ImageThe lure of the Big Score is as American as apple pie. America has had a love-hate relationship with it since the earliest explorations of the New World. Our first immigrants expected to find gold and other riches lying around for the taking. Unfortunately, there was a lot of gold in Mexico and Peru. The Spanish stole most of it and spread Big Score fever across Europe.

This inspired the first English settlers to expect the same luck. When it didn't happen in Virginia, a serious morale problem developed. Gentlemen who had expected easy wealth were unprepared for the hard tasks of producing food and shelter in the new land. Thus, the settlement's captain had to link eating to work. Eventually, Virginia and the subsequent New England colonies concentrated on farming and industry as they developed the new land.

People who left distant places for America mostly had a vision of freedom, industry and self-sufficiency. Their farms and businesses and expanded the nation. Yet a visceral hunger for the Big Score lingered just below the surface. When gold was found in the north Georgia mountains, in 1829, crowds rushed in to find more. Successive gold rushes in California, Colorado, South Dakota, and Alaska drew millions, changing the country dramatically. The Forty-niner became a new kind of Pilgrim. The lure of the Big Score is really a variant of the American Dream.

Politicians soon realized that Americans' lust for the Big Score could produce tax revenues for their states and localities. The venue of choice was gambling. Even churches joined the action. By 1830, lotteries were funding 47 colleges, 300 lower schools, and 200 church groups, including most minor denominations and every major denomination except the Quakers. Any city or town large enough to have a courthouse and a jail also had a lottery wheel. (When Catholic churches first starting running Saturday-night Bingo is shrouded in the mists of the past.)

The curse of the lotteries was fraud. It quickly spun out of control. There were simply too many ways to cheat, including outright theft. In 1823 Congress authorized a private lottery to fund the beautification of Washington, DC. The organizers stole the proceeds and the winner was never paid. (No beautification, either.) After 1830, lotteries were outlawed in most states. Lotteries returned to fund the Civil War and Reconstruction, but corruption reigned. Responding to public revulsion, most states finally abolished lotteries via statute or constitution by 1878.

For the next 80 years, state and local governments warred against gambling, occasionally calling a temporary "truce". Crusading politicians like Thomas Dewey built whole careers on "cleaning up" gambling and other crime. Whether gambling was legal or not made no difference to the level of activity, however. Huge consumer-demand ensured gambling's continuance, either legally or illegally, but government received no cut when gambling was outlawed. In this respect it mirrored alcohol. The 1919 Volstead Act, which prohibited alcoholic beverage commerce, produced huge illegal profits that financed organized crime on a national scale.

By the time citizens saw that banning alcohol caused more problems than it solved, the damage was done. With a large, well-funded crime organization in place, it was inevitable that illegal gambling should come under mob control. Most states and localities opposed gambling, waging long, bitter battles to drive it out. I recall a news photo of the governor of Maryland, circa 1964, smashing the state's last slot machine. Around the same time, New Hampshire re-instituted the first state lottery in nearly a century. Gambling has the proverbial heads of Hydra.

Lotteries have re-boomed in the intervening 40+ years. Today, 42 states, plus the District of Columbia, have state-run lotteries once again. Revenues from lotteries and numerous derivatives, including power ball, keno and scratch-ticket games, total $47 billion a year.

But state-run lotteries are not the only legal game in town. Twenty-five states (1) now allow in-state casino-gambling or have riverboat or Indian-run casinos. Nine states (2) permit slot-machines. Pennsylvania is considering legalizing slots, and Maryland (that old foe of the one-armed bandits) now has a Republican governor who wants them. Those old machines with the mechanical spinning wheels are gone, replaced by "video lottery terminals" (VLTs) - i.e., the electronic, push-button slot machines now common in casinos. States have allowed installation of 86,000 slot machines, and they expect 49,000 more by the end of 2007. Some 675,000 slots are now installed in private venues, including casinos and cruise ships.

Internet gambling (IG) represents a lucrative new source of gaming revenue. Revenues exceed $1.6 billion per year, but experts expect them to rise to $10 billion in a few years. But the IG market is turbulent. Many credit card companies don't want their cards used for Internet gambling. Conventional gaming establishments dislike the IG-competition. Critics cite loss of community control, lack of regulation, and lack of business infrastructure as drawbacks. They say money is siphoned off with no benefit to the players' communities. Child-involvement and an inability to ascertain that games are honest are also major concerns.

Some estimates of legal gambling run as high as $500 billion a year. Illegal gambling costs are unknown, but might be $1 trillion or more. Only seven nations have a GDP above $1 trillion.

Gambling advertisements - typically showing delirious winners tossing wads of money in the air - are as common as laundry-detergent ads were in the 1950s. The latest "ads" are televised poker-matches (e.g., the World Series of Poker) where bizarre-looking characters bet piles of money on poker hands in contrived high-stakes games. Annual winnings of these poker "superstars" are incessantly hyped, and "color" commentary about their lives and eccentricities acquaints viewers with the gambling lifestyle. In the 19th-century's wild-west heyday, gambling was never so big or so "mainstream" as now. It is truly on a roll. And (may heaven be praised) it's all "for the children". Politicians' stock answer to all criticisms of gambling is to recite how much of legal gambling's revenue goes toward education and other social programs.

Indeed, gambling is more mainstream than one might have thought. I know evangelical Christians who gamble - but only "in moderation". They see no problem with losing $100, or more, at a casino or track. In church one Sunday I heard an elder say from the pulpit that he had lost $10 at the racetrack. White-gloved ladies tittered politely. (After all, the loss was so trivial.) It reminded me of church-goers who say they drink, but only "wine with dinner". (Admitting that you just like to drink a glass of beer at the bar would be unspeakably gauche among the churchy set.)

Folks who wouldn't dream of gambling themselves also like the idea of the state raising revenues via an activity they don't participate in. I've tried to square this with "rendering unto Caesar what is Caesar's...", (3) but I can't work it out. The whole business smells bad.

Having "libertarian" political leanings (as my long-time readers know), I'm unimpressed with the prohibition approach. In earlier articles I argued that we can't just ban whatever we think is bad. (C.f. our "success" with drugs and alcohol.) Why doesn't this work? Three reasons: the demand is huge, the money is overwhelming, and we're a free society. We're simply not set up to exert the intensity of law-enforcement needed to stamp out something that enjoys such wide public support and involves so much money. We're not "bad" enough - not "Nazi" enough! - to do it. And if we were, we wouldn't be "free" any more. By outlawing gambling, we simply turn law-enforcement and crime into major growth industries. All the money goes to the cops and the crooks.

This doesn't mean that I think gambling is good - or even relatively harmless. In fact, I think it's a wretched vice at both the individual and societal level. A leisure activity that can take away everything a person has cannot be viewed as a "harmless diversion". I read about a woman who gambled away everything she had, lost her job and family, entered gambling rehab, and still got a credit-line on which she borrowed another $50,000. (She lost that, too.) Stories of gambling addiction would curl your hair. It has afflicted people in my own extended family. I hate it.

Well, if gambling is bad, but we can't effectively prohibit it, what can we do? If I knew The Answer, I'd run for president. I do have some suggestions, however.

[1] Control. Gambling must be legal, but controlled as tobacco and alcohol (and their advertising) are controlled - only better. America's unique flaw is trying to ban whatever we think is bad. But when we realize a thing can't be outlawed, we try to convince ourselves that it's good. After the Volstead Act flopped we saw that booze couldn't be banned. But if it was legal, we had to believe it was "good". So we filled the glasses and ignored educating children about problem-drinking. 1930s and ‘40s movies showed high-society people swilling booze like water. They carried hip-flasks. They drank in the car. They drank whenever they came indoors. Today, alcohol-abuse costs the nation $250 billion a year, but we have "moved on" to other concerns. We're after tobacco now. It's still legal, but we think it's "bad". Naturally, we're moving toward banning it. Taxes of $50 a carton in some places have already created a black market. When we finally ban it we'll be in the same soup as with drugs and (formerly) alcohol. We're not learning anything here. Somehow, we have to develop the political sophistication to let an undesirable practice or commodity remain legal, while we exert meaningful control over it. This will remove the motivation for illegal traffic, but will minimize the harm to society.

[2] Details. With most problems, the Devil is in the details. Gambling's Devilish details are in its devices. They must be controlled by parties as close to incorruptible as possible. No gaming device should ever be furnished or controlled by the "house". At a minimum, government must take over all quality control. It does this with foods and legal drugs. Certainly it can do so with gaming devices. Devices must be tamper-proof. Every gambler should be able to see the state's "license" decal on any device. Use of an unlicensed device should be punished severely.

[3] The Internet. Of course, quality control of Internet Gambling is impossible. I think gambling is crazy by definition, but Internet gamblers are a special kind of nut. Who knows if the Internet gambling "device" you are accessing is honest, what its odds are, or who controls it? Is there a device at all? Politicians are finally tumbling to the fact that computerized voting presents huge opportunities for fraud. This goes double for Internet gambling. I'm reluctant to say it should be "prohibited", since I just finished arguing against prohibition, but I do believe Internet gambling must be cut off at the source. Restriction of credit instruments looks like a way to do it.

[4] Advertising. Decades ago we decided that cigarettes and hard liquor should not be advertised on television because of the harmful effect on children. We also banned depiction of actual drinking in wine and beer ads. If we can do that, we can certainly ban televised gambling. It conveys an unwholesome message, suggesting to children that they could be one of those dudes betting (and winning) the big money. Who knows how many bankrolls those guys have lost, and who staked them to that money? Who even knows if those "matches" are real? They might just be actors from Central Casting playing a role. TV gambling is like those ads where cars weave past each other at amazing speeds, in close formation. It is a virtual reality. They might have been going 15 mph in reality, or they might only be computer-generated images.

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I don't want to see the lure of the Big Score supplant the true American Dream of skills, hard work, success, and financial independence. It we let it, gambling will ruin us as a nation. We can stop it only at the individual level.

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(1) Casino-legal states (including those with riverboats and Indian-run casinos only) are: Arizona, California, Colorado, Connecticut, Delaware, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Rhode Island.

(2) Slot-machine states are: Delaware, Iowa, Maine, New York, Oregon, Oklahoma, Rhode Island, South Dakota and West Virginia.

(3) "Render therefore unto Caesar the things which are Caesar's; and unto God the things that are God's." (Matthew 22:21, KJV)