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Gambling is legally restricted in the US, though its availability and participation is increasing. Gambling generated gross revenue of around $92.27 billion in the US in 2008. The American Gaming Association stated that gaming in the US is a $240 billion industry. The industry has employed about 1.7 million people in 40 states. And in 2016, taxes from gambling winnings contributed approximately $8.85 billion in state and local tax revenues.

Gambling was brought into the US by immigrants from Europe, China, and other parts of the world. Immigrants essentially adopted two stances towards gaming in the US. Some advocated the outright prohibition whereas those of the English and Chinese origin took a more liberal view. However, in the general societies, gambling was an accepted and widespread activity.

Though gambling was blamed for causing a problem in some of the early colonies, it was however used by some communities to raise money. This wave lasted in the US until the early 1800s, when it came under increasing attack from groups who opposed it.

The second wave saw the resurgence and establishments of gambling. It started from the mid-1800s and lasted till the early 1900s. However, public opinions and the establishment quickly turned against gambling and gamblers again, and soon it was banned in all the states in the US where it was fashionable. Though, this action only drove gambling underground as people developed newer ways to evade the various laws that restricted gambling games. As these laws were targeted the professional gambler more than gambling itself, and also a general attempt to make people understand the different ill effects of gambling. Hence, these laws were weak and not enforced properly. Nevertheless, in the 1900s, there was the enactment of more stringent laws strictly enforced by authorities. Severe penalties were introduced both for operating and playing gambling games. It, therefore, became complicated for people to associate themselves with gambling or gamblers.

There was a gradual resurgence of gambling in the US by the 1930s, and gambling establishments began to emerge again. The third wave of gambling, which was stronger than the earlier eras, covers the period from the 1930s to the current time. Gambling was legalized in the state of Nevada in 1931. The economic depression also created a general atmosphere that tolerated legalised gambling, as this was perceived by many as a way of reviving the economy. Gradually, gambling, lotteries, and some types of pari-mutuel betting were legalized in other areas of the country. However, there was a clampdown on illegal gambling, which was on the increase. From this period onwards, there has been a slow but steady process of consolidation for the gambling industry, which took gambling to dizzying heights. For example, the US realised above $30 billion revenue from gaming during the year 2005.

The dawn of the internet caused a considerable upsurge in gambling. Online gambling became become very popular across the world, but online gambling was banned in the US. On the 13th of October, 2006, the Unlawful Internet Gambling Enforcement Act of 2006 was passed, which prohibited American financial institutions from processing most transactions with online gambling operators. However, in 2011, the Court of Appeals ruled that the UIGEA of 2006 was based on the Federal Wire Act of 1961 and should have only applied to online sports betting. More so, the Department of Justice ruled that whether or not online gambling should be legal was a matter for the individual states, and not for the federal government to decide. Hence, legislation that allowed state-run online gambling was passed.

In 2012, Delaware subsequently became the first state to legalise online gambling, passing the Delaware Gaming Competitiveness Act. In 2013, Nevada became the second state to legalise online gambling and authorised the issue of online poker licenses. Ultimate Poker, the first legal online gambling site in the United States went live in Nevada. Within a week, New Jersey became the third state to legalise online gambling and authorised the issue of online poker and online casino licenses to gaming establishments in Atlantic City.

In 2017, Pennsylvania became the fourth and largest state to pass legislation regulating online gambling. However, offline gambling is legal and continues to remain popular as ever, with casinos doing their business.

In 2018, the Supreme Court overturned the 1992 prohibition against sports gambling; this paved the way for legalisation of sports gambling. However, internet/online gambling remains illegal in the US except in Nevada, Delaware, New Jersey, and Pennsylvania. And an interstate gambling transaction also exists between Nevada and Delaware.

In almost every land-based casino that exists in the US, the number one rule is that you must be 21 old minimum to be eligible to gamble with real money. In cities like Las Vegas and Atlantic City, this is a routine practice and one that has been adopted in other areas nationwide where land-based gambling is legal. It must be noted that certain parts of the US permit gambling at the age of 18, but places that require a 21-minimum age far outnumber these.

The US government has mostly deferred to the states all matters relating to gambling. Each state has the right to authorise or prohibit the practice within their borders. Hence each state has its own regulatory agencies that oversee the gaming industry. However, the US Congress holds the responsibility for formulating and enacting federal laws that affect the gaming industry.

Winnings from gambling are considered taxable in the US, either offline or online, even if you are not a citizen. The lucky aspect of it is that unlike income taxes, taxes on winnings are not progressive, either you win $10,000 or $1,000,000, as long as it got to the threshold, you would have to pay 25 percent of the winnings to the IRS.

However, every state has its different tax laws for gambling in addition to the federal tax requirements. Hence, it is advisable for stateside gamblers to check the land-based gambling specific requirements of the state that they are in.

All winnings from gambling must be reported because they all contribute to your total income tax; however, winnings of the following amounts must be reported separately on an IRS Form W2-G:

  1. $600 or more on Horseracing, if that is 300x times your bet

  2. $1,200 or more on slots or Bingo games

  3. $1,500 or more on Keno games

  4. $5,000 or more on winnings in Poker tournaments

Though winnings from games like Baccarat, Blackjack, 21, Pai Gow, Roulette and Craps do not require Form W2-G irrespective of the amount that you win, however, you are still required to pay the 25 percent tax.

How is gambling perceived in the US?

Attitudes of authorities

Attitudes to gambling in the US varies significantly from state to state, but there are no large-scale restrictions on gambling in the US as gambling is a legally accepted practice. Early on, under the permission of the US authorities, gaming has been used to help raise revenue and is still being used to generate internal revenue. Gaming is generally acceptable and not a crime in the US, though the online gambling is not generally accepted yet within all the states.

Views of Society in general

Gambling has been taken to be a standard feature of everyday life, readily accessible in one form or another to the general society. In the culture, gambling has grown from being just an entertaining pastime to an economic mainstay.

Yes, gambling can be said to be a popular activity in the US. It is legalised in the US and has undergone a rapid expansion. Though this activity is more popular in some states in the US than others, it very much remains a popular activity throughout the US. 

Offline

Presently, offline gambling has no issue in the US, and it’s very safe. Right since 1931, when gambling was legalised in the state of Nevada and subsequently in other states. Up until now, gaming is perceived by many as a means of raising income. Gambling, lotteries and sports betting are safe in the US. However, illegal gambling is frowned upon is it is in most countries.

Online

State-run online gambling in permissible in four states, which are Nevada, Delaware, New Jersey, and Pennsylvania. Online gambling is therefore safe in these states but currently illegal elsewhere in the US.

Land-based Venues

FRENCH LICK RESORT. Located in French Lick, Indiana, the French Lick Resort features a 51,000-square-foot Vegas-style casino with 1,000 slots, 37 table games, a high-limit area and a 9,500-square-foot non-smoking gaming room with both table games and slots.

HARD ROCK HOTEL AND CASINO BILOXI.The expansive casino boasts 1,300 slots, including 500 video slots, as well as 50 table games and four poker tables.

Others include:

  • Bellagio, Las Vegas, Nevada

  • Peppermill Resort Spa and Casino, Reno, Nevada

  • Beau Rivage Resort and Casino, Biloxi, Mississippi

  • Eldorado Resort Casino, Shreveport, Louisiana

  • Foxwoods Resort Casino, Mashantucket, Connecticut

  • Horseshoe Casino Tunica, Tunica, Mississippi

  • Harrah’s Resort, Valley Center, California

  • L’Auberge Casino Resort, Lake Charles, Louisiana

  • Pechanga Resort & Casino, Temecula, California

Online Sites

Sun Palace Online Casino, Planet 7 Casino, Las Vegas USA Online Casino, Coolcat Online Casino

On a scale of 0.5 to 5.0, the US can be rated 2.5. In comparison with other nations, the US is not among the current top 10 gambling nations. The reason for this is because most states in the US takes gambling as charitable and not as commercial as in other countries. Despite the increasing familiarity of gambling, it is not regarded as merely another business, free to offer its wares to the public. Gambling is under particular scrutiny by the authorities in every jurisdiction where it exists, including even such gambling-friendly states as Neva

If you are considering where to engage in online gambling legally within the US, then you have just four options, which are Nevada, Delaware, New Jersey, and Pennsylvania.

Date Publication: Jun 07, 2018 Last Updated: Jun 07, 2022 Gamblescope Research Team