3 Facts and 3 Myths About the Gambling Industry

King of Spades Card and Facts Text

Gambling has been around for thousands of years (and probably even longer than that). And no, that’s not a myth. With that in mind, quite a few misconceptions about the industry have developed throughout those years.

From legal specifics (what is it about the riverboat thing?) to tricks that casino owners and designers play on patrons in order to get more money, there’s a lot of false information out there. That makes finding the truth that much more difficult.

In this article, I’ll separate fact from fiction and explain what’s really going on in the real money gambling industry.

Myth: The Only Winner Is the Casino

Casinos are often viewed as predatory institutions that do everything in their power to get hardworking people to waste their money on games that they don’t have any chance to win.

This simply isn’t the case. Even when you remove the idea that casinos are “forcing” anyone to do anything, you’re still not giving them enough credit.

Overhead View Of The Bellagio Casino In Las Vegas

In fact, casinos generate huge amounts of tax revenue for the states. You might be thinking that all they’re doing is taking money from residents and giving less of it back. That’s not really the case either. Much of gambling revenue comes from out-of-town visitors. So, when tourists gamble, residents win.

I’m not trying to make the argument that casinos are charities set up for the benefit of people in the area, but it’s important to recognize the positive impact they often have on local economies. More than five states have over $1 billion coming in directly from gaming establishments.

Fact: Legality Varies Based on State

Have you ever tried to find an article that succinctly and clearly lays out exactly what the state gambling laws are in regards to different types of casino gaming? It can seem impossible. Spend an hour trying to figure out where things stand on the federal level and you might as well spend your time doing anything else.

Because local governments have taken a different approach to the cost/benefit analysis equation of “to be a gambling state or not to be a gambling state,” the legal guidelines are all over the place. What’s legal in one place might be illegal 15 minutes down the road if you’re crossing state lines.

Which state you’re in isn’t the only determining factor that makes gambling legal or not. Some states have special laws that allow “riverboat” gambling only. This is led to some pretty creative solutions and exploitation of various loopholes.

Asking about online gambling and sports gambling legal technicalities are also more likely to draw questions than answers. With any luck, we’ll be able to say goodbye to these confusing laws if gambling becomes legal on a federal level in a few years.

Myth: Riverboat Gambling Is Obsolete

Now that gambling laws are becoming more and more accommodating, there’s no reason to keep utilizing the “riverboat gambling” loophole, right? Actually, they’re still a thing!

For one, even with new states rolling back gambling restrictions on a regular basis, some states still prohibit gaming establishments within their borders. Now, that begs the question, “why is it legal to gamble on the water, but not on land?”

It’s time for a brief history lesson. Back in the day (think of the 1800s), gambling was banned everywhere in the US. The influence of Puritan culture were still relatively strong in this regard.

Indiana Riverboat Casino

Although they knew it wasn’t legal, people began to have more time on their hands as homes, farms, and increasingly-big towns started to take the burden off an individual’s workload. Not wanting to break any laws, businessmen and merchants began gambling on riverboats (hey, it’s not on land), which were a highly popular method of transportation at that time.

Today, the idea of “illegal on land, not illegal on water” still exists in some areas. Take for example, the Rivers Casino in Des Plaines, Illinois. Because of the “illegal on land” law that existed in the mid-2000s, builders got creative. They managed to create an inches-deep “puddle” on which they could build a casino. Yes, this is a real story.

Fact: Casinos Are Using Psychology to Keep You Playing

The longer you gamble, the more likely it is that you’re going to end up losing money. Unfortunately, this is just the nature of playing games where the odds are slightly uneven—in the house’s favor, of course.

It should be mentioned that casinos do have to adhere to strict guidelines in order to operate legally. Regulatory agencies have criteria in place that casinos must follow or they risk getting fined heavily for their infraction.

It’s necessary to keep casinos in line because game designers have devised some nefarious methods over the years that make it nearly impossible for people to walk away.

If you’re of the belief that gambling addicts simply don’t have the will power to “just walk away,” here’s a real-life example of a game designer weaponizing human psychology for the casino’s benefit:

A casino was looking for a way to keep people playing the slot machines even when they were suffering heavy losses. Because it’s illegal to pre-program wins (meaning giving a losing a player free money), they found a way to get around this pesky obstacle.

Two Men Playing Skill Based Slot Machines

The designer proposed a method for keeping a small percentage of slot machine loss and saving it for later. Once a player began struggling heavily and the “tax” limit was reached (meaning there was a potential for them to get up and leave), the machine would magically know it’s time for a win. Thus, the lights would flash, the player would seemingly get a payout, and they would keep on pulling that lever.

Make no mistake about it: Casinos, and especially game designers, are well-aware of the psychological tricks involved with addiction.

The lights, sounds, general atmosphere, and even the games themselves are programmed to keep you locked in. Unfortunately, all you can do is recognize it and try to avoid becoming a victim.

Myth: Online Casinos and Physical Casinos Are Competitors

It might seem like there’s a power struggle regarding online vs land-based casinos. The reality is that they’re actually on the same side. And in many cases, they’re owned by the same companies.

Gaming companies have known for decades that the way to have the most success is to bring the casino into the homes of the players. By eliminating the need to get in the car and drive downtown, they’ve removed the obstacle that stops a high percentage of people gambling on a more regular basis.

The big-time casino conglomerates have all invested heavily in the future of online gambling, and they continue pouring millions into getting the newest and most secure platforms ready to go.

Fact: Tribal Casinos Started as Bingo Halls

Most Americans who are familiar with gambling know that native tribe casinos have had a major stake in the industry for years. Due to the injustices they faced during the founding of the country (and the centuries thereafter), the government has made concessions to help them out. One such concession is the ability to operate casinos legally on tribal lands.

Woman in a Native Tribe Casino

Back in the 1970s, Native American tribes began using bingo halls as a way to raise some money for their communities. These weren’t your grandma’s bingo games either. The stakes were much higher, which caused some issues with legality.

Fast forward to 1981, and the US Fifth Circuit Court of Appeals determined that the tribe could operate however they wanted because states did not have regulatory power over the tribes. More than 40 years later, Native American-operated casinos are bringing in billions of dollars on an annual basis.

Know the Myths and Facts of Gambling

The gambling industry is one of the most fascinating to study because of the “gray area” it exists in legally (at least currently). Moving forward, it will be fascinating to see how things play out as laws continue to become more open to the idea of legalized gambling.