The Ten Most Important Events in Gaming Law

#136 ©Copyright 1999 by I. Nelson Rose. All rights reserved worldwide. Gambling and the Law® is a registered trademark of Professor I. Nelson Rose, Whittier Law School, Costa Mesa, CA.

Years ending in zeros have magic powers. They make us do strange things.

Like draw up lists.

Of course, we do this whenever New Years draws near. But, the turning of a decade seems to have extra significance. So, we begin making our lists even earlier in the year.

This New Years day will have triple-zeros. So, why wait until December, or even April, for that matter.

Here are what I believe are the ten most important events in gaming law of this century.

(I decided it would be impossible to look back over the millennium, although the Statute of Anne of 1710 — which even today makes most gambling debts legally unenforceable — seems to deserve a mention.)

1. United States Supreme Court decides The Lottery Case – 1903. This is one of the most important decisions ever handed down by the high Court, not just for legal gambling, but for the country. States were being swamped by Louisiana Lottery tickets, and they asked the federal government for help. Congress responded by passing a statute, still on the books, making it a federal crime to send lottery tickets across state lines.

For the first time, the Supreme Court held that the federal government had power over a legal product, simply because it was involved in interstate commerce. This created the modern, massively powerful federal government, since virtually everything involves interstate commerce.

2. Nevada Legislature legalizes casino gaming – 1931. Actually, it re-legalized casinos. Nevada had legal casinos off and on until 1909, when they fell victim to the anti-gambling crusades of the era.

Apparently everyone in Nevada knew that the prohibition was just for show. Casinos remained open when they were legal, then illegal, then legal again.

But, if the law had not been changed in 1931, it is doubtful that Bugsy Siegel would have built his fabulous Flamingo in the middle of the Nevada desert.

3. New Hampshire authorizes a state lottery – 1962. The first state lottery of this century, and the birth of a multi-billion dollar industry, with yearly sales six times as large as the nation’s movie theaters.

4. New Jersey legalizes casino gaming – 1976. Significant in itself, Atlantic City also showed that casinos could be put near big cities without having the state fall into the sea.

5. American Psychiatric Association recognizes pathological gambling as an official “mental disease or disorder” – 1980. Although explicitly designed not to have any legal significance, there are great legal consequences when doctors testify that gambling to excess is a symptom of an illness. For example, criminal law does not punish people for being sick — even embezzlers.

6. United States Supreme Court decides Cabazon – 1987, which leads to the Indian Gaming Regulatory Act – 1988. The Court and then Congress reaffirmed the right of tribes to offer any form of gambling permitted by the state where their land is located. Congress may have thought it was legalizing high-stakes bingo. But, what it got was coast-to-coast casinos.

7. Iowa legalizes riverboat casino gaming; first sailing – April 1, 1991. On a slow news weekend, the launching of these picturesque riverboats was carried by every T.V. network. Legislators in a dozen other states immediately entered bills to climb aboard, figuring, “If it is safe enough for conservative Iowa, it must be O.K. for us.”

8. National Gambling Impact Study Commission – 1996-1999. Created as a political ploy by the “anti’s,” this Commission will have an impact long after it is gone. The final Report will not result in any new laws. But, over the last two years government agencies have had to take a serious look at issues they had successfully ignored, like problem and underage gamblers. The industry has had to put on its best face. In the process, it created programs to protect its patrons and local communities.

9. Australian states legalize Internet gambling – 1998-1999. The first First World nation to create a sophisticated system of government licensing, oversight and player protection. The Model Act being adopted Down Under is already being copied by smaller Caribbean island-nations. More importantly, one of the great barriers to Internet growth has now fallen: players can trust the operator and the game.

10. United States Supreme Court decides to hear New Orleans Broadcasting – 1999. The Ninth Circuit, in the far West, ruled casinos may broadcast commercials over radio and television. But, the Fifth Circuit said the Ninth was wrong, and barred casinos in Mississippi and Louisiana from the airwaves.

The Supreme Court cannot dodge the issue: either casinos may advertise in their own states, or they may not.

But, the Court will probably avoid deciding whether stations in neighboring non-casino states may carry casino commercials.

So, we will have to wait for the top ten of the 21st century to know for sure whether T.V. and radio in California and New York may broadcast ads for casinos in Nevada and Atlantic City.

[Professor Rose can be reached at rose@sprintmail.com]

END