According to the American Gaming Association and Christiansen Capital Advisors, consumers spend more on legal gambling in the United States than movie tickets, recorded music, theme parks, spectator sports, and video games combined. In 2017, gross gaming revenues totaled $240 billion, with gamblers placing about $2,500 billion in legal wagers.
Early History of Gambling
Gambling has held human beings in thrall for millennia. It has been engaged in everywhere, from the dregs of society to the most respectable circles. Pontius Pilate’s soldiers cast lots for Christ’s robe as He suffered on the cross. The Roman Emperor Marcus Aurelius was regularly accompanied by his personal croupier. The Earl of Sandwich invented the snack that bears his name so that he could avoid leaving the gaming table in order to eat. George Washington hosted games in his tent during the American Revolution. Gambling is synonymous with the Wild West. And “Luck Be a Lady Tonight” is one of the most memorable numbers in Guys and Dolls, a musical about a compulsive gambler and his floating crap game. The earliest known form of gambling was a kind of dice game played with what was known as an astragalus, or knuckle-bone. This early ancestor of today’s dice was a squarish bone taken from the ankles of sheep or deer, solid and without marrow, and so hard as to be virtually indestructible. Astragali have surfaced in archeological digs in many parts of the world. Egyptian tomb paintings picture games played with astragali dating from 3500 BC, and Greek vases show young men tossing the bones into a circle.
While some may think that gambling is a recent phenomenon, it actually dates back to antiquity. Dice have been recovered from Egyptian tombs, while the Chinese, Japanese, Greeks, and Romans all were known to play games of skill and chance for amusement as early as 2300 B.C.
Both Native Americans and European colonists brought a history of gambling from their own cultures that helped shape America’s views and practices. Native Americans developed games and language describing gambling and believed that their gods determined fate and chance. In 1643, explorer Roger Williams wrote about the games of chance developed by the Narragansett Indians of Rhode Island.
British colonization of America was partly financed through lottery proceeds, beginning in the early 17th century. Because lotteries were viewed as a popular form of voluntary taxation in England during the Georgian era, they also became popular in America as European settlers arrived here. Prominent individuals such as Ben Franklin, John Hancock, and George Washington sponsored a half-dozen lotteries that operated in each of the 13 colonies to raise funds for building projects. Between 1765 and 1806, Massachusetts authorized lotteries to help build dormitories and supply equipment for Harvard College; other institutions of higher learning, including Dartmouth, Yale, and Columbia, also were financed through lotteries. A lottery even was approved to finance the American Revolution.
An intuitive sense of the notions underlying probability has probably characterized winning gamblers since gambling was invented. The Greeks had a word for probability, “eikos”, with the modern meaning of “to be expected with some degree of certainty,” and Aristotle came close to putting quantities to it when he wrote in De Caelo that “… to repeat the same throw ten thousand times with the dice would be impossible, whereas to make it once or twice is comparatively easy.”
The intuitions of gamblers began to find their way into mathematics in 1494, when a Franciscan monk named Luca Paccioli posed what came to be known as the “problem of the points,” drawing from a gambling game called balla. “A and B are playing a fair game of balla,” he stipulated. “They agree to continue until one has won six rounds. The game actually stops when A has won five and B three. How should the stakes be divided?” The first approach to answering the question was given about fifty years later by Girolamo Cardano, a Renaissance polymath, and self-confessed chronic gambler, but was not published until 1663.
The credit for inventing probability theory goes to Blaise Pascal and Pierre de Fermat, who in the course of a correspondence in the 1650s solved the problem of the points by means of what has become known as Pascal’s Triangle, a way of laying out the number of ways in which a particular event can occur. Armed with Pascal’s Triangle, it is possible to determine the proportion that anyone, or any combination, of those events, represents the total.
As the gaming industry has expanded throughout the United States, the gross annual revenue has steadily increased. Gross gambling revenue (GGR) is the amount wagered minus the winnings returned to players, a true measure of the economic value of gambling. GGR is the figure used to determine what a casino, racetrack, lottery or other gaming operation earns before taxes, salaries and other expenses are paid – the equivalent of “sales,” not “profit.” In 2003 for example, the commercial casino industry had GGR of more than $27 billion (not including deepwater cruise ships, cruises-to-nowhere or non-casino devices), but paid $11.8 billion in wages and benefits and more than $4.3 billion in taxes, plus other expenses.
In 2017 the U.S. casinos generated about $240 Billion annually, almost as much as the total state budgets of New York and Texas combined. The casinos’ industry supports more than 1.7 million American jobs, more than twice the size of the D.C.S employment base. The tax revenue of the casinos’ industry contributes $38 billion each year to local state and federal governments, enough to pay more than half a million school teachers’ salaries.
American voters value the casinos in their communities. A 2014 survey by respected pollsters Mark Mellman of The Mellman Group and Glen Bolger of Public Opinion Strategies shows more than 70 percent of voters believe casinos promote job creation. American voters believe casinos improve their communities and help local economies. Nearly six-in-ten voters surveyed say casinos help the economies where they are located. Oxford’s study reveals the benefits that explain this growing appreciation.