Americans have always been prone to sports betting. From its foundation to the modern period, the betting industry has attracted countless sports lovers and enthusiasts. This, in turn, stirred many disputes between the industry and the U.S. government. In this article, we’re going to take a look at how earlier governments regulated sports betting.
Early years of the U.S.
The Revolutionary War was a key moment that decided the fate of the United States of America. It is surprising to know that it was actually funded in part through the lottery taxes and government-sanctioned lotteries. At some point, the original 13 states realized, they needed more money for their battle against the British Empire, so they voted a $10 million lottery to finance the war.
Sports gambling became even more popular in the 19th century. The main industry that incorporated betting was horse riding, but soon the games like dices, cards, and slots emerged and gained popularity among players.
But as soon as these games emerged, the uneasiness started to grow. There were scandals and concerns associated with the social damages of gambling. And there was the 1919 Black Sox Scandal, in which eight members of the Chicago White Sox intentionally lost the World Series against the Cincinnati Reds in exchange for $10,000. This became a decisive moment when, knowing its full potential, states began banning various forms of betting.
The fallout from this incident resulted in appointing Judge Kenesaw Mountain Landis as the first baseball commissioner. He was granted absolute control over the sports in order to restore the public confidence in baseball and the integrity of the game. Landis held the position until his death in 1944 and during this time he established the main template for future commissioners.
First came the moral rejection and aversion of gambling. But soon illegal sports betting tipped the scale to which governments responded with anti-gambling legislation. Sports betting was driven further underground, that’s why the legislators realized that an outright banning was not possible. The cycle finished by the general acceptance from the public.
20th century
All the hype of Las Vegas and its glory started in 1949 when the state of Nevada legalized sports betting in order to revive its tourism industry. The post-WWII economic boom gave the state an opportunity to open its gambling market and increase the revenues.
At first, the federal government imposed a 10% tax on all sports bet. The tax rate was so high that many players had to leave the industry altogether. For this reason, Congress reduced the tax rate down to 2% in 1974, which revived Las Vegas betting and increased the tax revenues for the government.
However, according to this list here, several sports bookies managed to flee to the central United States, where local governments were much more forgiving. Several years later in the early 2000s, they transitioned into online versions of themselves in order to avoid the remnants of criminal casino influence.
Outside of Nevada, the industry was pretty much in hands of the organized crime. In an attempt to dismantle its grip on sports betting, Robert F. Kennedy devised a plan to enact various legislations aimed at giving government more regulative power. The laws enacted in the ‘60s and ‘70s banned the transmission of information which helped to place bets on any sporting event, distribution of proceeds of unlawful activities through the mail, and other crime-related elements.
Nevertheless, the illegal betting persisted in the late 20th century. At that time the U.S. government decided to loosen its grip on the industry, acknowledging that gambling is inevitable and is being practiced by a substantial majority of Americans. However, the existing laws remained on the books and the addition of some notable scandals created momentum for reinvigorated legislative processes.
