US gambling laws have swung from tolerance to prohibition to legalization of certain games. Often it has been influenced by religious conviction, economic realities, law enforcement and lately, technology.
The first settlers in New England and the surrounding areas were Puritans who rejected all forms of gambling, although in some states attitudes toward certain card based games were more tolerant. During the 1700s the colonies, faced with financial difficulties, were given permission to sponsor lotteries. These lotteries would prove popular and the money raised from these activities were used to fund churches, public works and universities.
By the 1800s wagers on horse racing were gaining popularity, and taverns would often hold card and dice games, paving the way for the establishment of casinos. In Mississippi, gambling became a legitimate business venture, becoming a haven for professional gamblers. The shenanigans of some of these players would turn the tide against gambling in America.
During the mid 1800s several groups protested and lobbied against lotteries and gambling. Although the move led to the abolition of state sponsored lotteries, it did not eradicate gambling in America altogether; the activity simply went underground.
As US gambling laws tightened in the east coast during the 1840s, people began moving to the west, and together with the Gold Rush, led to an explosion in gambling in California. Just as quickly US laws were enacted against gambling in California, and a struggle ensued, with some professional gamblers backing certain political groups. Nevertheless by the 1900s gambling was illegal in most of the States except Nevada, which would be frequented by gamblers.
However the laws prohibiting gambling in America ended with the stock market crash in 1929 and the Great Depression in the 1930s. Believing that gambling would help revitalize the economy, states, beginning with Massachusetts, began relaxing its laws, starting with the decriminalization of bingo. This was followed by several pieces of legislation, in particular the California Horse Racing Act.
While legal gambling was making a comeback, there was also an effort on the part of the authorities to eradicate illegal gambling. The sweeping action in the east forced criminal syndicates to shift their gambling operations to the west, particularly in California and Nevada. When the police cracked down on the mob in Los Angeles, Nevada became the hotbed for gambling.
During the late 1940s casinos began to spring up in Las Vegas, most of them financed by mobsters. A Senate investigation in the 1950s uncovered the links between gambling and the mob, resulting in sweeping reforms in US laws against gambling.
In the 1960s and 70s economic and tax difficulties led some states, including New Jersey, to adopt measures legalizing casino operations and sponsoring state lotteries. In the 1990s the Internet radically changed gambling in America and the world, in ways never before imagined.
The battle currently ongoing in the halls of Congress regarding Internet gambling is far from being resolved, with factions from both sides determined to have their way. Where this will lead to, if a compromise on US gambling laws can be reached, cannot be answered right now.