the progressive jackpot grows beyond $200,000, which is rather rare.

Let It Ride

The game of let it ride poker was introduced to Las Vegas casinos in 1993 and has gained some popularity with casinos in many jurisdictions. Like Caribbean stud, it is a five-card stud poker game that is house banked. In this game the player hopes to get a hand with a good value. There is no dealer’s hand. The player lays three equal bets on the table. Each player then receives three cards face down. At that time he may let his first bet stay on the table, or he may withdraw it. A fourth community card is dealt (to be used by all players), and he then can make another decision to withdraw his second bet, or “let it ride.” His third bet must stay. Then a final card, also a community card, is revealed. He now has his hand. The hand is paid off according to a schedule. If the player does not have at least a pair of tens, he loses. The one pair of tens gets the bettor’s wagers returned to him. Two pairs give him a 2-to–1 return; a flush, 8-to–1; a royal flush, 1,000-to–1. Like Caribbean stud, there is also an opportunity to make a one-dollar bonus bet that pays off $20,000 for a royal flush and less for other good hands. On this bonus bet payoff, the expected return to the player is less than 80 percent, whereas the basic game pays back over 96%.

Pai Gow Poker

Pai gow poker is a house-banked even-payout game. The player is given seven cards, as is the dealer. Each then makes his best two-card and best five-card hand. If both of the player’s hands are better than the dealer’s two hands, the player wins but pays a 5 percent commission on the winnings. If both of the dealer’s hands are better, the dealer wins; if one is and one is not, it is a tie. One fifty-two-card deck is used along with a joker, which may be used as an ace or as a card to complete a straight or a flush. The best possible hand is five aces.

In a player-banked game, the money wagered by the players is either put against the funds of one other single player who acts as “the bank” (much as in a house-banked game), or it is put into a common pool of funds that is then distributed to the winner (or winners) when the game (hand) is over. Player-banked games include many variations of live poker games, special variations of blackjack such as California Aces, and pari-mutuel games in which wagers are placed on results of horse or dog races and jai alai games in the United States and Canada.
In poker games that are played socially – probably the most prevalent social game in North America – players usually make an ante bet, that is, a wager before any cards are dealt. The ante is thrown into the middle of the table area. Then either as successive cards are dealt or as individual players are asked to state what they are willing to risk if the game continues, extra money is thrown into the center area by all players wishing to remain in the game. When the betting is done (according to the rules of the game), the winner is determined, and all the money is given to the winner.
When such games are played in casinos or poker rooms (as in California), the house provides a neutral dealer who oversees and monitors the game to ensure that it is honest and that specific rules of the game and rules on betting procedures (antes, raises, limits) are followed.  For this service, the house charges either a per-hand price to each player in the game, a fee based upon the time the player is at the table (usually collected each half hour, as in California), or a percentage of the money that is played in the game (the practice in Las Vegas casinos).
The players in the player-banked game are seeking to win money from each other and not from the casino or the poker room organization. In traditional baccara, players rotate the bank, holding it as long as the “bank” position in the game is a winner, then when losing passing it on to an adjacent player. The bank therefore passes around the table as if it were a train moving on a track. The game is also known as chemin de fer, a French expression meaning railroad. In charitable bingo games, the organization running the game sells cards for play. After all cards are sold, the organization totals up the sales (money that comes from the players), takes out its share (usually 20% to 40%), and then announces the amount of money that will be given to the winner(s).
Several Native American tribal casinos use player-banked systems for games that are normally house banked. For instance, in both California and Texas, tribal casinos offer a standard blackjack game with extra opportunities for player wins. The casino still wins money from the actual game, however. This money is then placed into a pool, and players are given chances to win the pooled money by spinning a wheel or playing another chance game. In this way, 100% of the money played is returned to the players, so in a very real sense, their play is merely a redistribution of money among themselves. Another player-banked version of blackjack is called California Aces. Cards are dealt in a standard fashion, but there is no dealer hand. Also there is no busting (losing) for going over 21. Actually 22 is the best hand, and other hands are ranked according to how close to 22 they are, with lower numbers being superior to numbers over 22. (For example, the order of best to worst hands is 22, 21, 23, 20, 24, 19, 25, 18, and so on). All money played goes to the player with the best hand. The casino does not collect any money from the game; however, the players in all these games pays the casino a fee for each hand they play. (After Proposition 1A passed in California in 2000, the Native American casinos there made compacts that allow them to offer house-banked games). <

A variety of gambling activities is permitted in Peru, including horse racing, cockfighting, lotteries, and casinos – the last becoming legal only in 1992. At that time the country of nearly 25 million persons was in the midst of a violent struggle with revolutionary guerrillas. The economy was on the edge of collapse with unmanageable inflation. Things turned around in the past decade. What was once a hostile atmosphere for casino operations is now a strong market in a stable political and economic situation under the leadership of former president Alberto Fujimori.
The Peru casino law requires that full casinos must be located in one of ten tourist zones. They receive ten-year renewable licenses, and they pay taxes of 20% on their gross gaming wins.
The capital city of Lima has about 80% of the casino action in the country. The city has eight full casinos, and another forty are located around the country. Most of them are privately owned, although the government owns some. There are also separate slot machine parlors. In all there are over 5,500 total machines in Lima, including a Megabucks system linking 300 machines and offering prizes in excess of $100,000.
Whereas an overall political and economic stability helps the gaming industry in general, continuing disputes over whether the national or the local law applies to the slot machine parlors has caused much confusion. In 1996 the national government set forth new rules that resulted in the closings of over half of the slot parlors. The rules required casinos to have at least 120 machines each and to guarantee 85 percent payouts; they were not allowed to have machines over five years old. Many parlors could not comply and closed. Others went to court and got injunctions against enforcement of the new national rules. They continue to operate while others seek to follow the rules, and the market continues to be in disarray.
Growth of the Peruvian casino industry is unlikely, as the markets are near saturation at the moment. It is estimated that over 90 percent of the play comes from local residents and not from tourists, a situation that does not allow for casinos to contribute to the economic development of a country. <

Pennsylvania has had a wide variety of legalized gambling activities for many decades. But even before wagering on harness racing and thoroughbred racing was authorized in the 1930s, there was an established illegal network of numbers games and casino games. A lottery was established in 1971, and charity bingo was given the stamp of approval by government in 1981. Illegal numbers gambling persisted. This was evidenced by the “666” scandal that touched the state’s legal lottery in 1979. A Pittsburgh television station that announced lottery results controlled the Ping-Pong balls used for the state lottery’s numbers game. A dishonest person approached the television announcer and made an offer that should have been refused. But instead the television announcer allowed the dishonest person access to the lottery balls; that person then applied weights (using a paint substance) to all but the fours and sixes. A network of confederates then traversed the state making bets on all three-number combinations of fours and sixes. There were eight such combinations. Unfortunately, 666 came up. This is a very popular number for bettors in that it has biblical significance. Not only the network of dishonest people but also the general population bet heavily on the number. But the population bet on the numbers with illegal gamblers as well; and the illegal gamblers used the state-selected number as their winning number. The state and the illegal game lost more money to winners on that day than they had ever lost before or since that time. The illegal gamblers became suspicious, as there were rumors that people were betting heavily on certain numbers in certain locations. In a case of good and evil working together to protect the integrity of the game, the illegal numbers organization launched its own investigation, tracked down people in the network, and then informed the state police, who in turn were led to the television announcer. He and the others received prison sentences for their involvement. There were two consequences of the “666” scandal that merit consideration. First, there was no state oversight of the rigged game; after all the state ran the game. After cheating was discovered, there was no attempt to close down the game. The numbers game continued without any interruption. Second, the state made no attempt to reimburse the losing players who were cheated in the scandal.
From the moment legal casinos opened in Atlantic City, Pennsylvania could feel the dollars flowing out of the state. Entrepreneurs found it easy to convince many government officials that Pennsylvania had to legalize casinos in order to keep gambling revenues in the state. There were several campaigns for casinos in the 1980s and 1990s. The first major effort focused upon establishing casinos in three Pocono Mountains resort area.
Caesars World was a campaign sponsor, as they had purchased four resort properties in the area. Wayne Newton also owned a Pocono property. Several polls and advisory votes were taken in the region, and in all cases the residents rejected the idea. The governor also offered his opposition. Legislative bills for casino failed in 1981, 1982, and 1983.  In the early 1990s, following Iowa’s lead, several bills were introduced to permit riverboat casinos. One plan had 20 boats in the state, with from 5 to 10 in Philadelphia, 5 in Pittsburgh, 2 in Erie, and others in the northeast part of the state. The plan failed to get a floor vote in either house of the legislature. In 1999 the boat plan was attached to a plan for slot machines in bars and taverns and at tracks. The governor said he would approve the bills if the legislature called for a popular referendum. Three bills appeared headed for passage, calling for three separate statewide votes. Opponents, however, maneuvered votes to defeat the measure, and Pennsylvania exited the century with no casinos or machine gaming. <

Edward Pendleton was a nineteenth-century gambling service provider for the nation’s leaders. To get an idea of what he provided, just suppose that the mid-1990s proposal for a legalized casino within the jurisdiction of the District of Columbia had passed. Imagine that congressmen, cabinet members, Supreme Court justices, maybe the president himself, could come to the casino and be wined and dined, then offered credit for gambling at the tables. Imagine lobbyists circulating within the facility the day before a major vote in Congress or a major decision by the court. Imagine the opportunities to buy favors, to line the pockets of the mighty in exchange for policy outcomes. Well, it is not necessary to imagine. You need only read a history of Edward Pendleton and his Palace of Fortune located within walking distance of the houses of government in the District of Columbia through the 1830s, 1840s, and 1850s. The facility at 14th and Pennsylvania Avenue, two blocks from the White House, became the favorite of the ruling classes. The president of the United States, James Buchanan, was a regular at the faro bank. The nation’s most important policymakers would wager at Pendleton’s faro bank and inevitably lose.  They would then become indebted to the casino owner. He, of course, was a lobbyist. Actually, win or lose, he came out ahead. It is reported that in the twenty-six years that Pendleton ran the Palace of Fortune he was responsible for the passage of hundreds of bills, most of which were private bills providing favors for selected citizens. The casino was extremely luxurious, as the owner became a very rich man.
The casino was also the meeting place where abolitionists and slave-owning senators could come together on neutral ground. Many of the compromises that kept the Civil War from erupting until 1861 may have been reached over the tables of the Palace.
Pendleton married the daughter of one of the leading city architects of the District of Columbia. The couple became a dominant part of the social scene, well respected, as many other gamblers were not in other venues. When Edward Pendleton died in 1858 at the age of sixty-eight, his funeral was attended by the president and most leaders of Congress. <

Pari-mutuel wagering systems are used for almost all horse-race and dog-race betting, as well as for betting on jai alai games in the United States. The system allows for player-banked betting with all bets pooled and prizes awarded from the pool. Winning bets on other racing events are also determined on a pari-mutuel basis. In Japan, the system is used to award prizes to winners of wagers on motorboat and bicycle races. In Oregon, sports betting card bets are distributed to winners on this basis also. The state permits players to pick four winners of football games on a single card. The state takes 50 percent of all the money played and then divides the remainder among those who picked four winners. The California lottery actually uses a pari-mutuel system for its pick-three numbers game in order to avoid exposure to high risks because many players’ favorite numbers are the same favorite numbers.  Whenever there is a pari-mutuel system, the organization running the system takes a percentage of the pool before bets are redistributed from the losers to the winners.
Although the pari-mutuel system is built on quite a simple concept, it was not a part of the betting fabric until late in the nineteenth century. It was invented in Paris, France, by Pierre Oller in 1865. Scarne’s Guide to Casino Gambling (Scarne 1978) suggests that Oller acted in response to a bookie who quoted odds on each horse before a race, but was not very good at his trade and therefore often suffered losses because too many bettors placed their wagers on the winning horses. The bookie asked Oller if he could figure out a way in which the bookie could take bets without ever having to suffer losses – the gambler’s eternal dream. Oller found a way: take bets but announce odds only after all bets were taken. Oller invented what became known as a totalizator. His tallying machine would add up all the bets on each horse, compare them, and then determine odds. All the odds could then be cut a set percentage to ensure a profit for the bookie. Soon a ticket machine was added to a totalizator device, and with the passing of time, more advanced machines made the bet-taking process more efficient and allowed tracks to consider changing their betting structures to the pari-mutuel system. As they did so, the tracks themselves became the operators of the betting on horse racing.
It is suggested that the system became known as pari-mutuel as a shorter reference to Paris Mutuel. The totalizator was first used at North American tracks in 1933; as horse-race betting was revived in more and more jurisdictions during the 1930s and afterwards, the pari-mutuel system totally displaced other betting systems.
A simple example of how a pari-mutuel wager works might find that all bettors wagered $100,000 on a race. Horse Surething attracted $30,000 of the bets in the eight-horse field. The track calculated all bets, totaled them, and then subtracted 18 percent as its fee. Actually this 18 percent, or $18,000, was divided three ways – $6,000 to the government as a tax, $6,000 to the track owners, and $6,000 as a prize for the winning horse. Sure enough it was Surething. All the people who bet on Surething were winners. Together they shared the $82,000 that was left in the pool of betting money. For example, if 500 people bet $100,000 on the race, and of these 50 bet on Surething to win, the 50 would share the $82,000 prize. They would share it in proportion to the amount they had bet. If collectively the 50 persons had bet $50,000 on Surething to win, each $1 they had bet would be rewarded with a prize of $1.64. A typical $2 bet would receive a return of $3.28, and a person who made a $1,000 bet would receive $1,640 in return. In actuality the $2 bettor would receive $3.20, because the track always rounds down to the nearest ten cents. The eight cents is called the breakage. Money from breakage is usually assigned to some party that takes money from the 18 percent (the track, horse owners, government).
In racing there are many kinds of bets (see Horse Racing). There are the straight bets – betting that the horse will come in first (win), first or second (place), or first, second, or third (show). There are also exotic bets, such as the daily double (winners of the first two races) or the exacta (picking the first-place and second-place winners in a race). For each kind of bet – show, exacta, daily double – there is a separate pool, and winners are paid from that pool alone. The betting arrangements can get very complicated, but modern computers can calculate results instantaneously, whereas in the past, several minutes would pass before a winner would know how much the winning prize was.
In the past, offtrack betting houses – such as the casinos in Las Vegas – would not participate in the pari-mutuel pools. Rather, they would simply pay the track odds and keep the takeout percentage (18%). In doing so they would put themselves at risk, as they were running a banking game. Now all participate with the tracks in the pari-mutuel system, as the offtrack bets are thrown into the same pool as the track bets. In exchange for being able to avoid the risk of being a house banker, however, the offtrack facility, such as the Las Vegas casino, gets to receive only a very small portion of the action wagered at their facility – 5 or 6% rather than the theoretical 18 percent they would have received if their bettors made wagers in the same proportion as those at the track. <

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. <