Commercialized Gambling in America
Lotteries, horse racing, and card and dice games had achieved widespread acceptance and legality in America, in the year 1830.
Also, sizable profits could be gained from willing participants.
Gambling was no longer predominantly a private activity conducted in drawing rooms, down back country roads, in exclusive clubs, or in darkened taverns.
It had been taken over by professionals who operated openly and profited by their skill and expertise. The vast potential for profit often encouraged the new breed of professional to engage in cheating, fixing, and rigging.
Professional gamblers, because of their alleged penchant for cheating, became known as 'blacklegs'.
The disapproval against them can be seen in a traveler's guide to the frontier, which labeled 'gaming adventurers, blacklegs as the lowest class of people on the frontier' and warned visitors to steer clear of such confidence men.
Public reaction to reports of cheating and fraudulent schemes perpetrated by gambling professionals led to a round of reforms that altered the face of gambling in America.
From 1830 to 1860, confidence that gambling could be properly regulated waned, and many jurisdictions opted for outright prohibition. Although gaming was not banned in all areas, the gambling profession developed an unsavory reputation that blocked gambling's legitimation.
However, in lotteries, changing public opinion toward the operation of lotteries ushered in a reform movement that eventually swept through the United States.
Between 1825 and 1833, several large lotteries were wracked by scandals of mismanagement and outright fraud.
A bogus lottery, exposed in 1831, had collected over $400,000 and paid out no prizes.
In 1833, an anti-lottery group revealed that the Union Canal Lottery of Pennsylvania had sold over $5 million in tickets though they had been authorized sales of only half a million.
In New York, the lottery contracting firm of Yates and McIntyre was indicted by an 1830 grand jury that found its methods of distributing prizes 'a much apparent mystery.'
In Boston, lottery brokers were accused of selling fictitious tickets for a profit of $1 million. Maine legislatures were shocked when an 1835 audit discovered that lottery directors had received over $10 million in expenses out of a total of $16 million collected.
Other states and municipalities uncovered similar irregularities, and lotteries generally fell out of favor.
Editorial opposition to lotteries reflected a paternalistic protection of the working classes.
Ticket sellers were accused of 'assailing the poor man at his labour, entering the abode of the needy, and by holding out false promises of wealth, induci[ng] him to hazzard his little all on the demoralizing system.'
A New York grand jurist of this period summed up the public's new view of lotteries, describing games 'as evil as the most alarming nature both in a pecuniary and moral point of view.'
Between 1833 and 1840, twelve states had specifically banned lotteries: most other states followed suit, and by 1865 no authorized lotteries remained in the United States.
Although there was a short-lived revival of lotteries after the Civil War, only the Louisiana lottery was to achieve prominence. When it was banned in 1894 after rumors of massive fraud, legal lotteries disappeared from the United States for the next seventy years.
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