Since time immemorial, humans have been gambling beasts. Taking risks is a form of thrill, and few things are more thrilling than gambling. The governments of most nations have strict gambling laws within their territories, so some clever scofflaws have devised ways to gamble legally—by moving the casinos onto the water.
A Brief History of Gambling
Thousands of years ago in the Mesopotamia region, groups of humans used marked knucklebones of animals for the purposes of divination. Practitioners cast these primitive dice, noted the markings, and made declarations and predictions based on the results. As a practical side effect, these tools of chance would later be used for wagering. The practice of ‘rolling the bones’ was also widespread in China from around 1000 BC, where gambling houses offered wagers on dice and bets on fighting animals.
As human societies progressed, governments got involved in the process, as much money was changing hands. This particular human behavior held the potential for taxation. However, as many early human governments had religious elements insinuated into them, the ‘sin’ of gambling was said to be fueled by greed, one of the 7 Deadly Sins. As a result, gambling was frowned upon—and heavily regulated—by cultures from East to West. But as governments have yet to fully acknowledge, certain human behavior cannot and will not be regulated easily.
Gambling laws were enforced in the same way as any other laws, by prohibiting the operation of casinos within the governed territory. In the United States, decisions which directly affect each state are made by the individual states rather than the federal government. Most of the 50 U.S. states have historically opposed casinos and gambling, with a few exceptions.
Nevada is the classic example of legalized gambling, as evidenced by the huge gambling mecca known as Las Vegas. After the silver mines in Carson City and other regions of Nevada had dried up, the state suffered from a major loss in revenue. Farming wasn’t viable in the desert, and huge portions of the state were practically uninhabitable by modern standards. But a certain desert oasis with natural artesian springs flowing under it became the site of one of Nevada’s few cities: Las Vegas (‘the meadows’ in Spanish). Las Vegas was established in 1905, but by the 1930s, gambling was in full swing in the desert oasis.
Atlantic City, New Jersey, is another famous exception to the gambling laws governing most U.S. states. Originally built as a family resort along the New Jersey coast, failing revenues throughout the 70s lead to a change in gambling laws. Casinos were legalized for the first time, and business boomed. When most states banned gambling, most gamblers started traveling to places where casinos were legal. This resulted in gambling tourism, which was very profitable for the few gambling meccas available.
Other famous international exceptions to gambling laws include Macau and Monaco. Both territories exist as independent governments outside of the control of France and China, respectively. Gambling in the world famous Monte Carlo was a result of a decision by Monaco royalty to boost their declining revenues. When the colony of Macau was handed back to China by Portugal, it retained independent status, which included the ability to establish legal gambling.
Of course, illegal casinos and speakeasy bars were rampant during Prohibition, when alcohol was illegal in the U.S. from 1920-1933. Naturally, some speakeasy bars took advantage of their hidden back room bars to offer card games and other gambling action. But this didn’t last forever, as changes in liquor and gambling laws came into effect in a few states.
A Legal Loophole: Gambling on Water
Naturally, speakeasies and illegal card rooms were subject to frequent raids by the federal government, as the FBI was tasked with leading the fight against illegal alcohol consumption. They also had the power to enforce anti-gambling laws across state lines, thus enabling them to fight the organized crime groups which had sprung up to profit from bootlegging and alcohol sales. But as with any law, loopholes can be found under the right scrutiny.
As legal countries, states, and other territories occupy dry land, the largest legal loophole involved water. Maritime law, also known as admiralty law, governs all vessels and sailors of those vessels. These laws cover any and all transport and trade activities taking place on oceans, seas, and rivers which flow between multiple territories. Maritime law covers international waters, and the large regions of ocean between countries and continents; this law allowed for the creation of the first casino boats in history.
Casino Cruises and the Open Seas
After the discovery of the important loophole afforded by maritime law, gambling ships started appearing off the shores of California during the Prohibition Era. All these boats had to do was sail offshore a few miles, and they could drink and gamble the night away. One of the first of these boats was the lumber schooner Johanna Smith, a converted gambling ship which was moored off Long Beach from 1928, until it caught fire and sank in 1932.
Not long after the first gambling boats appeared, organized crime families started buying them up and setting up casinos. In the 1930s, the mob influence on gambling stretched from Atlantic City through Las Vegas, and soon found a new home off the sunny shores of California. LA Mafia boss Jack Dragna bought the barge Monfalcone and offered gambling off the Long Beach coast. This ship sank only 2 years later from a fire onboard.
Several other gambling ships operated off the California coast over the following decade. Offshore casino boats suddenly faced a crisis when President Harry Truman signed an act in 1948 which prohibited gambling ships in U.S. territorial waters. Individual states also argued the legal ramifications of gambling boats. In New York City, several mayors stated that it wasn’t enough to sail 45 minutes offshore to gamble; these boats could not return with gambling paraphernalia.
In the end, the laws proved unnecessary, as the time and costs of transporting boatloads of gamblers on and offshore proved unreasonable for most casino boat companies. But that didn’t stop luxury cruise ships from cashing in. After the advent of the airplane ended the need for ocean voyages between countries, the pleasure cruise came into practice. Now people could sail around the Mediterranean or Caribbean seas on luxury cruise ships. Naturally, some of these ships offer casino cruises with full onboard gambling options. As they sail primarily in international waters, they are exempt from local gaming laws.
From the 1800s, beautiful paddlewheel riverboats plied the Mississippi River through several states, providing transport and commerce. By the 1900s, railroads largely replaced riverboats for commercial transport, but these elegant beauties still offered pleasure cruises for passengers. Naturally, some of the riverboats also took advantage of the long journey by offering passengers access to the gaming arts. These floating casinos are the first example of casino boats operating inside the borders of America.
At first, riverboats only had to be floating on water to allow gambling. But these laws became stricter, and boats soon needed to leave the docks on a journey to another state. In addition to legal problems, riverboats began to attract cheats and cardsharps who would rob the passengers. At first the cheaters were dealt a harsh hand—by hanging them. Eventually, riverboat casinos became illegal, and would remain so until the 1990s.
The Mississippi River bisects the U.S. from North to South across several states: Illinois, Indiana, Louisiana, Mississippi, and Missouri. Each of these states benefit from taxing revenues from casino boats based on their home ports. The only legal requirement was for the boats to be able to sail away from the dock. Most of them did not actually set sail, which led to legal battles, compromises, and more regulations regarding gambling. Some cheeky casino operators even avoided the boat requirement altogether by building river casinos on stilts, which merely hovered over the river surface. Others merely sat in the backwaters adjacent to rivers, and were called ‘boats in moats.’
One legal requirement with aesthetic benefits came into play. Riverboat casinos must be made from historical paddlewheel boats, or replicas of boats from that era, and must hold at least 600 passengers. This kept a touch of elegance to the floating casinos, and also prevented every rube with a fishing boat from opening his own casino.
New Gambling Frontiers
As governments have fought gamblers over the ages, one thing remains constant: people like to gamble, and they will find creative ways to do so. And the casino loopholes don’t end with riverboats or cruise ships. Tribal gaming has also exploded in the past decades, due to the very real fact that Indian reservations are not state land, but independent parcels of federally-allocated land, subject to their own tribal governments. As a result of some creative legal loopholes, hundreds of tribes opened tribal gaming casinos all over the U.S.
But the final frontier of casinos is not outer space. It’s cyberspace. Online casinos continue to offer gamblers thousands of games to play online for real money. And whether you like slots, cards, roulette, or keno, there’s always a safe place to engage in the thrill of playing games of chance.