As the reform-minded progressive movement, the temperance movement, and a changing perception about gambling and corruption all took hold toward end of the 19th century, legislators moved to ban lotteries in all the states, and games of chance and wagering were widely outlawed as well. Believe it or not, making gambling illegal didn’t end the practice; it just drove it underground, where it eventually became an important stream of revenue for the organized crime syndicates that were springing up all over the country to take up the booze business after the prohibition of alcohol by the 19th Amendment. The prohibition of gambling, like the prohibition of alcohol, was pretty short lived.
Gambling started to make a comeback. Betting on horse racing was re-legalized in several states, including California and New York during the during the 1920s. And casino gambling in South Africa was re-legalized in fits and starts. Nevada started to allow it in 1931, but it was slow to take off, largely because of the state’s small population, and because gambling was still widely considered morally questionable.
The prohibitions against gambling outside Nevada continued to play out in surprising ways. One common device that was caught up in anti-gambling legislation was the pinball machine. In the 1940s, pinball was considered a game of chance, only suitable for gambling.
The police raided pinball parlors and destroyed the machines. Over time, pinball machines evolved into games of skill that people played solely for entertainment, and they were legalized in 1976, as attitudes toward gambling began to change. New Jersey legalized casino gambling in Atlantic City in 1978. By the 1990s, attitudes towards gambling had shifted, and casino gambling began to be legalized in many states, starting with Iowa in 1989. Today, 20 states allow commercial casino gambling. Thanks, Thought Bubble.
Now lotteries also started to make a comeback in the 1960s, when New Hampshire created a state lottery to increase school funding. Over the next few decades that became commonplace, and today, 44 states have government-sponsored lotteries. Legalization of casino gambling was pushed in much the same way. States that legalized gambling promised to tax casinos, and use those revenues to fund services. This leaves states and municipalities “addicted” to gambling revenues in order to continue providing services. And as legal gambling expanded in the United States, a lot of people have taken it up.
One study by the National Opinion Research Center at the University of Chicago found that 86% of adults in the US reported gambling at some point in their life, and 52% of adults reported participating in a lottery in the last year. These gamblers bet a lot of money and lose a lot of money. And I mean a LOT. According to The Economist, the world’s gamblers lost a total of $440 billion in 2014. American gamblers lost the most, giving up $119 billion in legal wagers.
And those numbers are just for casinos and other wagering business. If you count the money spent on lotteries, some estimates of worldwide legal gambling losses are as high as $10 trillion a year. So if we lose so much money, why do we keep gambling? Well people gamble so much because it triggers our brain’s reward systems.