In little more than a half-century, the United States has become a gambling nation. In 1963 a map of the country would have shown one state, Nevada, with legal casino gambling and no states with government-sponsored lotteries. It would have shown racetracks that were merely racetracks, not fronts for slot parlors.
Today’s map shows 19 states where commercial casinos—that is, casinos run by privately owned companies—are legal and 14 that allow racetracks to offer casino gambling at so-called racinos. It displays another 28 states with casinos owned by American Indian tribes. As for lotteries, the governments of 44 states and the District of Columbia now own and operate them. The 49 states in which both lotteries and casinos were illegal in 1963 are now 2: Utah and Hawaii. With the partial exception of the tribal casinos, which were green-lighted by the Supreme Court in its 1987 California v. Cabazon Band of Mission Indians decision, this transformation occurred state by state, outside the gaze of the federal government and the national news media.
Pennsylvania was an early adopter of lottery gambling; in 1972, it became the seventh state to create one. The state came to the casino game much later: in 2006, when the first legal slot machine parlors opened, and in 2010, when the legislature added table games like blackjack and craps to the casinos’ menu of offerings.
The timing in both cases is easily explained: In 1972, Pennsylvania found itself bordered on the east and north by two states, New Jersey and New York, that adopted lotteries even earlier than it did. (Its southern neighbor, Maryland, was in the process of creating one.) In 2006, Pennsylvania was again surrounded, or about to be, by even more states that, by then, had legalized casino or racino gambling, including Delaware, Maryland, Ohio, and West Virginia, as well as its familiar nemeses, New Jersey and New York. In both cases, the state authorized a new kind of gambling mostly because of peer pressure.
Pennsylvania is one of many states whose experience with gambling from 1963 to the present took the late political scientist Jack L. Walker’s benign phrase—”the diffusion of innovation among the American states”—and warped it into something different: “race to the bottom.” Walker, in an influential 1969 American Political Science Review article, described the spread of innovative policies from one state to others as the product of an early adopter’s example inspiring healthy imitation by additional states. In Walker’s main example, Wisconsin enacted workers’ compensation, other states came to regard it as a model for helping injured employees, and before you knew it, workers’ comp was the norm no matter what state you lived in.
Walker didn’t contemplate a less happy form of diffusion—nor had Justice Brandeis when he glowingly described states as “laboratories of democracy”—but it’s the lesser form that has spurred much of the national map’s spreading inkblot of legalized gambling. In the race to the bottom that transformed lotteries and casinos from nonexistent to normal features of American life, when one state legalized gambling to draw in bettors from its neighbors, the bordering states whose money began draining across state lines felt compelled to respond by legalizing gambling at home.
As Kansas governor John Carlin said when his state created a lottery, “Not having one when your neighbor has one is like tying one hand behind your back.”
In From Steel to Slots, Chloe E. Taft goes deep into Bethlehem, Pennsylvania’s recent experience with casino gambling. Bethlehem, long famous as the headquarters of Bethlehem Steel, once the third-largest industrial company in the world, is 1 of up to 14 cities that the Pennsylvania legislature granted a casino, whether they wanted one or not. Not surprisingly, Bethlehem and nearly all of the other 11 cities that currently have casinos are located near one of the state’s borders. Bethlehem, Taft points out, is closer to New York City than Atlantic City, as well as enjoying a direct pipeline to its casino by way of Interstate 78.
The Sands Casino Bethlehem is under the corporate wing of Sheldon Adelson, whose Las Vegas Sands Corporation (despite its name) does nearly 90 percent of its business in Macau and Singapore. Attuned by that experience to the love Asian (and Asian-American) gamblers have for games like midi baccarat and Pai Gow, the Sands Corporation created “a business plan for the Bethlehem casino [that] relies on busing in thousands of gamblers each day from New York’s Chinatowns” and the city’s New Jersey suburbs, where a large number of Asian Americans live.
Taft, a self-described “not-quite-outsider” in Bethlehem whose grandfather worked at “the Steel” and who currently is a postdoc in Yale’s American Studies program, is wistful without being sentimental about what casino gambling has done to the city. The steel company closed its last Bethlehem factory in 1998 and declared bankruptcy three years later, leaving many employees without work and retirees with shriveled pensions and health care. In a sense, Taft argues, the casino took the Steel’s place as a “postindustrial factory” that “like Bethlehem Steel . . . reaps profits while providing jobs and benefits for hundreds of area residents and contributing significant tax revenues and charitable gifts to the community.”
One big difference, of course, is the old factory made steel and the new one, at its best, manufactures entertainment.
As with gamblers, some states are winners and others losers in the casino game. New Jersey, a winner for as long as Atlantic City offered the only site for legal gambling outside Nevada, has become a loser: Its bankrupt high-rise casinos line the boardwalk like so many bad teeth. Pennsylvania has done well—so far. Last year, its casinos employed about 17,000 workers and paid $1.4 billion in taxes to help fund the state’s $30 billion budget—more than the casinos in any other state, including Nevada. In that sense, the casinos in Pennsylvania and other states are far better than their lotteries, which build nothing, employ hardly anyone, and put government into the business not just of permitting gambling but also of sponsoring and profiting from it.
But the same casinos that import money into a state from out-of-state gamblers export the crime, addiction, and personal bankruptcies that some losers at the tables and machines take home with them. And as Atlantic City’s experience indicates, luck has a way of running out. Pennsylvania’s experience with casino gambling may yet become a cautionary tale: New York (three new casino resorts in the works) and New Jersey (proposed casinos in the northern part of the state) are coming after it. The race to the bottom goes to the swift.
Michael Nelson, Fulmer professor of political science at Rhodes College, is the author of Resilient America: Electing Nixon in 1968, Channeling Dissent, and Dividing Government.
