Sin Cities on a Hill

How legalized gambling moved from the Strip to Main Street.

Greg Beato from the May 2006 issue

(Page 2 of 5)

Other forms of legalized gambling weren't faring much better. Progressive reformers aimed to cleanse cities and towns of institutions where "vice" was bred, and along with saloons one of their favorite targets was racetracks. At the turn of the century, the country boasted more than 300 tracks. In less than a decade, new anti-gambling laws reduced their number to 25.

Then the Great Depression prompted some state governments to reassess their prejudice against games of chance. In 1931, hoping to develop new revenue sources, Nevada legalized casino gambling. From 1933 to 1940, 22 states legalized racetrack betting. Illegal gambling flourished too, and some of these "underground" operations were as organized and as open as legal ones. In Hot Springs, Arkansas, full-blown Vegas-style casinos operated for decades. They hired entertainers such as Mickey Rooney to perform and attracted millions of visitors a year, even though gambling was officially illegal in Arkansas.

Likewise, church bingo was ostensibly illegal, but that didn't stop it from being the most popular form of gambling in mid-century America. In a 1941 Gallup poll, 24 percent of those surveyed said they regularly played; the total amounts wagered were so substantial that throughout the 1940s, '50s, and early '60s, politicians routinely floated the idea of legalizing bingo or reviving federal and state-sponsored lotteries in order to get a cut of the action. Finally, in 1963, New Hampshire created a statewide sweepstakes. For the first time in almost 70 years, the country would again have at least one legal lottery.

Entering the Mainstream

In one corner of Frank Fahrenkopf's office in downtown Washington, D.C., Old Glory hangs proudly on a six-foot flagpole. In another corner, a muted television set broadcasts Fox News. The walls are hung with pictures of Fahrenkopf posing with his old boss Ronald Reagan and his other old boss George H.W. Bush. As if that weren't benediction enough, there's also a photo of Fahrenkopf meeting Pope John Paul II.

After a stint as one of two conservative students at Berkeley's Boalt Law School during the era of the Free Speech Movement (former Solicitor General Ted Olson was the other), Fahrenkopf began his career as a trial lawyer and eventually moved into politics. From 1983 to 1989, he served as the chairman of the Republican National Committee. Today he is a co-chairman of the U.S. Commission on Presidential Debates and a board member of the International Republican Institute, which he founded in 1984. He's on the board of First Republic Bank and four other corporations.

For the last 12 years, Fahrenkopf also has been the president and CEO of the American Gaming Association. In that capacity, he tries to convince federal legislators that what's good for the commercial casino industry is good for America. Needless to say, he's no favorite among anti-gambling activists. They make cutting remarks about his fancy suits and his seven-figure salary. They paint him as a well-connected fat cat whose only concern is how to further enrich himself and his cronies. "Fahrenkopf is the best lobbyist money can buy," says Tom Grey, a Methodist minister and Vietnam vet who has been one of the most prominent voices in the anti-gambling movement during the last 15 years.

Grey and other gambling opponents often position themselves as populist underdogs battling well-heeled institutional elites. In true lawyerly style, Fahrenkopf insists he's really the underdog: "I always say, 'Tom, you're Goliath, I'm David. I only have casinos in 11 states. You have Methodist churches all over the country. You have an army of Methodist ministers that will follow you.'"

It's a clever way to spin the situation, but it doesn't make Fahrenkopf any less of a fat cat. Indeed, pretty much every object in his office—the GOP elephant statue on his desk, his photographic wall of fame, his natty blue and white suspenders—seem selected to project his status as an insider, a man who has been brokering deals at the loci of power for many years.

Other interest groups in the gaming industry have their own trade associations. Tribal casinos are represented by the National Indian Gaming Association. State lotteries are represented by the North American Association of State and Provincial Lotteries. But it's Fahrenkopf who generates the most ire amongst gambling opponents, and that's because he personifies the mainstreaming of gambling. Twenty or 30 years ago, a man of his pedigree with his connections would have thought twice about even doing business with gambling executives. Now he's their official representative. And pretty much everyone in Washington will readily take his calls.

Doesn't he realize it isn't supposed to be like this?

"Gambling is a vice which flourishes only in concealment," New York Tribune founder Horace Greeley editorialized in 1851. "By exposure it dies." That's the moral reformer's traditional perspective on "vice." Custodians of the public good invariably believe that because they find some activity objectionable, those who pursue it must feel the same way too, and thus be ashamed of their passions. Threatened with exposure, they'll choose abstinence instead.

This can be true. The porn industry didn't really take off until it became easier to obtain such wares in a private manner, first through videos and then through the Internet. But with gambling, the reverse has occurred: The more public it got, the more it flourished. As strong a tonic as concealment may have been in Greeley's era—according to an 1851 document prepared by the legendary vice hunter Anthony Comstock, there were more than 6,000 gaming establishments in New York City at the time—it turns out that when you draw back the curtains, advertise gambling via huge neon cowboys, and put a lottery machine in every grocery store, gambling flourishes even more.

According to Fahrenkopf, it was New Hampshire's 1963 decision to resurrect the lottery that really catalyzed a shift in public opinion toward gambling. "If [gambling] is morally wrong, my God, how can government be operating it?" he says, voicing the general sentiment that followed in the wake of New Hampshire's decision.

Not that the public needed much convincing. Today's gambling opponents often suggest that gambling has been pushed upon an unwilling public by revenue-starved politicians and their greedy industry benefactors. But in 1963, the ultimate decision of whether to introduce the sweepstakes was left up to the state's citizens. After the governor signed the bill, voters in every community were asked, in a special election, the following question: "Shall Sweepstakes tickets be sold in this city or town?" According to By Chance a Winner, the Reverend Hartley P. Grandin of the New Hampshire Council of Churches was certain that the state's "God-fearing" citizens would reject "this basically immoral legislation." Instead, more than 93 percent of the state's 200-plus communities voted in favor of the lottery.