History of Gambling in the United States
The first colonists from England to America brought their gambling games together. Gambling in America began in the 17th century, and games that were popular in Europe at that time were all played in this new continent too. In other words, almost all card and table games of the era were available in the American states. Lotteries were supported by the state governments and the proceeds were used to build churches and schools. Other gambling games were available at saloons, which existed in almost every town. Especially the card games were played there. (Yes, saloons like in the cowboy movies.) For almost a hundred years, there was no control over gambling games. There was not yet a federal government, and for this reason, every state chose to implement its own regulations. The religious provinces banned all kinds of gambling. For example, the roulette game was seen as "the devil's game" because the sum of the numbers on the wheel was 666, and many states banned it for this reason. Over time, gamblers began to prefer two regions for their habits: San Francisco and the Mississippi River valley. The reason why San Francisco was popular was the "gold rush". The miners who were looking for gold all day spent their winnings every evening at saloon tables.
The First “Mobile” Casinos
The Mississippi River was logistically advantageous: The boats were roaming the entire river and operating as a “mobile” casino. It is believed that the poker game first appeared in these boats. Until then, the only card games played in America were blackjack and baccarat. In the early 20th century, the federal government declared gambling games illegal and banned them in all states. This was not a wise decision because gambling went literally underground and began to be controlled by the mob. Moreover, the states did not like this federal decision: They could not make money from gamblers and casinos anymore. During the great economic depression of the 1930s, the state of Nevada made a radical decision and allowed gambling within its borders. They chose a completely deserted land for this, the locals were calling it “Las Vegas”. This name was Spanish and meant "meadow". It was a joke by the Spaniards who explored the area in the 17th century. The land was so barren and empty, they called it “meadow”, some sort of “inside joke”. Las Vegas has developed at a great pace. The gangsters flocked to the area first and they set up the first casinos. Slot machines have also begun to become popular in this period. Until the '80s, Las Vegas was controlled almost entirely by the “mob”. At the end of the 80’s, big companies started to buy casinos and turned Las Vegas into a "legal tourist trap". Some of the other states in the United States have also legalized gambling, but none of them has been as successful as Vegas. In the early 21st century, online gambling became even more popular than Vegas, and this is still the situation today.
Online Gaming in the USA - Predictions For 2019
The future looks quite bright for the American online gambling market. In 2018, the average revenue generated by the gambling industry was $ 137.5 billion. If we think that 730,000 people are working in the gambling sector and each one has a family, this industry feeds millions of people. In 2019, the sector size is expected to reach $ 450 billion. If we share some interesting statistics:
- Twenty-five percent of the $ 137.5 billion gambling market is controlled by brick-and-mortar casinos.
- The remaining 75% belongs to online casinos. However, their annual income is slightly lower: $ 76.59 billion. This is the average income of the online gaming industry. Simply put, we can say that half of the income in this market comes from online, and half from brick-and-mortar casinos.
- Interestingly, the number of Americans interested in sports betting is increasing. In 2019, the sports betting market is expected to increase by 13%.
- The world's most winning casino is in Las Vegas: The “Las Vegas Sands” casino earns an average of $ 12.88 billion each year.
- 27% of the tourists who visit Las Vegas lose $ 100 at least on average.
- Analysts estimate that the online gambling industry will increase by $ 20 billion every year, starting in 2019.
- Las Vegas casinos win $ 118.46 million only from poker games. A large part of their revenues come from slot games: The city has 5.510 slot machines.
- Every year, 39.01 million people visit Las Vegas, but only 5% of them come just for gambling.
Rules and Regulations in the US
There is not a single law in America that regulates gambling and online gambling. Federal and state laws often contain different provisions. However, some laws apply to all states. For example, "The Interstate Wire Act", which entered into force in 1961, bans all bets that are made on a "wire". Today, this law is the biggest reason why online gambling is still illegal. The purpose of the law is to prevent illegal bookies accepting sports bets over the telephone: This is what the word "wire" means. However, since online gambling is done via telephone lines too, it is claimed that the law also covers online gaming too. However, the states are able to determine the extent of the Wire Act as they wish within their own limits, with various legal arrangements. For example, Nevada and Pennsylvania have made online gambling almost legal. New York, Michigan, and a few other states are getting ready to do the same. Some states have much stricter regulations and do not accept any kind of gambling, such as Montana and Washington. Legal regulations are quite complex, but we can summarize as follows:
- If you live in Nevada and Pennsylvania, online gambling is not legal, as long as you play at “state-approved” casinos.
- No legislative body or government impose legal sanctions on individual gamblers. So even if you live in another state, you can join an online casino and play for real money. There is no penalty for this. Legal sanctions apply only to online casino owners.
- However, you still have to find an online casino that accepts USA players. The government does not sanction the players but prohibits the banks from making gambling related transfers. So, if the casino does not accept USA players, you cannot make a deposit or a withdrawal.
The US Online Gambling Market
The online gambling market in America is not very big, as they are legal only in two states we mentioned above. These states also want their private licenses taken. Since the price of these licenses is so high, many global brands have not yet entered the USA market. There is no clear indication of the size of the USA online gambling market, but we know how much income the brick-and-mortar casinos earn. Statistics show that the most profitable games are lotteries. They are legal in almost every state in the USA and generate an annual revenue of $ 30 billion. Bingo games are second. They are also legal in most of the states and have a market size of $ 2.20 billion. Indian casinos generate the most revenue: $ 26 billion. Since Indian lands have their own laws and regulations, they are practically a different country in the USA and can legally offer gambling services. Most of these are located near the Canada border.
Online Gaming and Taxes in the US
If an American citizen earns money by gambling, he must declare it to the Tax Office through a W-2G form. In general, we can say that all gambling earnings are subject to a fixed tax rate of 25%. For winnings more than $ 5,000, you may also need to pay an income tax. In this respect, the legal regulation of each state is different from the other. If you declare all your gambling earnings to the Tax Office, you can also deduct 2% of your losses from the income tax. Non-American citizens who earn a gambling-related winning in the USA need to pay a fixed tax of 30%.
The basic gambling law in the USA is the Interstate Wire Act, as mentioned above. But there are two other laws that have recently come into effect: The Sports Protection Act and The Unlawful Internet Gambling Act. As can be guessed from its name, the first one organizes the sports betting industry and allows only bookmakers with a license to operate. The second law does not prohibit online gambling directly but prohibits the USA banks from working with online casinos. Currently, an online casino abroad cannot accept a payment from USA banks and/or send money to them, even if they accept USA players. For this reason, online casinos who accept USA players prefer alternative payment methods such as e-wallets. Some of them switched to digital currencies like Bitcoin, which cannot be tracked by governments.
Online Casino Games and Types
There are a lot of games in online casinos, but we can determine the basic categories as follows:
- Slot Machines: On average, 70% of casino earnings come from slot games. In this respect, they are the “best” games for casinos: Everybody plays them and they depend entirely on luck. A professional gambler can increase his winning chance by applying various strategies in card games. This is not the case with slot games: There are no strategies that work for them. Simply put, you pull the lever and hope for the same symbols land on a pay line. There are lots of slot categories such as fruit, video, jackpot, and progressive jackpot.
- Card Games: These are the most profitable games in an online casino. The most popular card games are poker and blackjack. However, there are lots of different and exotic card games too, such as pai gow and Caribbean poker. Using a strategy and/or tactic can increase the winning chances of a player. For example, you can win every blackjack game if you are able to count the cards perfectly and this is legal. Although you need to be a mathematical genius or a savant to do that.
- Table Games: Simply put, these are the games that played on a “table”. The most known examples are roulette and craps. In this regard, roulette games are more popular than dice games. If you also like them, try to prefer European roulette instead of the American version. Your winning chances will be much higher. There is also a special variant called “La Partage” or simply “French roulette”. This is the most advantageous one for players, as it offers the lowest house edge.
- Virtual Games: Virtual games are actually virtual sports bets. They can be played on the virtual football and basketball leagues. Usually, they are offered only for entertainment purposes and nothing else. It is almost impossible to make money from playing them.
- Live Dealer Games: These are card and table games but they are played against a real dealer, instead of a “computer”. A dealer starts a broadcast over the internet and it is possible to connect to that broadcast. Through a special interface, you can place bets in real time. The popularity of live casino services are increasing and almost every online casino offers them nowadays.
- Exotic Games: Arcade games and/or fun games, such as scratch cards. Just like virtual games, they are for fun only, you won’t be able to make any serious profit from them. Give them a go if you are bored with other types of games.
Lastly, we should mention that some of the online casinos started to offer virtual casino games services. This feature is rare nowadays but it will be more popular in 2019 – expect to see more casinos that offer VR gambling games. As always, you can try all of the games listed in this article for free on our website and find the perfect casino to play them with real money by reading our reviews. Have fun and good luck in 2019 too!