The Growth of Gambling Industry

Indeed, gambling has come a long, long way.

Until the early 1960s, legal gambling outside the state of Nevada was limited largely to horse and dog racing and charitable bingo.

By the end of 1993, forty-eight states and the District of Columbia had legalized gambling of some kind.

Only Hawaii and Utah did not, and still do not, have legal gambling.

Legal gambling is a big business. In 1974, $17.3 billion was legally wagered. During the eight years from 1974 to 1982, the amount of money legally wagered increased more than sevenfold to $125.8 billion.

Between 1982 and 1996, the total amount of money wagered annually increased by 366 percent.

While the gambling industry has grown substantially, not all segments have participated in this growth. The pari-mutuel segment (horse and dog racing and jai-alai) has lagged behind the rest of the industry and the handle at horse and dog tracks actually declined between 1982 and 1996.

The total pari-mutuel handle of $17.5 billion in 1996 accounted for only 2.9 billion percent of the American gambling industry's handle of 4586.5 billion.

As of September 1996, twenty-four states had legalized off-track betting (OTB) facilities.

It is much more common for bets to be taken on horse races than on dog races. In 1995 and 1996, more money was bet on horse races at OTBs than at tracks.

Inter-track wagering (ITW) occurs when people at one track bet on televised races being run at other tracks.

Some states permit inter-track wagering only on races being run within the state (intrastate ITW), while others permit wagering on races occurring in other states (interstate ITW).

As of September 1996, forty-two states had legalized interstate ITW and thirty-four had legalized intrastate ITW. By permitting inter-track wagering, many states without OTBs have, in effect, created a kind of off-track betting opportunity.

Clearly, the OTB and ITW handle has been increasing and has offset the decline in handle at tracks.

Without OTBs and ITW, the handle of the horse and dog racing segment would be substantially lower than it is.

In lotteries, state-operated lotteries have experienced substantial growth.

The first lottery in this century began in 1964 in New Hampshire, following a decade of legislative efforts to establish a lottery.

By 1980, fourteen states had lotteries. At the end of 1996, thirty-seven states and the District of Columbia had lotteries or were participating in multi-state lotteries.

The handle for 'traditional' lottery games (weekly and daily drawings, scratch-off and pull-tab games) has grown at almost twice the rate of the overall gambling industry.

Video lottery games, relatively new to the gambling scene, have enjoyed a steady growth since the early 1990s.

In 1996, total lottery sales accounted for 7.3 percent of the gambling industry's total handle.