Gambling in the United States

Gambling, often referred to as "gaming", had 2005 gross revenues of $84.65 billion, and thrives in the United States despite being restricted.

Proponents of gambling in the United States say it provides valuable tax revenue and job opportunities. Commercial casinos provided over 354,000 jobs, and yearly state and local tax revenue of $5.2 billion as of 2006. Some community groups oppose gambling because they say it leads to corruption, compulsive gambling, and higher crime rates.

Authorized forms

Many levels of government have authorized multiple forms of gambling: everything from bingo games in church basements, to multi-million dollar poker tournaments. The American Gaming Association breaks gambling down into the following categories:

• Card Rooms, both public and private
• Commercial Casinos
• Charitable Games and Bingo
• Indian Casinos
• Legal Bookmaking
• Lotteries
• Pari-mutuel Wagering

Legality

Gambling is legal under US federal law, but the states are free to regulate or prohibit it. If state-run lotteries are included, almost every state can be said to allow some form of gambling. However, casino-style gambling is much less widespread.

Nevada is the only state where casino-style gambling is legal statewide, although the state and local governments both impose licensing and zoning restrictions. All other states that allow casino-style gambling restrict it to small geographic areas (e.g., Atlantic City, New Jersey or Tunica, Mississippi) or to Native American reservations (some of which are conveniently located in or near large cities). As sovereign nations, Native American tribes have used legal protection to open casinos, which has been a contentious political issue in California and other states. In some states, casinos are restricted to "riverboats", large multistory barges that more often than not are permanently moored in a body of water.

One notable exception to US policy is in the area of online gambling. The Federal Wire Act of 1961 outlawed interstate wagering on sports but did not address other forms of gambling and has been the subject of court challenges. The Unlawful Internet Gambling Enforcement Act of 2006 (part of the SAFE Port Act) did not specifically prohibit online gambling; instead, it outlawed financial transactions involving online gambling service providers. Offshore gambling providers reacted by shutting down their services for US customers.

Gambling in South Africa

History of gambling in South Africa

Most forms of gambling was banned or restricted from as early as 1673, with the Gambling Act of 1965 officially banning all forms except betting on horse racing. In the late 1970s casinos started operating in the bantustans of Bophuthatswana, Ciskei, Transkei and Venda. By 1995 an estimated 2 000 illegal casinos were believed to be operating within the country. In 1996 the National Gambling Act instituted a system of licensed casinos and a single national lottery.

Some scholars have argued that illegal gambling was at least tacitly supported by mining companies in order to keep black African workers locked in poverty and available as a cheap source of labour.

Prevalence and value

According to a 2006 study the most popular forms of gambling in South Africa were the National Lottery (86.9% participation), slots (27.7% participation), scratchcards (22.7% participation), charity jackpot competitions (11.6% participation) and horse racing betting (11.5% participation). 8.3% of respondents said they never gambled and a further 5.5% characterised themselves as occasional game players with no regular forms of gambling.

In the 2006/2007 financial year licensed gross gambling revenue as monitored by the National Gambling Board totaled R13.52 billion, from R11.4 billion the previous year. 86.2 percent of that revenue was derived in casinos. In the same period the Board reported a total of 455 raids on and closures of presumed illegal gambling operations.

Types of gambling

South African National Lottery

The South African National Lottery was established in 2000 and has been in continuous operation since, apart from a suspension between April 2007 and October 2007. In its last year of operation transaction values totaled R3.972 billion, with an average of five million transactions per week, making it the most popular form of gambling in South Africa.

Casinos:Casinos operate in all metropolitan areas in South Africa.

Horse racing

On-track betting on horse races lost its monopoly on legal South African betting in 1996 and, due to its complexity and the difficulty of developing new players, did not effectively compete with the National Lottery or casino games.

Betting on horse races is controlled by Saftote and operated by Gold Circle in KwaZulu-Natal and the Western Cape and by Phumelela in the remainder of the country.

Gambling in the United Kingdom

Gambling in the United Kingdom is regulated by the Gambling Commission on behalf of the government's Department for Culture, Media and Sport (DCMS) under the Gambling Act 2005. This Act of Parliament significantly updated the UK's gambling laws, including the introduction of a new structure of protections for children and vulnerable adults, as well as bringing the burgeoning Internet gaming sector within British regulation for the first time.

Gambling forms

Bingo and casinos

The game of Bingo was popularised in the armed forces in the Second World War and brought back to Britain after the end. The Betting and Gaming Act 1960 allowed commercial bingo halls to be set up, provided they were established as members-only clubs and had to get their take from membership fees and charges rather than as a percentage of the entry fees.

Casinos had a similar history, with requirement for licensing from the Gaming Board of Great Britain and for casinos to be members-only. The number of gaming machines in casinos was limited at 10.

In part due to the difficulty of enforcing this, the Gaming Act 1968 liberalised the law, by allowing true commercial casinos.

The 2005 Act paved the way for larger resort style casinos to be built, albeit in a controlled manner with one being built every few years until the Act is fully implemented. Many towns and cities bid to host one of these so-called "super casinos", which will be similar to those found in Las Vegas. On 30th January 2007, Manchester was announced as the winning bid and will be the location of the first 'super-casino'. The House of Lords urged on 29 March 2007 the Government to review plans for the massive "super-casino" in Manchester. Instead it supported plans for 16 smaller casinos, including ones in Solihull and Wolverhampton.

Gaming machines have two categories depending upon the stakes and payouts involved. The former were limited to casinos, bingo halls and clubs, and the latter also permitted in pubs, cafes, arcades, etc.

Gambling on sports

Sports gambling has a long history in the United Kingdom, having been controlled for many decades, and more recently relaxed. The 1960 Act legalised off-course bookmakers. Pool betting on horses is a monopoly of the state-owned Tote.

There is a large market in the UK for gambling on competitive sports at bookmakers, particularly for horse, greyhound racing and association football (soccer). The latter also has an associated form of gambling known as the football pools, in which players win by correctly predicting the outcome of each week's matches.

Lottery

The UK's largest lottery is known as the National Lottery, which was set up under government licence in 1993.

A statute of 1698 provided that in England lotteries were by default illegal unless specifically authorised by statute. An 1934 Act legalised small lotteries, which was further liberalised in 1956 and 1976. There could be no big national lottery until the Government established one, however.

Several games are run under this brand, including Lotto and Thunderball. As with other lotteries players choose a set of numbers, say 6 from 50, with six numbers then being drawn at random. Players win cash prizes depending on how many numbers they match.

The national lottery launched a pan-European "super-lottery", called EuroMillions in 2004. Currently 9 countries contribute.

In the UK the national lottery has so far raised several billions of pounds for Good Causes, a programme which distributes money via grants. 28% of lottery revenue goes towards the fund, along with all unclaimed prizes. Additionally, 12% goes to the state. The prize fund is 45% of revenue, with the remaining 15% going towards running costs and profits for the lottery organisers and ticket sellers.

The odds of specific combinations occurring in the UK national lottery are as follows:

6 Numbers 1 in 13,983,816
5 Numbers & Bonus Ball 1 in 2,330,636
5 Numbers 1 in 54,201
4 Numbers 1 in 1,032
3 Numbers 1 in 57
2 Numbers 1 in 8
1 Number 1 in 2

Scratchcards

Gambling forms

[edit] Bingo and casinos

The game of Bingo was popularised in the armed forces in the Second World War and brought back to Britain after the end. The Betting and Gaming Act 1960 allowed commercial bingo halls to be set up, provided they were established as members-only clubs and had to get their take from membership fees and charges rather than as a percentage of the entry fees.

Casinos had a similar history, with requirement for licensing from the Gaming Board of Great Britain and for casinos to be members-only. The number of gaming machines in casinos was limited at 10.

In part due to the difficulty of enforcing this, the Gaming Act 1968 liberalised the law, by allowing true commercial casinos.

The 2005 Act paved the way for larger resort style casinos to be built, albeit in a controlled manner with one being built every few years until the Act is fully implemented. Many towns and cities bid to host one of these so-called "super casinos", which will be similar to those found in Las Vegas. On 30th January 2007, Manchester was announced as the winning bid and will be the location of the first 'super-casino'. The House of Lords urged on 29 March 2007 the Government to review plans for the massive "super-casino" in Manchester. Instead it supported plans for 16 smaller casinos, including ones in Solihull and Wolverhampton.[1]

Gaming machines have two categories depending upon the stakes and payouts involved. The former were limited to casinos, bingo halls and clubs, and the latter also permitted in pubs, cafes, arcades, etc.

[edit] Gambling on sports

Sports gambling has a long history in the United Kingdom, having been controlled for many decades, and more recently relaxed. The 1960 Act legalised off-course bookmakers. Pool betting on horses is a monopoly of the state-owned Tote.

There is a large market in the UK for gambling on competitive sports at bookmakers, particularly for horse, greyhound racing and association football (soccer). The latter also has an associated form of gambling known as the football pools, in which players win by correctly predicting the outcome of each week's matches.

[edit] Lottery

The UK's largest lottery is known as the National Lottery, which was set up under government licence in 1993.

A statute of 1698 provided that in England lotteries were by default illegal unless specifically authorised by statute. An 1934 Act legalised small lotteries, which was further liberalised in 1956 and 1976. There could be no big national lottery until the Government established one, however.

Several games are run under this brand, including Lotto and Thunderball. As with other lotteries players choose a set of numbers, say 6 from 50, with six numbers then being drawn at random. Players win cash prizes depending on how many numbers they match.

The national lottery launched a pan-European "super-lottery", called EuroMillions in 2004. Currently 9 countries contribute.

In the UK the national lottery has so far raised several billions of pounds for Good Causes, a programme which distributes money via grants. 28% of lottery revenue goes towards the fund, along with all unclaimed prizes. Additionally, 12% goes to the state. The prize fund is 45% of revenue, with the remaining 15% going towards running costs and profits for the lottery organisers and ticket sellers.

The odds of specific combinations occurring in the UK national lottery are as follows:

6 Numbers 1 in 13,983,816
5 Numbers & Bonus Ball 1 in 2,330,636
5 Numbers 1 in 54,201
4 Numbers 1 in 1,032
3 Numbers 1 in 57
2 Numbers 1 in 8
1 Number 1 in 2

Scratchcards

Scratchcards are a very popular form of gambling in the UK, due to their easy availability and cheap price. These are small pieces of card where an area has been covered by a substance that cannot be seen through, but can be scratched off. Under this area are concealed the items/pictures that must be 'found' in order to win.

are a very popular form of gambling in the UK, due to their easy availability and cheap price. These are small pieces of card where an area has been covered by a substance that cannot be seen through, but can be scratched off. Under this area are concealed the items/pictures that must be 'found' in order to win.

Gambling in Japan

Gambling in Japan is banned by the Criminal Code chapter 23, however there are several exceptions.

Public sports, lottery, and toto are held under special laws in order to increase the income of national and local governments, as well as to offer a form of entertainment for many people.

Forms of Gambling

Public Sports

Kōei kyōgi (公営競技, public sports) are public races that people in Japan can gamble on legally. There are four different types of kōei kyōgi: Keiba (horse racing), Keirin (bicycle racing), Kyotei (motorboat racing), and Auto Race (motorcycle racing). They are allowed by special laws and are regulated by local governments or governmental corporations.

The prize pool for the gamblers of these races are about 75-80% of total sales. Betting tickets are available at countless circuits and ticket booths within many cities, namely Tokyo, Osaka, Yokohama, and Nagoya.

Lottery

Takarakuji (宝くじ), i.e. lotteries, are held by prefectures or large cities on a regular basis all throughout the calendar year.

There are three main types of lotteries: unique number lotteries, selected number lotteries, and scratch cards. Each lottery ticket is sold at 100 yen to 500 yen, and the top cash prizes are usually 100 million yen or more.

The takarakuji law stipulates that the entire prize pool for any given lottery is to be less than 50% of total sales, with the rest going to local government organizations and charities. Takarakuji tickets are available at takarakuji booth and stores in many cities. Tickets for selected number lotteries can be also bought at some ATMs.

Toto

Toto is a soccer lottery (サッカーくじ, soccer betting) that is held over weekly J-League games and is regulated by the government. With toto, people bet on the outcomes of J. League games, and the size of the top cash prize depends on the number of people who bet correctly. The name toto comes from totocalcio, an Italian word for soccer betting.

Pachinko

Pachinko is a pinball-like slot machine game. It is officially not considered gambling because Japanese laws regard pachinko as an exception to the criminal code on gambling for historical, monetary, and cultural reasons. Pachinko parlours can be found all over Japan, and they are operated by private companies, most of which have Korean connections.

In pachinko, when a player's ball makes it into a special hole to activate the slot machine and a jackpot is made, they are rewarded with a lot more. Players can then exchange the balls into prizes at a booth in the parlour. Money cannot be awarded at pachinko parlors as it is a violation of the criminal code. However, players almost always exchange pachinko balls into prizes, usually slits of gold encased in plastic, and then "sell" them at a neighboring shop for cash.

Gambling in Macau

Gambling in Macau has been legal since the 1850s when the Portuguese government legalized the activity in the colony. Since then, Macau has become known worldwide as the "Monte Carlo of the Orient", and gambling has become a significant part of the city's economy. Until Western-style casino games were introduced in the 20th century, only Chinese games were played, the most popular being Fan-Tan. Now, with all the casinos built in the territory including a few number of new ones (some of them are Las Vegas giant companies) opening up soon, Macau is also known as East Las Vegas.

Gambling in Macau plays an important role in the economy of the city. Many Hong Kong and mainland tourists like gambling there. Few local people in Macau visit casinos, though. Generally, gambling in Macau can be divided into three different categories: casino games, horse racing and greyhound racing. There is also sports betting and a number of lotteries. At the present time, Macau does not license online gaming operations.

Parimutuel betting

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Betting on the Favorite, an 1870 engraving

Parimutuel betting (from the French language: pari mutuel, mutual betting) is a betting system in which all bets of a particular type are placed together in a pool; taxes and a house "take" or "vig" are removed, and payoff odds are calculated by sharing the pool among all winning bets.

The parimutuel system is used in gambling on horse racing, greyhound racing, jai alai, and all sporting events of relatively short duration in which participants finish in a ranked order. A modified parimutuel system is also used in some lottery games.

Parimutuel gambling is frequently state-regulated, and offered in many places where gambling is otherwise illegal. Parimutuel gambling is often also offered at "off track" facilities, where players may bet on the events without actually being present to observe them in person.

Parimutuel betting differs from fixed odds betting in that the final payout is not determined until the pool is closed – in fixed odds betting, the payout is agreed at the time the bet is sold.

Sports betting

Sports betting is the general activity of predicting sports results by making a wager on the outcome of a sporting event. Perhaps more so than other forms of gambling, the legality and general acceptance of sports betting varies from nation to nation. In the United States, the Professional and Amateur Sports Protection Act of 1994 makes illegal to operate a "betting, gambling or wagering scheme", except for in the states of Delaware, Nevada, and Oregon. Nevada, however, is the only state currently allowing sports gambling, while in many European nations bookmaking (the profession of accepting sports wagers) is highly regulated but not criminalized. Proponents of legalized sports betting generally regard it as a hobby for sports fans that increases their interest in particular sporting events, thus benefiting the leagues, teams and players they bet on through higher attendances and television audiences. Opponents fear that, over and above the general ramifications of gambling, it threatens the integrity of amateur and professional sport, the history of which includes numerous attempts by sports gamblers to fix matches, although proponents counter that legitimate bookmakers will invariably fight corruption just as fiercely as governing bodies and law enforcement do. Most sports bettors are overall losers as the bookmakers odds are fairly efficient. However, there are professional sports bettors that make a good income betting sports.

Arbitrage betting

Betting arbitrage, surebets, sports arbitraging is a particular case of arbitrage arising on betting markets due to either bookmakers' different opinions on event outcomes or plain errors. By placing one bet per each outcome with different betting companies, the bettor can make a profit. As long as different Bookmakers are used for arbitrage betting the Bookmakers do not have a problem with this. Each Bookmaker will still make profit due to their calculations.

In the bettors' slang an arbitrage is often referred to as an arb; people who use arbitrage are called arbers. A typical arb is around 2%, often less, however 4%-5% are also normal and during some special events they might reach 20%.

Arbitrage Betting involves relatively large sums of money (stakes are bigger than in normal betting) while another variety, betting investment, means placing relatively small bets systematically on overvalued odds most of which will lose but some win thus making a profit.

The best way of generating profit, which has been established in Britain via sports arbitrage, consists of 'key men' employing others to place bets on their behalf, so as to avoid detection increase accessibility to bookmakers. This allows the financiers or key arbers to stay at a computer to keep track of market movement.

Bookmakers have become wise to such activities with Betfred employing widespread banning in operation notably in yorkshire where Arbitrage appears to be particularly common. Currently it is believed only one group is operating on a large level, the members of which group have been given nicknames such as: big tom, scotch n tall, satchel lad etc. Names released by william Hill spokespeople yorkshire.

Psychological aspects

Studies show that though many people participate in gambling as a form of recreation or even as a means to gain an income, gambling, like any behavior which involves variation in brain chemistry, can become a psychologically addictive and harmful behavior in some people. Reinforcement schedules may also make gamblers persist in gambling even after repeated losses.

The Russian writer Dostoevsky (himself a problem gambler) portrays in his novella The Gambler the psychological implications of gambling and how gambling can affect gamblers. He also associates gambling and the idea of "getting rich quick", suggesting that Russians may have a particular affinity for gambling. Dostoevsky shows the effect of betting money for the chance of gaining more in 19th-century Europe. The association between Russians and gambling has fed legends of the origins of Russian roulette.

Other uses of the term "gambling"

Many risk-return choices are sometimes referred to colloquially as "gambling." Whether this terminology is acceptable is a matter of debate, but generally the following activities are not considered gambling:

• Emotional or physical risk-taking, where the risk-return ratio is not quantifiable (e.g., skydiving, campaigning for political office, asking someone for a date, etc.)
• Insurance is a method of shifting risk from one party to another. Insurers use actuarial methods to calculate appropriate premiums, which could be considered similar to calculating gambling odds. However, insurers can set their premiums to obtain a long term positive expected return.
• Situations where the possible return is a secondary reason for the wager/purchase (e.g. buying a raffle ticket to support a charitable cause)

Investments are also usually not considered gambling, although some investments can involve significant risk. Examples of investments include stocks, bonds and real estate. Starting a business can also be considered a form of investment. Investments are generally not considered gambling when they meet the following criteria:

• Positive expected returns (at least in the long term)
• Economic utility
• Underlying value independent of the risk being undertaken

Some speculative investment activities are particularly risky, but are still usually considered separately from gambling:

• Securities derivatives, such as options or futures, where the value of the derivative is dependent on the value of the underlying asset at a specific point in time (typically the derivative's associated expiration date)
• Foreign currency exchange (forex) transactions
• Prediction markets

Staking systems

Many betting systems have been created in an attempt to "beat the bookie" but most still accept that no system can make an unprofitable bet profitable over time. Widely-used systems include:

• Fixed stakes – a traditional system of staking the same amount on each selection.
• Fixed profits – the stakes vary based on the odds to ensure the same profit from each winning selection.
• Due-column betting – A variation on fixed profits betting in which the bettor sets a target profit and then calculates a bet size that will make this profit, adding any losses to the target.
• Card counting - Many systems exist for Blackjack to keep track of the ratio of ten values to all others; when this ratio is high the player has an advantage and should increase the amount of their bets. Keeping track of cards dealt confers an advantage in other games as well.
• Pot odds vs. true odds - In poker, the ratio of the size of the current pot to the bet a player is considering is called "pot odds", which can be compared to the "true odds" of a player completing a winning hand from the cards remaining to be dealt to determine whether to make the bet.
• Kelly – the optimum level to bet to maximize your future median bank level.
• Martingale – A system based on staking enough each time to recover losses from previous bet(s) until one wins.

Types of Gambling

Casino games

While almost any game can be played for money, and any game typically played for money can also be played just for fun, some games are generally offered in a casino setting.

Table games

A pachinko parlor in Tokyo, Japan

• Blackjack
• Pai Gow Poker and Tiles
• Poker
• Teen Patti
• Spanish 21
• 3-card poker
• Baccarat (punto banco)
• Caribbean Stud Poker
• Casino war
• Craps
• Fan-Tan
• Faro
• Let It Ride
• Pachinko
• Pyramid Poker
• 4-card poker
• Red Dog
• Sic Bo
• Texas Hold'em Bonus Poker
• Roulette

Electronic gaming

• Slot machine
• Video poker

Other gambling

• Sports betting
• Arbitrage betting
• Keno
• Bingo

Legal aspects

Both the Catholic and Jewish traditions traditionally set aside days for gambling, although religious authorities generally disapprove of gambling to some extent. Gambling can have adverse social consequences. For these social and religious reasons, most legal jurisdictions limit gambling. Some Islamic nations prohibit gambling; most other countries regulate it.

Many jurisdictions, local as well as national, either ban or heavily control (by licensing) gambling. Such regulation generally leads to gambling tourism and illegal gambling. In other terms gambling can be performed through materials which are given a value but isn’t real money. The involvement of governments, through regulation and taxation, has led to a close connection between many governments and gaming organizations, where legal gambling provides significant government revenue, such as in Monaco or Macau.

Under US federal law, gambling is legal in the United States, and states are free to regulate or prohibit the practice. Gambling has been legal in Nevada since 1931, forming the backbone of the state's economy, Las Vegas is perhaps the best known gambling destination in the world. In 1976, gambling was legalized in Atlantic City, New Jersey, and in 1990, it was legalized in Tunica, Mississippi; both of those cities have developed extensive casino and resort areas since then. Since a favorable U.S. Supreme Court decision in 1987, many Native American tribes have built their own casinos on tribal lands as a way to provide revenue for the tribe. Because the tribes are considered sovereign nations, they are often exempt from state laws banning gambling, and are instead regulated under federal law. Additionally almost all states have legalized gambling in the form of a lottery.

Because contracts of insurance have many features in common with wagers, insurance contracts are often distinguished under law as agreements in which either party has an interest in the "bet-upon" outcome beyond the specific financial terms. E.g.: a “bet” with an insurer on whether one's house will burn down is not gambling, but rather insurance — as the homeowner has an obvious interest in the continued existence of his/her home independent of the purely financial aspects of the "bet" (i.e., the insurance policy). Nonetheless, both insurance and gambling contracts are typically considered aleatory contracts under most legal systems, though they are subject to different types of regulation.

There is generally legislation requiring that the odds in gaming devices are statistically random, to prevent manufacturers from making some high-payoff results impossible. Since these high-payoffs have very low probability, a house bias can quite easily be missed unless checking the odds carefully

Gambling variables

There are three variables common to all forms of gambling:

• How much is being wagered, the initial stake (in money or material goods).
• The predictability of the event.
  • In mechanical or electronic gambling such as lotteries, slot machines and bingo, the results are random and unpredictable; no amount of skill or knowledge (assuming machinery is functioning as intended) can give an advantage in predictability to anyone.
  • However, for sports events such as horse racing and soccer matches there is some predictability to the outcome; thus a person with greater knowledge and/or skill will have an advantage over others.
• The odds agreed between the two (or more) parties to the wager; where there is a house or a bookmaker, the odds are (quite legally) arranged in favor of the house.

The expected value, positive or negative, is a mathematical calculation using these three variables. The amount wagered determines the scale of an individual wager (bet); the odds and the amount wagered determine the payout if successful; the predictability determines the frequency of success. Finally the frequency of success times the payout minus the amount wagered equals the "expected value" The skill of a gambler lies in understanding and maneuvering the three variables so that the "actual value" is positive over a series of wagers.

Gambling

Gambling has a specific economic definition, referring to wagering money or something of material value on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods. Typically, the outcome of the wager is evident within a short period of time.

The term gaming in this context typically refers to instances in which the activity has been specifically permitted by law. The two words are not mutually exclusive; i.e., a “gaming” company offers (legal) “gambling” activities to the public. (This distinction is not universally observed in the English-speaking world, however. For instance, in the UK, the regulator of gambling activities is called the Gambling Commission (not the Gaming Commission).