GSN Ex. 1004
`GSN v. Bally Gaming
`U.S. Patent 5,816,918
`
`

`
`

`
`
`
`
`
`(Li}aTar11T[>>]li1r11g<3;
`W2
`
`

`
`Gambling and
`the Law
`
`

`
`Gambling and
`the Law
`
`
`
`by I. Nelson Rose
`Professor of Law
`
`Published by Gambling Times Incorporated
`1018 N. Cole Ave-., Hollywood, California 90038
`
`
`Distributed nationally by Lyle Stuart, Inc.
`120 Enterprise Ave. , Secaucus, New Jersey 07094
`
`iii
`
`

`
`Copyright (c) 1936 by Gambling Times Incorporated
`
`All rights reserved. No part of this publication
`may be reproduced or transmitted in any form.
`or by any means, electronic or mechanical, including, but
`not limited to, photocopy, recording, or
`any information storage and retrieval system without
`written permission from the publisher.
`
`Requests for permission to make
`copies of any part of the
`work should be mailed to: Permissions
`
`Department. Gambling Times Incorporated,
`1018 N. Cole, Hollywood, California 90038
`
`ISBN O-89746-O66-9
`
`First Edition
`
`Printed in the United States of America
`
`iv
`
`

`
`Dedication
`
`This book is dedicated to my wzfie, Andree.
`With your love and support anything is possible.
`
`

`
`Note
`
`While the author is a professor of law and an attorney licensed to
`practice in California and Hawaii, it is understood that the publisher
`is not engaged in rendering legal service. This book is designed to pro-
`vide accurate and authoritative information on the gambling laws of
`the United States. However, neither the author nor the publisher can
`be held responsible for any errors of fact or law. This book is not a
`substitute for analysis of the reader's particular problem by a trained
`practitioner. If legal advice or other expert assistance is required, the
`service of a competent lawyer should be sought.
`Adapted from :1 Declaration of Principles jointly
`adopted by a Committee of the American Bar
`Associatian and at Committee of Publishers.
`
`vii
`
`

`
`Contents
`
`Acknowledgement/xi
`
`Introductionfxiii
`
`CHAPTER ONE
`
`The Spread of Legalized Gambling/1
`
`CHAPTER Two
`
`Where Does the Law Come From/22
`
`CHAPTER THREE
`
`Hold ’em Poker in Californiaf33
`
`CHAPTER FOUR
`
`The Federal Law of Gambling/43
`
`CHAPTER FIVE
`
`Legal Gambling’s Right to Advertise/55
`
`CHAPTER SIX
`
`The Common Law of Gamblingf68
`
`CHAPTER SEVEN
`
`Slot Machines, Video Poker and Video Lotteries vs the Law{83
`
`CHAPTER EIGHT
`
`How to Find the Law/96
`
`ix
`
`

`
`CHAPTER NINE
`
`Gambling and Taxesr‘109
`
`CHAPTER TEN
`
`‘Taking Gambling Losses and Expenses off Your Taxes/124
`
`CHAPTER ELEVEN
`
`Gambling Debts and the Lawfl-42
`
`CHAPTER TWELVE
`
`Collecting Gambling_Debts Across State Lines/155
`
`CHAPTER THIRTEEN
`
`Gambling and the Criminal Law/167
`
`CHAPTER FOURTEEN
`
`Licensing—the Other Side of the Tables/178
`
`CHAPTER FIFTEEN
`
`Regulating Card Counters/194
`
`CHAPTER SIXTEEN
`
`Current Issues in Gambling Laws!207
`
`CHAPTER SEVENTEEN
`
`New Currency Reporting Regulations/22]
`
`CHAPTER EIGHTEEN
`
`Conclusion/243
`
`Notes/245
`
`Cases/272
`
`Resources/289
`x
`
`

`
`Acknowledgements
`
`I would like to thank the many individuals and institutions that helped make this
`book possible.
`My research assistants, Beverly Stane, Patricia Kozlowski, and Christine J. Wilson,
`law students at Whittier College School of Law, helped me find the cases and statutes
`that make up the body of gambling law.
`My colleagues and the staff at Whittier College School of law were most helpful
`in supporting my work and in aiding me in completing this massive project. I would
`particularly like to thank Dean John Fitzkandolph for recognizing that the law of
`gambling can merit serious academic study. Professor J. Denny Haythorn for putting
`together a law library and the research tools necessary for this study, Professor David
`Welkowitz for his assistance on legal gambling and the commercial free speech doc-
`trine, and Professor Richard Gruner for his work on constitutional issues relating
`to corporate casino licenses. I would also like to thank my students, who always in-
`spire me with their new ideas and interest.
`Gambling Times has worked with me from the start in conceiving this project and
`putting the final product together. Some of the ideas in this book first appeared in
`my column, “Gambling and the law,” in Gambling Times Magazine. I would par-
`ticularly like to thank my publisher, Stanley Sludikoff; my editor, Len Miller; and
`the assistant editors who worked so hard putting together a monthly magazine.
`I drew upon conversations with and readings from a number of experts in academia
`who have studied gambling. Proliessor William Eadington of the University of Nevada,
`Reno. has spent years studying this field and has almost single handedly made the
`field a respectable area for academic research. Professors William Thompson of the
`University of Nevada, Las Vegas, and John Dombrink of the University of Califor-
`nia, Irvine, have brought new insights into the spread of legalized gambling. Eugene
`Christiansen offers the unique perspective of an academic study coupled with real
`world experience from his position with New York City's Off—Track-Betting Corpora-
`tion. I would also like to thank Professor James Smith, Pennsylvania State Universi-
`ty; Professor Tom Hammer, Glassboro State College; Professor Jack Samuels,
`Montclair State College; Professor Tom Harris, University of Nevada, Reno, for taking
`the time to discuss ideas with me, many of which ended up in this book.
`I have also relied heavily upon my discussions and the works of experts from out-
`side academia; the real world. Howard Schwartz, who runs the Gamblers Book Club‘
`in Las Vegas, knows more about gambling literature than anyone else alive. James
`E. Ritchie, practicing law in Washington D.C., was Executive Director of the Com-
`mission on the Review of the National Policy Toward Gambling, and is still one of
`the leading gaming lawyers in the country. Rufus King, also of Washington D.C.,
`informs me that he is semi-retired, but he remains the nation’s leading legal expert
`on amusement and gambling devices. Wilbur Duberstein, of San Ramon, Califor-
`nia, is General Counsel to the California Card Club Owners Association and is one
`XI
`
`

`
`of the few practicing lawyers who understands how gambling law works in theory
`and practice. I would also like to thank George Hardie of the Bicycle Club in Bell
`Gardens for his continued interest in legal gaming’s rights under the law.
`Vernon G. Kite, Jr., of Harrah’s Atlantic City, sent me copies of his graphs il~
`lnstrating the growth of legal gambling, which are included in Chapter One. West
`Publishing Company gave me permission to reproduce the case in Chapter Twelve,
`Dontzdo Beach Hotel Corp. v. Jemigan, 202 So.2d 830, with their copyright.
`Most of all I want to thank my wife Andree who helped me literally put together
`my manuscript, and who was always there to support me through the bad times as
`well as the good.
`
`Professor 1. Nelson Rose
`
`xii
`
`

`
`Introduction
`
`This book is unique in many ways, and one of the most surprising things about
`it is that it should be unique. By the most conservative estimates, gambling in the
`United States is a one hundred billion dollar a year business. The total amount bet
`at legal games alone exceeds $147 billion; and the amount bet at illegal gambling
`is almost impossible to estimate.
`
`Yet, there has never been a book on gambling and the law for the player; or, for
`the casino, racetrack owner, or even lawyer, for that matter. There are a few scattered
`articles. usually of a highly academic nature for specialists, but nothing that will help
`the casual or serious player, on either side of the tables, in coping with the law.
`
`This book is designed to help you cope with the law.
`
`And you must be concerned with the law, even if you only place one bet a year.
`The law is involved in every aspect of gambling, and the consequences for the un-
`wise or the unwary can be drastic. The legal gambling industry is subjected to regula-
`tion and government scrutiny that is as tough as that given any other business in the
`country, including the building of atomic reactors and safety inspections on airlines.
`A single mistake could mean the loss of a license worth hundreds of millions of dollars.
`
`The illegal gambling industry is obviously subjected to as much scrutiny as law
`enforcement can muster; and a mistake here on the part of the operator means a fine
`or jail, possibly for a very long time.
`
`In between the legal and the illegal industries there are all the rest of us; and ig-
`norance of the law by even the most infrequent player can mean a loss of money,
`time, and possible criminal sanctions. including a fine and jail sentence, not to men-
`tion public embarrassment.
`
`Tens of thousands of people are involved directly with gambling on a regular basis.
`Legal gambling includes not only multi-million dollar casinos with thousands of
`employees ranging from the casino manager, through the dealers and bartenders, to
`the janitors and gardeners. There are other legal establishments that everyone
`recognizes as gambling: horse and dog racing tracks, jai alai frontons, legal card
`XIII
`
`

`
`clubs, and lotteries have become essential parts of the economy for many cities and
`states. But there are other forms of legal gambling that may not be thought of as
`gambling: the church or charity that depends on bingo revenue may not like to think
`that it is rtmning exactly the same type of game as a casino, but it is; mail order
`sweepstakes (“You may already be a winner”) and fast food chains with rub—off cards
`for instant winners do not like to be told that their advertising gimmicks are identical
`in the eyes of the law to a slot machine, but they are; the insurance industry and
`commodity traders do not like to be reminded that their businesses were outlawed
`until very recently (and in some cases are still illegal) as forms of sinful gambling.
`The law is also important in legal gambling to the player who wants to know if
`he can stop payment on the check he wrote the casino, to the lottery ticket winner
`who does not want to give all of his winnings back in the form of taxes, to the in-
`vestor who wants to know if gambling stocks are riskier than other business ven-
`tures. If the casino or bingo hall refuses to pay, can you collect? Can you take your
`travel expenses off your taxes if you count cards? Can you even count cards, or can
`the casino legally bar you from playing?
`Illegal gambling involves much greater numbers of people than its legal counter-
`part, and probably much more money. There are full—time bookies (sports and far
`off the track betting) and numbers runners (illegal lotteries that still flourish in the
`ghettos and barrios), and the police and prosecutors who try to control them. But
`there are also part—time operators who run sports cards or occasional poker or craps
`games, from the office pool during the Super Bowl to the hotel room floating craps
`game. And there are the bettors. If you are caught’ in a raid can you get off by pleading
`you were only a player? Can you get back your money‘? Are you facing a
`misderneanor—a fine and a night in jail—or can they make it, literal ly, into a federal
`offense? What should you do?
`In between the legal and the illegal are tens of millions of players who are involved
`with the law on a regular basis, and may not even know it, until it is too late. Do
`you have a regular Tuesday night poker game at your place? And does the game have
`a regular kitty, each player chipping in money for refreshments and maybe something
`for the house? Do you accept personal checks when a player is short? If the check
`bounces can you collect? If you are arrested can you say this was only a social game?
`Can you afford a lawyer or 30 days in jail? What should you do?
`Does the neighborhood bar have a video poker machine? Does the bartender pay
`off jackpots in cash? If the bar is raided will the bartender lose his license? Will
`he go to jail? Will you? What should you do?
`This book is designed to help answer these questions, and others that you may
`not even have thought to ask until you find yourself in a lawsuit. By reading about
`the way the law affects gambling and gamblers, particularly gamblers who have get-
`ten in trouble, you should, with any luck, be able to avoid lawsuits and lawyers.
`Ill-’
`
`

`
`In it you will. find information on the following:
`0 How to take gambling losses off your taxes.
`I How to collect on gambling debts.
`0 What to do if you feel you have been cheated.
`0 How to tell if what you are doing is legal.
`* What to do if you are arrested.
`0 Your rights in a casino, to count cards at blackjack, to stop payment on your
`checks, to avoid being blacklisted.
`I How to get a license, and finding out when you need one.
`I How to make gambling legal where you live.
`I will use actual cases to show you how the law works, and what the gambler must
`know to come out ahead. We'll discuss some history and background, because, unless
`we know where we came from we will not be able to tell where we are going. But
`the main focus will be on explaining what is going on in gambling law today in the
`United States, with concrete examples and practical recommendations.
`Although most gamblers are male, I realize that there are millions of women who
`play occasionally or regularly, or whose jobs depend on gambling, or who are mar-
`ried to gamblers. All of these women should be concerned about gambling law. For
`the sake of convenience I will refer to a gambler as a “he” rather than use some
`grammatically awkward form like “hefshe” or “when he or she plays his or her cards
`
`First, however, a word on what this book is not: It is not legal advice. Although
`I have tried to make this book both informative and interesting, it is not designed
`to take the place of a lawyer.
`IF YOUR MONEY OR FREEDOM IS AT STAKE YOU MUST IMMEDIATE-
`LY CONSULT AN ATTORNEY.
`
`Please reread the two paragraphs above this one. These statements are there for
`many good reasons, not the least of which is that I do not intend to be sued by anyone
`who thinks they can rely on this book instead of going to a lawyer. Only a lawyer
`can help you with your problem. Every state, city and county has its own law, and
`I cannot tell you what the law is where you live. Every legal situation involves a
`unique set of facts, and it is possible for one minor fact to make the difference be-
`tween collecting and not collecting your money, or between being found guilty or
`innocent of a crime.
`
`I am an experienced attorney and a professor of law. However, I cannot, by law,
`give legal advice through this book. Even if the law allowed me to give you advice
`I would not do it without knowing the facts of your particular situation and the law
`of your state at this particular time. The law changes slowly, but it does change; twenty-
`five years ago there was not a single legal lottery in the United States, today it is
`almost impossible to find a state outside the South and Midwest that does not have
`xv
`
`

`
`a state lottery. Three years ago a Las Vegas casino could not sue you, even in a Nevada
`court, if you refused to pay a gambling debt; today the casinos definitely have the
`right to sue, at least in their home courts.
`And the gambling laws vary from one location to another to a greater extent than
`in any other field of law. Unless you live in Nevada, Atlantic City, Puerto Rico. or
`some of the provinces of Canada you will not see legal casinos in your city. The
`variations do not even have to be from state to state; you can play draw poker legally
`in a licensed card club in Gardena or Bell Gardens, cross the city line into Los Angeles
`and the same game will send you to jail for up to one year.
`You must speak to an attorney who can find out what the law is in yourjurisdiction
`and who can ask you questions about your particular situation. And you must go
`immediately to a lawyer because you may lose all of your rights if you fail to act in time.
`Since this book is not designed to be a legal treatise I have eliminated footnotes
`and most citations from the text. l have included citations only after direct quota-
`tions, or when necessary to avoid confusion. The section entitled “Notes" that ap-
`pears toward the end of the book contains detailed citations for the other cases and
`statutes mentioned in the text, as well as references to additional outside research
`material. The Notes section also contains some miscellaneous comments that I con-
`sidered too dry, academic, and peripheral to include in the main text.
`It is always a difficult choice for the writer to decide whether some bit of informa-
`tion or insightful comment is important enough to include in the main text, or not
`that important but still worthy of inclusion in the notes, or not important at all. It
`is even more difficult for the reader to decide what to do about the collection of
`possibly important comments lurking in the notes: should you read the entire chapter
`and then the notes. or should you read a paragraph or sentence at a time, flipping
`back and forth from text to notes to make sure you do not miss any words of wisdom?
`My personal preference is to read the entire chapter and then the notes. but feel free
`to flip back and forth.
`The reader who is interested in following up on a particular topic should start with
`the Notes section that corresponds to that chapter in the text. I suggest that anyone
`interested in doing their own additional research read through the entire book first,
`particularly the various sections in the back. You should be warned, however, that,
`except for the legal references, much of the material cited is extremely difficult to find.
`I have also included another section that I think will be of general interest to anyone
`reading this book, but, will be of special interest to the reader who wants more on
`any particular subject in the field of gambling law. The section is entitled “Cases"
`and consists of capsuled summaries of most of leading gambling cases, including
`citations. Virtually every one of these cases can be found in any law library. The
`system of citations is briefly explained in Chapter Eight, so that you do not need
`to be a lawyer to find and read any case of interest to you.
`xvi
`
`

`
`For the reader who wants more information in general, I have included a large
`number of important reference works relating to gambling in a section entitled
`“Resources." It is with finding these works that the researcher will have the most
`difficulty, simply because it is almost impossible to find all of these works in one
`place, outside of the University of Nevada at Las Vegas, the Library of Congress
`in Washington D.C. , and the author’s private library. Many of these works, including
`the government publications. are out—of-print, and thus unavailable, even from the
`publishers.
`When I first started studying the law of gambling in 1975 I was able to read literal-
`ly everything that had ever been published on the subject. This was truly unique,
`in no other field of law was it. possible to read all the literature available; imagine
`trying to read everything ever written on the death penalty, let alone on the crime
`of murder.
`
`Today, however, the "situation has changed. Gambling has not only become big
`business but the study of the impact of gambling has become a respectable topic for
`study by sociologists, psychologists and even law professors. The popular press has
`also discovered gambling; Gambling Times Magazine has a readership in the hun~
`dreds of thousands. I now find it difficult to keep up with the current periodicals
`and professional papers discussing gambling in America.
`Although I have tried to be complete in my survey of the literature, it is possible
`that an important work may have been accidentally omitted. To my colleagues and
`those who have gone before I apologize in advance for any such accidental oversight;
`no slight is intended.
`I welcome any comments or suggestions for material to include in future editions
`of this work.
`
`Finally, it should be clear that the conclusions and legal analyses drawn in this
`book are entirely my own. Other experts may disagree with my interpretations. Gam-
`bling is as old as man, yet has only been subjected to serious study in the last few
`years. I cannot pretend to give the final word on this complex legal. economic, social
`and psychological phenomenon. If I shed a little light on the subject this book will
`be a success.
`
`Professor I. Nelson Rose
`Whittier College School of Law
`Los Angetes, Cahfomia, 1986
`
`xvii‘
`
`

`
`The Spread of
`Legalized Gambling
`
`A third wave of legalized gambling is sweeping the nation. Like dominoes, state
`after state is turning to legal gambling as a source of revenue. Other states are loosening
`their laws to allow social games to be played without fear of criminal penalties. Bingo
`and card rooms are booming and video lotteries and poker machines are being placed
`in bars throughout the country. Each year the voters are asked to decide whether
`lotteries, race tracks and even casinos should be allowed in their locales. Public opin—
`"ion polls show a landslide in favor of more legal gambling.
`This is not the first time gambling fever has swept the nation. The first wave of
`legal gambling started during the colonial period and did not die out until the decades
`immediately prior to the Civil War. The colonies were financed in major part by
`public lotteries, and such notables as George Washington, Benjamin Franklin and
`Thomas Jefferson sponsored private lotteries. Even such a prestigious institution as
`Harvard University received considerable funding from lotteries in its early days.
`The second wave of legal gambling started with the Civil War. The South had been
`devastated by the war and looked upon gambling, and in particular lotteries, as a
`painless way to raise needed funds.
`Unfortunately, the second wave broke in scandal after scandal; the largest and most
`notorious being the Louisiana Lottery scandal of the 18905. The blatant attempt by
`the promoters of the Louisiana Lottery, a privately owned company, to buy the
`Louisiana state Legislature resulted in the imposition of stiff federal laws and state
`constitutional restrictions.
`
`We are still paying today for those scandals of a hundred years ago. The federal
`government still has a law on its books prohibiting almost all advertising of lotteries,
`which the Federal Communications Commissions uses to keep legal casinos and bingo
`games off of radio and television. Voters in the 18003 were so opposed to legal gam-
`bling that they not only passed laws prohibiting the games, they also tried to nail
`1
`
`

`
`Gambling and the Law
`
`the prohibitions down by including anti—gambling language in their state constitu-
`tions. When the third wave of legalization began in 1960 it was often necessary to
`amend the state constitutions, a difficult task, to remove language such as Califor-
`nia's “The Legislature has no power to authorize lotteries and shall prohibit the sale
`of lottery tickets in the State." Calif. Const. Art. IV, Section l9(a).
`The third wave started in 1964 with the New Hampshire Sweepstakes. It is hard
`to believe today that less than 25 years ago there was not a single legal lottery anywhere
`in this country. New Hampshire opened the doors with the first state lottery of this
`century. It was followed in a few years by New York and New Jersey, and then a
`tidal wave of other states.
`Today more than 20 states and the District of Columbia run state lotteries. The
`games vary from once a week drawings to daily numbers games to instant winners.
`In 1984 the voters of four more states voted to join the wave: California, Missouri.
`Oregon and West Virginia, and the Iowa legislature added yet another new state to
`the list in 1985.
`The latest thing in lotteries is the video lottery machine. Nebraska and Illinois are
`experimenting with putting the machines in public areas. and other states are carefully
`watching the results. The typical video lottery is simply a sophisticated slot machine:
`a player puts his money into the machine and the results are determined by chance.
`Some of these machines allow the players to play a game. but the outcome is not
`within the player’s control. Cash prizes of up to $600 can be paid by the bartender
`or other proprietor on the spot; larger prizes are paid by the state lottery commission.
`Video lotteries are not the only recent technological breakthrough in legal gam-
`bling. Video poker machines can be found from Massachusetts to Hawaii and are
`subject to constant legal challenge from the police. Video blackjack machines have
`forced the highest courts of many states to try and determine what makes a device,
`like Space Invaders, acceptable while similar electronic games smack of illicit gam-
`bling.
`The third wave of legal gambling has swept in the charities, and in one unusual
`development. the Indian tribes. Bingo is a multi-hundred million dollar a year business.
`State legislatures meant to protect their local charities from being busted; so they
`made playing of bingo and similar games legal, if the money goes to a charitable
`organization. The legislators underestimated the inventiveness of the gambling
`operators, and the extent of the population's desire to gamble. The days of the little
`church basement bingo games are long gone. Today there are cavernous casinos, called
`bingo halls, where the operators and players stay the same, but the charities rotate.
`The new concept of rotating charities is used with other games. The province of
`Alberta, Canada, has full-fledged casinos playing $1 to $25 blackjack. North Dakota
`has $2 blackjack. And New York has wide—open “Las Vegas Nights.“ with all the
`profit going to various rotating charities.
`2
`
`

`
`The Spread of Legalized Gambling
`
`The Indian tribes found that they did not have to rotate charities as an excuse from
`wide—open gambling; the tribe is its own charity. Two federal courts of appeals have
`ruled that a state can make a game illegal and therefore playing the game is a criminal
`violation both on and off the Indian reservation. However, once the game is made
`legal the state government has no power to tell the Indian tribes what they cannot
`do on their own land. Thus was born Indian Bingo—Indian tribes are opening giant
`bingo halls offering prizes worth thousands of dollars, and are completely beyond
`the control of the states.
`
`The third wave of legalized gambling includes the tracks. The tracks can be seen
`as a separate mini—wave that has followed the same patterns and preceded the recent
`big third wave. At the beginning of this century racing and bookmaking had been
`outlawed everywhere, except Maryland, Kentucky and New York. But the Depres-
`sion of the 19305,
`like the Civil War 70 years earlier, forced the states to look to
`means other than taxes to raise desperately needed revenue. As noted expert Rufus
`King put it, “[l]n the period between 1930 and 1940,
`the number of states with
`regulated tracks jumped to eighteen, and in the following decade, to twenty—five.''
`Missouri voted in 1984 to join the parimutuel crowd. A large majority of the states
`allow betting on races. Betting on horses at the track is now allowed in 36 states
`and betting on the dogs is legal in 15 states. One of the indications of the spreading
`wave is the drive for off—track betting (OFB). Twenty-two states now allow OTB, with
`New York leading the way into a -billion dollar market.
`
`Jai alai, the fast—action Basque game similar to handball, spread from Florida to
`Connecticut, Delaware, Rhode Island and Nevada. The MGM Grand in Las Vegas
`recently closed its fronton and scandals in other states have hit the game fairly hard.
`Jai alai promoters have had a hard time convincing the public that human jai alai
`players are as uncorruptable as horses; although, they have succeeded in having jai
`alai exempt from the laws prohibiting sports betting. In jai alai the bets are placed
`in a parimutuel pool, like at the track, and are not bet against a bookie, like most
`sports betting.
`
`The most recent developments in the third wave have been state lotteries. video
`machines, commercial sweepstakes, gambling tournaments, charity and Indian bingo,
`and the rapid growth of legal card rooms, particularly poker.
`Nine states allow legal, commercial card rooms, and the game of poker has seen
`such interesting developments in recent years as tournament plays, including the na-
`tionally televised World Series of Poker, played with the relatively new game of Texas
`Hold ‘Em. The game of poker has come out of the smoke—filled shadows of the back-
`room bar to the light of modern. beautiful casinos, featuring professional dealers
`and gourmet restaurants. The largest card casino in the world, 80,000 square feet
`and 120 tables, opened in l984—not in Las Vegas or Atlantic City. The casino is
`3
`
`

`
`Gambling and the Law
`
`the Bicycle Club, located in the small city of Bell Gardens, a suburb of Los Angeles.
`And the only games played are draw poker. low ball, pan, and pai gow.
`Casinos offering the full range of gambling games have come to three jurisdic-
`tions: Nevada, Puerto Rico and Atlantic City. New Jersey. Even here growth has
`not been universal. Atlantic City does not allow poker or keno and Nevada does not
`have a state lottery.
`A number of other areas offer casi no games on an irregular basis, such as Calgary's
`blackjack tables for charity and during its July Stampede, Other jurisdictions allow
`the games if run for charities; New York state, by statute, permits charities to run
`full—scale casinos. It would be impossible to know how many illegal casino games
`take place at schools, clubs and meeting halls without police interference, although
`these games are technically illegal. There is a booming business in the rental of casino
`equipment. The companies will show a charity how to organize and promote a casino
`night, and will even train and supply dealers. But they are always careful to disclaim
`all responsibility, since it is a criminal offense to run a “Las Vegas Night“ in virtual-
`ly every jurisdiction, even if the party only offers prizes for chips won.
`Attempts to expand legal, commercial casino gambling have met strong opposi-
`tion. And yet the attempts continue,
`in Florida; Detroit; Hot Springs, Arkansas;
`Pueblo, Colorado and elsewhere.
`
`Professors William Thompson of the University of Nevada, Las Vegas and John
`Dombrinlt of the University of California, Irvine have studied the fitful nature in
`which the third wave of legalized gambling has spread across the country. Their con-
`clusion is that some forms, such as lotteries, conform to a “gravity model:" arguments
`pro and con are weighed and the public decides whether it wants to legalize or not.
`Other forms, such as casinos, conform more closely to a “veto model:“ one major
`political actor or serious argument raised against the issue will prevent legalization.
`Their analysis has great force; in California the Governor and Attorney General came
`out against the state lottery and the racetrack industry poured in millions of dollars
`to defeat the initiative; yet, the lottery initiative passed by an overwhelming margin.
`In other states attempts to legalize casinos have been stopped by the mere threat of
`opposition from the Governor.
`One area of expansion has run into a brick wall: sports betting. Even more than
`casinos, the drive for legal sports betting has been fought hard by both sides. Only
`Nevada allows sports betting, yet even the most conservative estimates put the total
`amount bet on sports, illegally, in the tens of billions of dollars, many times greater
`than all the state lotteries combined. The pressure to make sports betting legal comes
`from bettors and legislators in virtually every jurisdiction. The pressure against sports
`betting comes from the groups that are traditionally opposed to all forms of betting:
`organized religion and rival gambling businesses, most notably the race tracks. These
`groups have been unsuccessful in preventing the spread of lotteries, yet they have
`4
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`The Spread of Legalized Gambling
`
`been almost universally successful in preventing legal sports betting. The difference
`lies in the addition of a most powerful ally, the sports organizations themselves.
`Professional and college level sports figures are unanimously opposed to allowing
`bets on their games. The legal questions of whether they can control betting, through
`restrictions on the use of team names, is secondary to the political weight they carry.
`Practically no one would attend a horse race if betting were prohibited, so the tracks
`push for more betting, even OTB, so long as they get a share. More people pay to
`attend horse races than baseball games. But baseball, basketball and football are sur-
`viving without legal betting. And the owners and players do not feel it is necessary,
`yet, to face the additional regula