Las Vegas, known as the gambling capital of the world, has a rich and complex history when it comes to sports betting.
From its early days of illegal bookmaking to the establishment of regulated sportsbooks, the evolution of sports betting in Las Vegas reflects broader trends in American gambling culture.
Early Beginnings
Gambling was legalized in Nevada in 1931, providing a foundation for various gaming activities, including sports betting. However, for many years, sports betting was largely dominated by illegal bookies and small turf clubs. These establishments operated independently from the burgeoning casino scene and were often run by colorful characters, including mobsters.
In 1949, Nevada made a significant move by legalizing sports betting. This decision allowed licensed bookmakers to accept bets on professional sports, including football, basketball, baseball, and horse racing. The first government-sanctioned sportsbook opened during this period, marking the beginning of a new era for sports betting in Las Vegas.
The Federal Tax Impact
The landscape changed dramatically in 1951 when the federal government imposed a hefty 10% tax on all sports bets made in Nevada. This tax was levied on the total amount wagered (the "handle"), not just on profits. As a result, many legitimate sportsbooks struggled to survive and some were forced underground. To circumvent this tax burden, bettors and bookmakers devised creative strategies; for instance, bets would be recorded for a fraction of their actual value.
It wasn't until 1974 that the federal tax was reduced to 2%, which revitalized the industry and encouraged more sportsbooks to operate legally within casinos.
Read: How Do Odds Work in Sports Betting?
The Rise of Casino Sportsbooks
With the reduced tax rate, casinos began to embrace sports betting more openly. In 1975, Jackie Gaughan opened the first sportsbook inside a casino at the Union Plaza Hotel. This marked a pivotal shift as sportsbooks became integrated into the casino experience rather than existing as separate entities.
The following year saw the introduction of modern sportsbook designs pioneered by Frank "Lefty" Rosenthal at the Stardust Hotel. His sportsbook featured multiple large screens and comfortable seating—elements that have become standard in today’s sportsbooks.
Evolving Regulations and Popularity
As interest in sports betting grew, so did regulatory changes. By 1983, the tax on sports betting was further reduced to 0.25%, making it even more attractive for casinos to offer these services. This led to an explosion of sportsbooks across Las Vegas, with most major casinos establishing their own betting operations.
The popularity of sports betting continued to rise throughout the late 20th century and into the 21st century. The advent of online betting platforms further expanded access to sports wagering, although traditional brick-and-mortar sportsbooks remained central to Las Vegas’ identity.
Recent Developments
In recent years, significant changes have occurred at both state and federal levels regarding sports betting regulations. The Supreme Court’s decision in 2018 to strike down PASPA (the Professional and Amateur Sports Protection Act) allowed states across the U.S. to legalize sports betting if they chose to do so. This landmark ruling has led to an explosion of legal sports betting options throughout the country while solidifying Las Vegas’ status as a premier destination for bettors.
Today, Las Vegas boasts some of the most advanced sportsbooks in the world, featuring state-of-the-art technology and luxurious amenities. The integration of professional sports teams into the city—such as the NHL's Vegas Golden Knights and NFL's Las Vegas Raiders—has also contributed to a vibrant sports culture that complements its long-standing gambling heritage.
The history of sports betting in Las Vegas is a testament to the city’s adaptability and resilience. From its early days as an underground activity to its current status as a major attraction within casinos, sports betting has evolved alongside changing regulations and public perceptions. As Las Vegas continues to embrace new trends in gambling and entertainment, its legacy as a leader in sports betting remains firmly intact.
