Gambling in the South: Implications for Physicians

James R. Westphal, MD, Lera Joyce Johnson, PhD, Stephanie Stodghill, Lee Stevens, MD, Department of Psychiatry, Gambling Studies Unit, Louisiana State University Medical Center-Shreveport, and the Department of Psychology, Centenary College of Louisiana, Shreveport

South Med J. 2000;93(9) 

In This Article

History

As early as 1612, the Virginia Company of Jamestown petitioned the king of England for permission to conduct a lottery, mainly in England, in order to finance the struggling colony.[1] Although other types of gambling were practiced, the first two cycles of legalized gambling in the colonies consisted mainly of lotteries. Lotteries contributed substantially to the capital needed for economic development of the colonial South. The University of North Carolina, chartered in 1789, was initially funded by lotteries.[2] After the Revolutionary War, lotteries were held to improve public services in the South. In 1823, Tennessee authorized a lottery to finance a public hospital in Nashville. Also during that period, Georgia held local lotteries to finance county schools.[3]

Although lotteries were legal and used to promote public works, some colonial governments attempted to safeguard their citizens from gambling. The Statute of Anne[4] was widely used in the South. This English law made collection of gaming debts unenforceable and gave the loser the right to regain losses over £10. South Carolina, Virginia, and Georgia passed versions of it during the colonial period. Southern colonial governments dealt restraints against gambling only when it disrupted the social order with issues such as "cheating, fighting, or the disruption of the economy caused by large losses at gaming."[4] In places such as New Orleans, La, which had become a major gambling center by 1718, gambling was not formally legalized, but was acceptable as long as social order was maintained. Virginia attempted to control gambling by prohibiting gambling in public places in 1744.[4] The government's use of gambling-related funds for public works, paired with legislative attempts to control the adverse effects of gambling for individuals, demonstrated an ambivalence toward gambling that would wax and wane throughout the historical cycles of gambling.

In the 1830s, legislation began to appear that prohibited gambling. North Carolina, South Carolina, and Georgia passed laws that prohibited gambling in public places, but allowed exceptions for "respectable gentlemen" to participate in leisurely pleasures without fear of prosecution. The new southern states, Tennessee, Mississippi, Louisiana, Florida, and Kentucky, all passed similar statutes during the Jacksonian period. By 1840, 12 states in the South had laws against lotteries. These laws were based on moral objections to the social influence of the lotteries. Many states also included provisions that prevented legislators in the future from legalizing gambling in order to raise revenue.[5] When Texas was admitted as a state in 1845, its constitution prohibited all gambling.[3] In 1855, Arkansas classified all forms of wagering as a criminal offense.[4]

Conventional ambivalence toward gambling in the South continued, however, as more than 2,000 gamblers were active on Mississippi riverboats until the Civil War,[2] despite Mississippi's statute against public gambling. Lotteries died in the south by 1862 in all states except Louisiana, Delaware, Missouri, and Kentucky[6] bringing to an end the first cycle of legalized gambling.

Many southern states legalized gambling during the post-Civil War era. States such as Kentucky, Alabama, Georgia, and Mississippi held lotteries to finance projects for the public good, such as the purchase of fire-fighting equipment.[7] However, legalized gambling in the South during this period was dominated by the Louisiana State Lottery.[4] Chartered in 1868, the Louisiana State Lottery Company was nicknamed "The Serpent." Spurred by the economic crisis faced by the South after the Civil War, Act 25 of the 1868 Louisiana state legislature granted the Louisiana State Lottery Company a 25-year monopoly and a $40,000 tax exemption. By 1877, Louisiana State Lottery Company tickets were found in every state in the nation.[4] Horse racing has flourished in Kentucky since 1875 when it was first legalized.[7]

Antigambling legislation from 1878 through 1894 reflected a resurgence of political ambivalence toward gambling. In 1878, Kentucky, Alabama, and Georgia passed laws that prohibited the sale of Louisiana State Lottery Company tickets within their states to lessen the political power that The Serpent had amassed.[3] In 1879, the Louisiana State Lottery Company charter was withdrawn. Sales of all lottery tickets were prohibited due to the current political environment and the growing moral objection to the lottery inside and outside Louisiana. Lottery officials spurred the renewal of their charter largely with bribes and favors to officials and were in business again that same year. Despite the political opposition, the Louisiana lottery flourished after its rebirth and grossed from $3.5 to $13 million a year for 10 years.[3,4]

The numerous scandals that plagued the Louisiana lottery led to its demise on January 1, 1894.[4] Antigambling political forces, fueled by Louisiana lottery scandals, succeeded in passing federal legislation banning legalized gambling that would last until the 1930s. Only horse racing in Kentucky and Maryland survived this backlash.

Nevada initiated the renewal of legalized gambling in the 20th century when it legalized casino gaming in 1931.[7] Shortly afterward, in 1935, legalized gambling reappeared in the South when Louisiana and Florida, along with nine states in other regions of the country, legalized horse racing.[7] There were no other legalized gambling activities in the South until 1974, when Maryland began an interest-only lottery program.[4] In an interest-only lottery program, players may redeem their tickets for their original purchase price at any time, or keep them to remain eligible for lottery prizes. In 1978, Seminole Indians in Florida won the right to conduct high-stakes bingo games. By the late 1980s, lotteries had become common in the northern and eastern portions of the United States but had only begun to appear in the South.[4] In 1991, Mississippi approved permanently docked riverboats. Louisiana followed in 1992, and also approved one land-based casino in New Orleans.[4] Louisiana, Florida, Mississippi, and North Carolina presently permit operation of Native American Indian casinos.

To date, every southern state has some form of legalized gaming. Louisiana has nine types of legalized gambling, Texas and Florida have four, Mississippi has three, and Georgia has one. Table 1 lists the most popular types of legalized gaming. In addition to these gaming activities, Maryland, Delaware, West Virginia, and South Carolina have video lottery terminals, and Florida permits Jai-Alai.[8] Although Tennessee has legalized horse racing, it does not yet have any horse racing facilities.

Riverboat-based casinos are legal in many locations throughout Louisiana and Mississippi, and most gambling operations generate high revenues. Harrah's Entertainment, Inc, which operates casinos in Louisiana and Mississippi, reported a 72% increase in revenues for the first quarter of 1999 from the previous year. Revenue was estimated at $711.1 million.[7] Despite the high revenue of many gambling establishments in the South, the failure of others (one in New Orleans and several in Mississippi) may signal the start of a backlash in gambling participation. In 1996, the New Orleans land-based casino declared bankruptcy, and Arkansas voters struck down a casino bid.[8] Evidence of this potential backlash in gambling may also be taken from the 33 (of 64) Louisiana parishes (counties) that voted in 1998 to prohibit video poker.

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