The legal status of gambling in the United States is very difficult and somewhat chaotic while it has changed over the past 100 years. We all know that gambling wasn’t always like it is now. What began as a widely outlawed activity in the early 1900s has evolved into a complex scheme of regulations that vary by state. Each state has its own policy. From the first bold legalization in Nevada during the Great Depression, through the spread of casinos to places like New Jersey and Mississippi, the rise of Native American gaming via tribal casinos, it’s all the history of gambling in the US.
Early Bans and Nevada’s Legalization
At the start of the 20th century, most forms of gambling were illegal across the United States. You simply couldn’t find any gambling establishment that served clients. By the 1910s every state had outlawed gambling due to moral and social concerns. Even Nevada enacted a ban in 1909. By the 1920s, Americans could only legally gamble in very limited forms and most gambling halls were forced to go underground.
In the depths of the Great Depression, Nevada faced dire financial straits and population loss. In 1931, desperate to stimulate the economy, the Nevada state legislature voted to legalize all forms of gambling, making Nevada the first state to re-legalize casino gaming in the modern era. This was a start of something new and big in terms of entertainment and casino games in the state. This move, signed into law by Governor Fred Balzar on March 19, 1931, marked a turning point for US gambling laws.
Las Vegas casinos were modest clubs along Fremont Street. Slot machines became a casino staple, drawing people to play 777 games and win jackpots.
Atlantic City and the Spread of State Casinos
For many years, Nevada stood alone with legal casinos. In 1976, New Jersey citizens approved a constitutional amendment to allow gambling. This referendum was a turning moment in US gambling history as it made New Jersey the second state to legalize casinos, breaking Nevada’s long exclusivity. Resorts International opened in 1978 amid expectations that gaming would revive the city’s fading economy.
New Jersey’s move demonstrated that casino gambling could be used as a tool for economic development outside Nevada. It wasn’t long before other states followed in more limited ways. During the 1980s and especially the early 1990s, a wave of states enacted laws to permit casinos under various conditions. Unlike Nevada (and later Louisiana), most of these states did not legalize gambling statewide, but rather authorized it in specific locations or formats. Some states approved “riverboat casinos” – gambling vessels or barges permanently moored on rivers – while others allowed casinos only in certain historic towns or at licensed racetracks (so-called “racinos”). This era saw the rapid spread of commercial casinos to new regions:
- South Dakota (1989): Legalized limited-stakes gambling in Deadwood.
- Iowa and Illinois (1991): Launched the nation’s first riverboat casinos.
- Mississippi (1992): Launched gambling on riverboats and along the Gulf Coast.
- Colorado (1991): Allowed casinos in Central City, Black Hawk and Cripple Creek.
Native American Gaming and the Indian Gaming Regulatory Act
A parallel revolution in US gambling industry was driven by Native American tribes. Federal law considers tribes as sovereign nations, and a few tribes realized they could use gambling on their lands to generate revenue. In 1979 the Seminole Tribe of Florida opened a bingo hall on its land turning it into the first tribally owned casino in the United States. The success of the Seminole’s bingo casino quickly drew attention as well as legal challenges from state authorities.
By the early 21st century, tribal gaming was a major segment of the industry. Dozens of states had tribes operating Class III casinos under IGRA compacts, and many more tribes ran Class II bingo halls and slot-like games. Nearly 240 federally recognized tribes in 28 states conduct some form of gambling operations on their lands. Tribal casinos range from small bingo facilities to big resorts. The Indian gaming boom not only provided economic opportunity for many Native American communities but also introduced gambling to regions that might otherwise never have seen it.
The Rise of Online Gambling and Modern Legal Frameworks
As gambling was widely spread in physical locations through the late 20th century, after the Internet became popular, online gambling started developing. The mid-1990s saw the debut of the first online casinos and poker sites, which allowed people to wager on games via the internet. Initially, this development outpaced U.S. law. Off-shore companies began offering online casino games to US citizens and millions of Americans tried their luck on these early websites. By the early 2000s, online gambling had grown into a significant gray industry, with popular virtual poker rooms and casinos accessible from any home computer.
In 2013, New Jersey launched a regulated online gaming market. How cool was that back in the days. It was a big milestone for both the industry and the players. This allowed Atlantic City casinos to offer internet-based slot games and poker to players located within the state. Delaware and Nevada did the same that year. These were the first legal online casinos in US history at the state level.
Future Outlook
From the lone outpost of legal gambling in 1930s Nevada to the internet casinos and huge resorts, the evolution of gambling in the US was dramatic. Now a vast majority of Americans live within a few hours’ drive of a legal casino or have access to some form of regulated casinos online. Major milestones like New Jersey’s Atlantic City experiment, the enactment of the Indian Gaming Regulatory Act, and the advent of licensed online operators have each added new layers to the complex regulatory mosaic.
Many states that historically resisted gambling now closely look at the tax revenues and new jobs are created in the neighbouring states. And that’s the case for a few states now. At the same time, regulators and lawmakers warn communities about the social risks and are not that open to the idea of making the casinos legal. The balance between economic benefits and social costs will likely guide future legislation.
