Abstract

Introduction: Ubiquities of Our Lives
In late 1989, International Gaming and Wagering Business Magazine held a gala dinner and ball at Caesars Palace. 1 The event was in honor of the first year's inductees for the magazine's Gamblers Hall of Fame. Steve Wynn was honored several years later. However, on this evening, he was present to make an induction speech on behalf of the late Jay Sarno. 2 Sarno had given an enhanced attention to the Las Vegas Strip in the 1960s, as he had developed two of the first “themed” casino resorts. First, he had built Caesars Palace with magnificent outdoor fountains and Cleopatra's barge amidst statues and Roman architecture. Next he built Circus Circus with its tent, trapeze acts, and midway of arcade games. 3 Sarno had liked the younger Wynn and they became friends. Wynn related a conversation he had with Sarno years before. Wynn had taken over control of the Golden Nugget casino in what was a somewhat rundown downtown Las Vegas. Wynn decided to bring some glamour to the neighborhood. He replaced a gold medal and neon motif with exquisite marble and golden fixtures. He was quite proud of his elegant creation. He took Sarno downtown and with great pride he showed him the casino with its new look. Wynn recalled that “Jay Sarno looked at me and sighed, saying, ‘Yes Steve, ya gotta nice exterior, ya gotta nice sign. But Steve, Steve, ya gotta do something with waaater.’” Wynn who was just about to open his Mirage with its waterfalls, looked skyward toward the chandeliers and said, “Jay, Jay! I got the message.” 4
Of course, over the next decade Wynn went on to build the Treasure Island next door to the Mirage, featuring a small lake with two floating ships which staged mock battles. 5 He topped this with his Bellagio and its large lake with 375,000 square feet of water and massive fountains shooting water 460 feet into the air in dancing sprays accompanied by the music of Boccelli, Sinatra, Sarah Brightman, and Michael Jackson. 6 Indeed, Mr. Sarno, Steve Wynn had done something with water. He has clearly demonstrated that water and gambling fit well together. 7
The Bellagio fountains, among the largest in the world, have been featured on many television shows. 8 On February 18, 2015, the Public Broadcasting System showed the Bellagio fountains during their description of the water system that had developed in ancient Petra, a desert community in what is today the country of Jordan. 9 In Petra, like in Las Vegas, water had seemingly turned a desolate location into of place known for great prosperity and wealth. The waters on the Las Vegas Strip were like those in ancient Petra, an anomaly. While Petra was known not for gambling but rather for its many spices, its waters were attractions for people seeking recreation. 10 Similarly, through the centuries, many otherwise desolate locations came to feature water recreations. In Renaissance Europe, spas developed where warm waters bubbled to the ground. And along with bathing pools and spas came the continent's first casinos. Even today, casinos are found at Spa and Chaudfontaine in Belgium; Baden Baden, Bad Kissingen, and Wiesbaden in Germany; and Niederbronn-les-Bains, France. 11
This article does not deal with waters that surround what are known as land-based casinos. Rather, it deals with the association of gambling and larger bodies of water—rivers and seas.
Water, water, everywhere, and so are two dice to roll. Two ubiquitous factors surround our human existence. We live on an Earth that is covered by water, and we live as a species that has from the dawn of civilization known and participated in games which encompass gambling. 12
Water, despite its apparent chemical simplicity, is the most mysterious of substances found on earth. It is also pervasive. Water is everywhere, covering 71% of the world's surface. 13 Of this water, 96% is saline, with 95.5% of the water being in the oceans. 14 Most of the Earth's fresh water is found stored within the Earth. Also water is an element found in every living creature. 15 Plants are 90% water, while animals are 75% water by weight, with 70% of the human body being liquid or water. 16 Water holds almost magical qualities including the ability to capture and hold as well as propel outwards molecules of living bodies that come into bodies of water. The molecules in water may serve to preserve the life history of places on the Earth. 17
Water is recognized as a universal agent for cleaning, 18 as is recognized in religions and belief systems everywhere. 19 All major religions have some form of baptism wherein members are dipped in water or have water spread over them—poured or sprinkled—as a sign that they wish to be pure in body and soul. 20 Baptism is sometimes performed at a large body of water: for example, Hindus submerge their faithful in the Ganges River. 21 Ritual submersion takes place during six special days of the year. 22 Many religions, including most Christian sects, adhere to the notion that a child is born into sin—original sin. This burden we all have may be cleansed away through a ceremony of baptism, with sprinkling or immersion into special holy water. 23 As Muslims consider all water to be a gift from God (Allah), ceremonies of baptism—called ablution—may take place with any water. 24 Rituals of religious washing also occur every week of the year. 25 Buddhists do not uniformly follow rituals of baptism, but the practice of baptizing babies into Buddhism is followed many places. 26 The notion of placing one's hands into blessed waters and touching one's forehead is widely practiced as the faithful enter into holy places for times of prayer. The notion—followed in Roman Catholic churches everywhere, as well as Shinto shrines—is considered an act to purify the soul at time of giving praise to God and asking for God's blessings. 27
The nature of water has been crucial in the development of human civilizations, which has been very dependent upon the ability to move over the surface of the earth in search of shelter, as well as food to sustain living. 28 Major migrations of populations have been aided by the fact that the waters of the earth constitute the major highways for movement of people. 29
These populations have, from their earliest times, enjoyed games which have included the elements that constitute what is known as gambling. 30 There was gambling even before mass migrations of people occurred. 31
Indeed, Adam and Eve may have been the earliest gamblers. 32 The book of Genesis tells their story. They were given a command by God not to touch a sacred tree of life, but when a prize—an apple—was placed in front of them, they gambled that they could take it without losing their innocence. They were wrong, and as a result of their gamble, they had to leave the garden of paradise and roam the world, knowing pain and confronting death. 33 As water is ubiquitous so, too, is the human activity of gambling. With very few exceptions, each society from that of Adam and Eve down to the present day has known of some form of gambling behavior. 34 Contrary to the quest for purity found in religions, however, participation in gambling is most often viewed as a behavior that brings impurity to people. Most religions, at least in the modern era, have frowned upon gambling and either condemn or discourage the activity. 35 Some—for instance, Muslims, as well as members of some Christian churches, such as Baptists—take an absolutist view that the sinful activity must be condemned at all times and in all places. 36 Other faiths, including Buddhism, Hinduism, and other Christian groups like Presbyterians, preach moderation. 37 Roman Catholics set conditions which determine if gambling is permitted: e.g., games must be honest and proceeds from games must go to “good causes.” 38 These religious factors contribute to laws either regulating or prohibiting gambling. Government laws and rules on gambling are an important factor relating to gambling on navigable waters, as land-based laws sometimes apply to gambling on the waters. 39
While boats or ships in primitive societies and in early civilized societies actively aided movements of people as well as of goods in commerce, gambling activity was rare aboard these vessels. The first ships were developed in ancient Egypt around 4000 BC. 40 Made of reeds, they sailed on the Nile River. The development of wooden boats followed quickly after, and by 2500 BC, Egyptian vessels were capable of crossing oceans. 41 Waterways provided natural highways for travel and transport of goods to far corners of the Earth. 42 Boats could also provide for movement of troops in wars. 43 By 2000 BC, ships were guided by wind hitting their sails. 44 While the wheel may or may not date to earlier eras (some date the wheel to the Sumerians in 6500 BC), their effectiveness as devices to propel land vehicles was considerably less as the vehicle with wheels demanded roads that had to be built—and were expensive to build. 45 Moreover, roads could not be built over large bodies of water. 46
While boats and ships proliferated in early societies, they were not places for gambling during early eras. 47 First of all, they were very small—not enabling people to gather face-to-face in groups to participate in games of chance. 48 Secondly, the boats and ships demanded the full concentration and full energies of those people on board. 49 Often, crews had to pull on oars to propel the boats. 50 They also had to perform work tasks involving controlling sails for propulsion by the winds. 51 The literature of ship development, as well as the literature on the creation of games of chance, does not carry references to gambling on early vessels. 52
While not confirmed with hard evidence, one of the earliest references to gambling at sea involved the three ships under the command of Christopher Columbus on his first voyage across the Atlantic Ocean in the quest to find lands of India—a quest that ended when he found lands of North America. 53
A widely circulated notion (which may be mythical for the most part) suggests that the crews of the three ships used by Columbus during his first voyage to America participated in card games while on the Atlantic Ocean. It is believed by some that the crews—there were 41 on the Santa Maria, 26 on the Pinta, and 20 on the Nina—became very worried as the voyage was taking longer than they had anticipated and they were not seeing land when they had expected. 54 Crew members were religious, and some thought that maybe they were being punished by God for participating in gambling activity that could be considered sinful. As a result, they threw their cards overboard into the waters. The next day land was sighted. 55 It might be suggested that their religion was not too deeply held, as rumor or myth indicated that one of their first activities on land was to find large leaves from trees, and out of these leaves, they made new playing cards so that they could return to their poker-like games.
Had they been gambling, the story might indeed be true. 56 They were religious and their Admiral, Christopher Columbus, was adamant in biblical studies and in actively praying several times a day. 57
The voyages of Columbus were quickly followed by other voyages and created much interest in oceanic commerce. Columbus lost one of his ships—the Santa Maria—before it could commence its voyage of return to Spain. The wreck of the Santa Maria, while it did not result in human fatalities, did certainly point out risks involved in ocean travels. 58
A few centuries after Columbus made his voyages to the new world, a more widespread form of wagering on board ships began. Insurance has often been compared with gambling, although the factor of risk is quite different with the two activities. Insurance is a product that is designed to minimize risks that can be destructive to wealth, while gambling purposely introduces a risk where none existed before. Nonetheless, a purchase of insurance, like a gamble, may be viewed as a wager on an unforeseen event occurring. 59
In 1688, the insurance industry began in a major way at Lloyd's Coffee Shop on Tower Street in London. 60 Here, at this spot, it could be said that serious gambling on ships started. The shop was a general meeting place for ship owners, sailors, and operators, along with merchants. 61 They were responsible for shipments that went to the far corners of the Earth. Many were involved in the slave trade, and with each ship sailing, they were risking great amounts of wealth, as ships might not successfully complete voyages, or many of the human cargo could die from disease or calamities resulting from mistreatment. 62 Entrepreneurs kept close track of all impending shipments, and for a fee, they listed them on a board at Lloyd's. 63 Other businessmen would examine the boards and if they had confidence that the shipment would be safely made, they would “underwrite” their name on the list—hence insurance agents became known as “underwriters.” The activity at Lloyd's led to publications of shipping news carrying details about commerce on seas throughout the world. 64
This article seeks to examine a particular kind of commerce occurring on seas and other waterways. The focus is upon the waters of the Americas and oceanic cruises and on gambling taking place over the modern era—essentially the last two centuries. During this time frame, steam propulsion was made available for ships. 65 This enabled vessels to become much larger and to carry much larger shipments, as well as greater numbers of people—both as crews and as passengers. Added space enabled ships to not only have regular passenger service but to provide passengers with amenities and activities to occupy their time during voyages. Gambling came to be one of the major activities. 66
The initial section examines the laws of the seas and waterways and how they impact gambling operations. An added note is presented on air carriers. While not in the seas as such, airplanes fly over the seas and offer an extra consideration for offering and regulating gambling activity. The second and third sections explore gambling activity on boats that cruised on the rivers of America, starting in the early 1800s. One section focuses upon Mississippi River gambling in the 1800s, while the next skips to the contemporary era of riverboat gambling which began with the legalization of casino ships on rivers adjacent to the state of Iowa in 1989.
The fourth section looks at major cruise ships that offer casino gaming on international voyages, and this is followed by the fifth section, which examines ships that remain stationary in international waters and also ships that take “cruises to nowhere”—that is, cruises that go beyond international boundaries and then return to shore. While at sea, they have casino gaming. A feature of ocean cruises is a close look at companies such as Casinos Austria, which provide staffing for casino gaming at sea, as well as a general survey of ship companies. Stationary ships and those that take cruises to nowhere dominated the American gambling scene, particularly in California in the 1920s through the 1940s, followed by a time of inactivity, only to return in the 1990s to Florida and several East Coast ports. A concluding word also considers a very prevalent form of illegal gambling that permeates almost all shipboard activity on military voyages—that is, gambling by navy personnel.
L. Laws on and Over the Seas (and in the Air)
No nation owns the ocean, although in the past, several made claims over the seas. In the fifteenth and sixteenth centuries, colonial powers such as England, Portugal, and Holland, claimed to have legal domination over large areas of the high seas, much as the Roman Empire had expressed full sovereignty over the Mediterranean Seas. 67 Portugal asserted dominion over large area of Asian waters, while Holland and England both claimed control over the North Seas and a wide path of waters extending around the British Isles. 68 Even today, China has renewed claims to sovereignty over large portions of the South China Sea. 69 Inevitable disputes led to the formulation of doctrines pertaining to the law of the seas.
Critical in creating today's understandings of the laws was the work of the seventeenth century Dutchman, Hugo Grotius. Grotius espoused the doctrine of “freedom of the seas” in his theory of international law. 70 In the twentieth century, the law of the seas received greater clarification, with the establishment of new international bodies, such as the League of Nations and, later, the United Nations. 71 Nonetheless, disputes still arise over which nations have sovereignty over different parts of the seas. Modern threats of global warming have resulted in new pathways for shipping that did not exist before. Nations which had domain over the former lands on these pathways sometimes wish to keep that domain by restricting ships of other nations from using the pathways. Such disputes are usually resolved in bilateral agreements between the nations involved. 72
Issues concerning mineral deposits, fishing, and gambling must usually be resolved by turning to the law of the seas. 73 Critical to our understanding about gambling at sea is the notion that a nation may set down rules of behavior onboard ships that sail under the flag of that nation. 74 However, even that hard and fast finding may change depending upon the exact location of the ship. While ships enjoy freedom to navigate oceans freely, behavior on ships can be controlled by countries other than those providing registration and flag status to a ship. 75 The Earth's surface waters engulf the land masses of all countries in a continuous fashion, yet each country is limited in the control it has over the waters. Some internal waters consisting of lakes and rivers may be for legal purposes totally unconnected to the seas. In most cases, they contain only fresh waters. Nations usually retain full sovereignty over activities on these internal waters. 76 In countries such as the United States, the authority over the waters may be shared among subordinate governments within the larger nation: ergo, among different states. 77 A division of control may be agreed to by the subnational governments. Two governments, for example, Iowa and Illinois, may agree to a precise boundary point dividing the states’ authority over the Mississippi River. In some other cases, internal waters may touch two separate nation states—as most of the “Great Lakes” (all but Lake Michigan) border both Canada and the United States. The two countries agree to a precise borderline dividing their authority. 78
The major thrust of International Sea Laws applies to zones that divide what is known as the High Seas. The High Seas that directly border countries are divided into several zones. First, the waters that touch the coast are called territorial waters. 79 The coastal nation has full sovereignty over a territory from the low water mark to a distance of twelve miles. 80 In some cases they yield authority beyond three miles for some purposes. 81 This is typically in cases involving jurisdiction over gambling activities. A coastal country has both criminal and civil jurisdiction in its territorial waters, as well as control over minerals and fishing rights. Ships carrying flags of other nations will in most cases have rights of free movement in territorial waters of another country. However, the ships must abide by rules of passage established by the coastal state. They must not present any threat to the coastal state. 82
Beyond the territorial waters, a coastal state has dominion over 200 miles outward from the low water mark in what is called its Exclusive Economic Zone (EEZ). 83 The EEZ and the continental shelf area have natural resources that are managed by the coastal state. There is no coastal state control over gambling in the EEZ beyond territorial waters. 84
Air flights over waters are subject to the similar types of rule as are ships. If a flight is over land, the rules of the nation below are fully enforced as if the aircraft were on the land itself. Similarly, if a flight is over territorial waters, a coastal state may maintain some jurisdiction, but basically loses that control when the flight is beyond that space. 85 As flight rules are closely regulated on an international basis, there is little controversy in this area. 86 Gambling activities have presented issues for discussion, and they have not been fully resolved. 87 Most countries allow gambling on flights to be under the control of the flag country of a plane once the aircraft is beyond territorial waters. The United States presents an exception that remains, yet could be challenged. 88
In 1962, an act of Congress prohibited aircraft flying under a U.S. flag from conducting gambling activity aboard international flights. 89 However, under the act, a foreign flag carrier could allow passengers to participate in games. 90 When Northwest Airlines sought to erase the 1962 prohibition for all flights into international space, Senator Slade Gorton of Washington State reacted by proposing that the ban apply not only to American flag aircraft but to all aircraft on international flights into or out of the United States. Moreover, Gorton's 1994 amendment prohibited all such aircraft from even carrying gaming devices. The amendment did pass. 91 Other nations vigorously objected to the ruling, claiming that their sovereignty over flights in international space—over the high seas—was supreme and not subject to laws of the United States. Foreign airlines created the International Coalition on the Rule of Law opposing the 1994 amendment—to no avail. 92 While most legal authorities agree that the U.S. law cannot apply to these flights, there has been no change in the 1994 law.
A study of the effects of having gaming on flights was authorized by the 1994 amendment. 93 The study found that gaming could be conducted safely on flights, and that players would not pose risks on flights, nor inconveniences to other passengers. Moreover, it was found that gaming could add substantial revenues to the airlines. 94 These findings notwithstanding, as indicated above, no changes have been made in the law.
The first gambling activity aboard a commercial aircraft probably occurred in 1981, on a Singapore Airlines flight between Singapore and San Francisco. 95 Six slot machines were placed at the rear passenger area of a Boeing 747. 96 As the experiment did not meet profit expectations and also seemed to be adverse to the business image of the airlines, the gambling ceased after only two months. 97 It was also found that the many passengers lining up to play caused extra weight at the back of the plane, making pilots altering the “trim” of the plane to maintain level flight. This also led to a use of extra fuel. 98
Israel faced demands for legalized gambling; however, opposition was strong. One response was a proposal to have a casino on an airplane. In May 2002, the Maariv daily newspaper in Israel indicated that the transport ministry had authorized a Boeing 747 to be operated by Icelandic airlines with a casino aboard. 99 Israel investors were prepared to use as much as $30 million to convert the jumbo jet, which would make four-hour flights with 230 gambling passengers from Ben Gurion airport out into Mediterranean skies and then back. 100 Much like “cruises to nowhere” discussed below, these aircraft would be having “flights to nowhere.” Even though the proposal received approval of the transport ministry, the plan was rejected due to objections of the government's legal advisor and the Israeli Supreme Court. 101
In 1998, a Swiss Air flight crashed in Nova Scotia. The flight was going between Geneva and New York City. Swiss Air had a special exemption from the Gorton Amendment. All 229 passengers and crew members were killed. 102 The crash was caused by a fire that originated in equipment used for an entertainment system. Overheating may have come from video screens and the power needs of the system. Among the entertainment offerings on board were computer casino games that took wagers from passenger credit cards. 103 The accident severely curtailed interest in gambling activities. 104
Other airlines have made plans for inflight gambling, but as of this time, none have implemented them. 105 In 2004 Ryanair, which does not fly into or out of the United States, announced plans for passengers to gamble on an online gambling system. Airline officials suggested that with gaming revenues, costs of tickets for flights might be eliminated. Talk continued for a decade without action being taken. 106
2. Types of Games and Gambling on the Rivers (Early Era)
A basic consideration in evaluating gaming, whether on waters or high above waters, is the nature of the games being played. The essential observation is whether the game or games are player-banked games or house-banked games. 107 Gambling occurs when games involve the placing of a wager (called consideration) by a player on the hope that some event that involves a risk (or a factor of randomness) will take place. 108 If the event happens, the person making the wager is a winner and is awarded a prize that has value.
In a player-banked game, the money wagered by one player is placed against that wagered by another, with one of the players declared a winner if an event occurs, but if it does not, the other player is the winner. 109 Games involve two or more players. Prizes consist of the total money wagered. Where there are many players (for instance, in a game of poker), all money wagered is placed into a central pool which is given to a single winner at the end of play. 110
Almost all players on the early riverboats that sailed on the Mississippi and other American rivers in the nineteenth and early twentieth centuries engaged in player-banked games. 111 House-banked games dominated the play found on the riverboats that conducted gaming in a later period that began in 1990. In general, a house-banked game is conducted by an organization, be it a casino, a lottery, a charity, or a boat or ship. In the game the players oppose the gambling organization, and put forth their wagers in money. Unless there is a tie in the play, either the player or the organization wins all of the money wagered by all the players and also by the house (which matches players’ wagers). 112 Most casino games (including most games on latter-day boats and ships) are house-banked games. These include blackjack, roulette, craps, baccarat, and slot machines. 113
Player-banked games are structured so that the odds of winning are the same for all the players. A person usually sets up the game, but that person has no advantage when the game is played according to the rules. For this reason, there was very little incentive for setting up and running games on the early riverboats. 114 However, there was a demand among players for the games. They were drawn into play with hopes of being winners. 115 The hopes had a degree of realism, except for one thing: the person running the game knew he could win only if he cheated—and so he did. 116
New Orleans played a major role in the development of riverboat gambling in America. 117 The French, and before them, the Spanish, had controlled New Orleans and the entry way to the Mississippi River Valley prior to the Louisiana Purchase in 1803. After that date, the United States gained sovereignty over the city and the river as well as its major tributaries—the Red River, Arkansas River, Ohio River, and Missouri River. Americans began to freely use the rivers for commerce. River transportation became the dominant means for holding the new expanding nation together. 118
New Orleans had become a major seaport and a place for the development of a variety of sin industries. 119 Gambling haunts were prevalent under the French. The American political presence brought many more customers for the gambling interests, but also made gambling on the rivers themselves a feasible commercial venture. 120 The initial expansion of gaming for river-going passengers was delivered in taverns and dives that blossomed in newly growing river towns, such as Natchez, Vicksburg, Memphis, and St. Louis. 121 However, land-based residents of the towns soon tired of the corruption brought by the gamblers from the riverboats. Crackdowns by legal authorities and vigilantes caused gamblers to reconsider their locations. 122 As new boats accommodated larger numbers of passengers and more cargo, the gamblers moved operations from the shores to the decks of the boats. While the initial boats had been too small for games, a new-style boat appeared on the rivers. 123
In January 1812, Robert Fulton ushered the steamboat era onto the lower Mississippi River. 124 His first boat, called the New Orleans, operated until it sunk and was replaced by the larger New Orleans II in 1815. This steamboat was 140 feet long and 28 feet wide. It had room for 50 passengers. Women were segregated. They were confined to a cabin on a lower deck, while men could roam the top deck and engage in various games. The boat travelled at 10 miles per hour, and could carry 200 tons of freight. 125 Generally, passengers from the upper Mississippi brought cotton and other agricultural goods to New Orleans for sale. In New Orleans, they were given cash which they took on their on trips back north. On their northward voyage—which was naturally slower, because of the river currents—they were vulnerable to a variety of sins offered by the boat operators as well as by various independent scoundrels—including drinking, prostitution, and gambling. 126
By 1820, there were 69 steamboats on the Mississippi and other rivers—the Ohio, Arkansas, Tennessee, and Red. The number of boats kept rising—expanding to 557 in 1845, and 735 in 1860. 127 Gambling activity expanded as well, up to and even through the Civil War years. 128
The operators of the boats furnished a place for games, kept the liquor flowing, and also participated in selling cards and other objects of the games played. But they did not participate as a party in the playing of the games. They were not gamblers. The captain as a general rule was not concerned about the integrity of the games, but rather about keeping the peace among all the passengers. 129 He—and crew members—would throw off players only where they made a disturbance—perhaps when they cheated, or when there was a violent confrontation over the results of a game. 130 There were no law enforcement officials on the boat, although on occasion, the captain might detain an unruly passenger and hold him until the boat stopped in a town where he could be delivered to the sheriff. 131
There was cheating. According to the Time-Life series on the Old West there were at least 2,000 gamblers on boats by the mid-nineteenth century, and “99% of them, either occasionally or all the time, did cheat.” 132
The most popular games were poker and the shell game known as three-card monte. 133 The latter was a sleight-of-hand movement game. Poker was played with dealt cards and even odds between the dealer and the player. In this case, cheating became the only “sure way” by which a dealer could make money on his investment of time and transportation costs. 134
The most direct account of early gambling on the rivers is provided in George Devol's autobiography, Forty Years a Gambler on the Mississippi. 135
Devol's escapades extended to the tributaries and also the shores of that great river. He was born in Marietta, Ohio, in 1829, the son of a ship carpenter. 136 Exposed as a child to the crews of river vessels, he got the urge early on to make a life on the river. He often played hookey from school to mix and mingle with the river travelers, and at age ten, he jumped aboard an Ohio River steamer and was given a job as a cabin boy. 137
The reader is treated to one adventure after another. Basically, the stories are presented in chronological order: rambling accounts of winners and losers, cheaters of one type or another, and other characters that Devol passed by on his life journey. By the time he was eleven years old, he was stealing cards and he practiced until he could cheat with the best of them. He soon became involved in the games, and the games often involved thousands of dollars. By his account, he had won “hundreds of thousands” of dollars while still a teenager, taking advantage of paymasters and soldiers on river jaunts during the Mexican War. 138
George Devol was a good fighter too, as many stories were about the fights he engaged in, and often the narrow escapes from mortal danger. Remarkably, he survived until he was an old man who could sit and reminisce about the good ol’ days.
Devol became a philosopher in his old age—a philosopher of gambling. Toward the end of his tome, he related that Thomas Hobbes said that “man is the only animal that laughs.”
139
Writes Devol:
He might have appropriately added, he is the only animal that gambles. To gamble or venture on chance, his own property with the hope of winning the property of another is peculiar to him. Other animals in common with man will fight for meat, drink, and lodging, and will battle for love as fiercely as the old knights of chivalry; but there is no well authenticated account that any of the lower animals ever wagered any of their property on “odd or even,” or drew lots for choice of pasturage. No master has ever yet taught his dog to play with him at casino, and even the learned pig could never learn what was trumps. Hence gambling is proof of man's intellectual superiority.
140
In Devol's adventures, the gambler was led to cheating as it was the only way to guarantee winning. The works of two earlier philosophers—Garolamo Cardano (1501–1576) and Blaise Pascal (1623–1662)—established the scientific study of statistics. 141 In their work there was a close examination of games. They demonstrated that games could give no advantage to either side (player) unless odds were introduced that gave winners greater returns than could be achieved by mere chance. The riverboat gamblers conducted what would be called games with even chance. Hence, by cheating they did not have to introduce uneven odds to the formula. 142
3. Contemporary Riverboats in America
A tidal wave of legalized gambling washed across the North American continent soon after the state of New Hampshire instituted a sweepstakes lottery tied to horseracing events in 1964. 143 Other states followed—New York in 1966, and New Jersey in 1969. 144 New legalizations continued as venues were quick to imitate the lottery practices as soon as an adjacent state jumped on board. Other forms of gaming spread from coast to coast—pari-mutuel horse and dog race betting, as well as charity games—usually bingo. 145 Only Nevada had authorized casinos (starting in the modern era in 1931), until, in 1976, New Jersey legalized casino games for Atlantic City. Casinos opened there in 1978. 146 Through the 1980s, while a majority of states had adopted some other form of legal games, nearly a score had rejected attempts to introduce casinos into their states. 147 All this changed at the end of that decade, as new formats for casinos appeared.
Iowa
First, in response to federal court rulings (especially Cabazon v. California), 148 Native American tribal governments were permitted to request (and even demand) that states permit them to have casinos on their reservation lands. Second, in 1989, the state of Iowa took a leap and authorized the playing of casino games aboard boats making excursions on the Mississippi and Missouri Rivers. 149 Ironically, by 1989, Iowa had legalized more forms of gaming than any other state. 150 The move to casinos, while a big step in the national gambling scene, was seen as only an incremental step for the state legislature. In fact, during the legislative session debating the question, references to “casinos” or “Las Vegas” were judiciously avoided. Instead, the newly licensed riverboat casinos were seen only as boats conducting cruises of an historical nature, such as experienced in the era of Mark Twain, with games as only a side attraction. Cruises were fun events for families, with sections of the boats reserved for underage passengers. 151 All the boats had to have areas selling products made in Iowa, and operators were required to promote Iowa tourism. A maximum of 30% of the deck space could be devoted to gambling activity. 152
The “fun” nature of the gaming boats was underscored by the fact that all the games gave modest odds-advantages to the casino itself. 153 In this way, there was no major incentive for cheating.
The boats would make three-hour excursions—being in motion on the rivers for at least two hours. After the excursion they would return to their original point of departure. 154 At the games, individual bets were limited to five dollars, while a player was not allowed to lose over $200 during a single excursion. 155 The limits were removed in 1994. 156 The Iowa casino rules were patterned after those in New Jersey and Nevada. Table games were closely audited, and slot machines were linked to computerized monitoring systems. 157
In 1990, licensing began, and the first casino boats began operation on April 1, 1991, after counties where boats were docked voted their approval. Gaming taxes were levied on a sliding scale from 5% to 20% depending upon gross revenues from the games. 158
While the experience of high stakes land-based commercial casino gambling, which was initiated in New Jersey in 1978 (following its start in Nevada in 1931), had not been imitated by any other state up to this time, the Iowa experience quickly spread. It had distinct differences from what had been occurring in Atlantic City and Las Vegas. 159 The games were being played over water. 160 The water separated the players from land that held residential populations and other commercial activities. 161 There were time limits on gambling activity, and in Iowa, there were limits on the amounts that could be gambled and lost. 162 Casino gaming in New Jersey and Nevada was imperiled by a pervasive ambient crime atmosphere as well as social degeneracy—including loan sharking, drug activity, and prostitution. 163 By putting the games over water on vessels separated from land, authorities could exercise controls over undesirable social activities. In Iowa, police were present during all excursions. 164 They also monitored the entrance and exit areas of the boat. Reinforcing these ideas were notions that the newly authorized Indian reservation gaming was also far removed from urban settings and residential areas. So too was the very limited casino gaming permitted for the remote historical mining towns of Deadwood, South Dakota (legalized in 1988, opened in 1989); and Central City, Blackhawk, and Cripple Creek, Colorado (legalized in 1990, and opened in 1991). These towns allowed bets of only $5 per play. 165
Illinois
Iowa placed its riverboats on waters that bordered other states. Illinois took notice. In January 1990, the Illinois legislature narrowly passed its own Riverboat Gambling Act. 166 They authorized ten riverboats across the state, with four designated for docking on the Mississippi River. Each of ten license holders could have two boats at its dock. 167 Cook County, with the city of Chicago, was originally barred from having boats. 168 The casino games were the same as those offered in Iowa, but there were no limits on the size of wagers or on the amounts lost by players on each cruise. Cruises could take up to four hours. The boats had a capacity of 1,200 players per cruise. 169
The Illinois boats started operations in April 1991. 170 At first, the boats were taxed at a rate of 20% of the games’ winnings. 171 In 2007, the rates were raised and put on a sliding scale that went up to 52%. 172 At the time, there were only nine license holders, as a boat in Galena had lost its license. It sought to sell its license to operators in Rosemount, a suburb of Chicago inside of Cook County. The tax rate was then set with the highest rate being 70% until the tenth boat at Rosemount began operations, which it did in 2011. 173
Indiana
Legalized gambling came late to Indiana. Before the state began its lottery in 1991, it had been one of only four states in the United States that had no legal gambling. A campaign for casinos was also taking place. The state legislature passed a riverboat gaming law over the veto of Governor Evan Bayh in 1993. 174
The strongest motivation for approving casino gambling was provided by the fact that several casino boats in Illinois were drawing much of their revenue from Indiana residents. Four Illinois casinos were within 50 miles of the Indiana border, and another license was held by a boat in southern Illinois within a short driving time of Evansville. 175
Indiana's new law authorized 11 casino boats for counties bordering Lake Michigan waters, as well as on the Ohio River and Patoka Lake. Licenses could be granted only if the residents of the county where the boat operates approved casino gaming in a referendum vote. 176 The Patoka Lake license was not activated, as the United States Army Corps of Engineers was determined to own the rights to control the water of the lake. In 2004 lawmakers authorized that the eleventh license be given to interests wishing to establish a casino in the resort community of French Lick in southern Indiana. 177
On December 9, 1994 the first two licenses were awarded, but there were legal difficulties. The federal Johnson Act prohibited gaming on the Great Lakes. 178 The state had claimed an exemption to the provisions of the act in the riverboat legislation, but the matter had to be clarified in Congress, with the attachment of a rider to the Coast Guard Reauthorization Act of 1996 that exempted Lake Michigan waters from the Johnson Act for purposes of gaming on Indiana-licensed casino boats. 179 Difficulties with the Ohio River also arose, as the waters of the river were within Kentucky. This was resolved by requiring boats on the river to cruise within a short distance of the shore. 180
The 1993 legislation created an Indiana Gaming Commission of seven members appointed by the governor. 181 They accomplished at least some of their original purpose. Revenues for Illinois boats experienced a small decline, while Indiana boats surpassed Illinois revenues. 182
The commission has a very wide range of powers. It may make any rules necessary for carrying out the mandates of the 1993 act. Additionally, it accepts applications for licenses and conducts all investigations of applicants, including investigations into personal character. It selects the licensees and oversees their operations. It takes all disciplinary actions if rules are violated and may revoke licenses, which are granted for a five-year period. 183 The boats must be at least 150 feet in length and have the capacity to carry 500 people. 184
The first boat to begin operations was Casino Aztar in Evansville; it opened its doors for gaming on December 8, 1995. The casino boats were required to go out into waters for cruises, although one off Lake Michigan has a special channel for its cruises. An amendment to the original 1993 law clarified conditions when the boats could remain docked. Basically, these included any times the boat captain would determine that safety required that the boats remain docked. In any case, the boats were required to have two-hour cruises. If the boat is docked, the cruises are mock cruises. 185
The casino boats pay a gross gaming tax on a scale of 15% to 40%. Of this tax amount, one-quarter goes to the city where the boat is docked (or county, if not in a city) or casino located, and three-quarters goes to the state's general fund. There is a three-dollar admission fee, which is also shared among state and local governments. 186
Mississippi
The state of Mississippi has the third-largest volume of casino gambling of any venue in North America. Approximately 30 casino “boats” generate nearly $2 billion in gambling wins each year. 187
Mississippi did not set out a deliberate course for casino gambling. Instead, they seemed to just let it happen. 188 Casino style gambling arrived in Mississippi aboard the cruise ship Europa Star on December 19, 1987. The 157-foot ship with a Panamanian registration docked at Biloxi, and began a series of “cruises to nowhere.” Gambling activities on the ship included roulette, bingo, and slot machines. Short round-trip cruises were made three miles off shore from Biloxi but within the boundaries of a series of barrier islands. The ship operators claimed they were in international waters. The state attorney general sought to end the gambling by claiming the ship was in state controlled waters until they were three miles outside the barrier islands. 189
Before the matter was resolved in court, the legislature took up the issue. 190 At first they sided with the attorney general. However, in 1989, a law was passed allowing large ships—at least 300 feet long—to conduct gaming in the waters inside the islands. 191 One ship, The Pride of Mississippi, operated under provisions of the law for one season; however, it could not operate at a profit. 192 Nonetheless, businesses along the Gulf Coast pleaded to the legislature for more open gambling rules, as the ship had generated significant tourist revenue for them. The legislature now had the Iowa model for riverboat gambling, and they decided to duplicate it—to an extent. 193
On March 23, 1990, the governor signed into law an act permitting casino gambling on riverboats. 194 The boats had to be at least 150 feet long and located in navigable tributaries and in oxbow lakes in counties bordering the Mississippi River or on the Gulf Coast. The counties were given the option of having elections to ban the boats from their waters. A measure describing a regulatory framework almost identical to that in Nevada was enacted into law in the summer of 1990. 195
The Mississippi law is distinguished from other riverboat laws in that there was never an expectation that the riverboats would have to leave shore. There was no cruising requirement. Eventually the facilities lost all pretense of being navigable operations. 196 Instead, barges were moved into the permissible waters and gambling structures were constructed on top of the vessels, and hotel and restaurant facilities were constructed around the barge. 197 The barges did include flotation mechanisms so they could rise and fall as water levels changed during flood seasons. Most gamblers cannot perceive that they are over water when they are gambling. 198 In addition to fees, the boats pay taxes of 8% on their gambling wins to the state, and additional taxes of 10% of the state amount to local governments. 199 The casinos are open 24 hours a day and unlike other riverboat states, players may enter and leave gambling areas whenever they wish to do so. 200
Most of the boats are located in several distinct areas of the state. The Gulf Coast (Biloxi and Gulfport) has a dozen casino boats; Tunica County near Memphis, Tennessee, has about ten “boats,” while there are four boats in the Greenville area, and four boats in the Vicksburg area. The largest casino is MGM's Beau Rivage, which opened in Biloxi in 1999 with 1,000 hotel rooms. 201
In 2005, Hurricane Katrina devastated the casinos along the Gulf Coast. All the casino facilities were destroyed. In an effort to restore the vitality of the casino industry, the state permitted rebuilt casinos to be fixed to the land, albeit they had to be built within 800 feet of the coastal water. Twelve casinos had been destroyed, but twelve new casinos have been built to replace them. 202
Missouri
The most noticeable form of gambling in Missouri is found on 13 riverboats that started operations in the mid-90s, during a very confusing series of court battles and voter referenda. The initial vote to approve riverboat gambling came on November 3, 1992. 203 The legislative initiative authorized casino boats for the Mississippi and Missouri Rivers. The boats had to take two-hour cruises, and players could not lose more than $500 during the cruise. 204 After the referendum, seven companies applied for licenses. Before the boats could cruise with full scale casino gambling, the state was hit with a lawsuit challenging the right to operate casino games. The state constitution banned lotteries. (The voters made a constitutional exception for lotteries in 1986.) The initial court ruling was that most casino games were lottery games. The boats that were operating had to close down their machines, roulette wheels, and baccarat games, and operate with live poker and blackjack games only. A few did for a short time. 205
The casinos got together and put a constitutional initiative on the ballot in April 1994. 206 This time the voters said “no,” but immediately another petition campaign was underway, and the voters then approved the required constitutional amendment in November 1994. 207 The casino boats pay fees and a tax of 20% on their gambling wins, which is shared between the state and the local community. 208 They have enjoyed a mixed success, as they face considerable competition—among themselves, and with boats in Iowa, Illinois, and Mississippi. Since the beginning, the boats have sought to have the $500 betting limit eliminated, and it was removed in 2008. 209
They have also sought to remove the requirement that they have to cruise in the rivers and be docked within the channels of the rivers. This ridiculous requirement was revealed for its stupidity when a commercial barge hit one of the boats in its dockside position. A major catastrophe was only narrowly avoided. 210 Several companies began to put boats in artificial channels cut into the river. The gaming commission approved this move; however, the state supreme court ruled that this violated the requirement that the boats be in the river. Again the casinos went to the voters, and in 1998, the voters said the boats could be in artificial “moats,” and that actual cruises were no longer necessary. However, they must still have “mock” cruises of two hours. 211
The Missouri experience with riverboat casinos has been highlighted with negative events that serve as warning signs for all gambling operations on heavily travelled venues. Riverboats do not enjoy exclusive use of rivers. The rivers are shared with other commercial boats. In April 1998, three barges struck a riverboat casino which was carrying 2,500 passengers near St. Louis. While the casino boat—The President—was permanently moored, it broke loose and drifted 500 feet before a towboat could overtake and stop it. Other excursion boats on the river were pressed into service in order to rescue passengers on the casino boat. 212 History repeated itself when, in July 2000, a casino boat near Caruthersville, Missouri, collided with a towboat. Ninety-one people had to be rescued. 213 The head of a rescue team reported, “We could have had 100 bodies floating in the river; that boat could have been like the Titanic.” 214
Louisiana
Louisiana has both a long historical attachment to gambling enterprises and a recent one as well. Louisiana was a critical part of early gambling history in the United States, as New Orleans was the site of many clandestine dens of games when Andrew Jackson led the national military forces against the British redcoats in the battle named for the Crescent City in 1815. 215 In 1828, John Davis opened what has been considered the first real casino in the United States at the corner of Bourbon and Orleans Streets. 216 Following the Civil War, a well-bribed state legislature authorized the infamous Louisiana Lottery Company. The company began to sell tickets throughout the United States. It continued operations until 1895, after federal laws prohibited its use of the mail system. 217 In the early 1900s all gambling was technically illegal, but gambling continued. Slot machines were openly played through the 1930s. 218 Gambling clubs kept operating even as Sen. Estes Kefauver's Senate committee on organized crime targeted the state for enforcement activities. In the meantime, gambling on horse races had been legalized. 219
The modern era of legalized Louisiana gambling began in 1990, when the legislature gave the green light for the start of a new state lottery. 220 In 1990, an act was also passed that opened the door for Native American casinos. 221 In 1991, riverboat casino gambling was approved. The next year, authorization was granted for a single land-based casino in New Orleans. 222
Fifteen riverboat casino licenses have been granted, as has the license for the New Orleans casino. 223 Louisiana has suffered from having considerable competition for its gambling patronage. Louisiana does not exist in a vacuum. Many gaming opportunities are available to residents in adjacent jurisdictions. 224 Mississippi has a wide array of casinos. Several casinos are located in Tunica, a northern Mississippi county near Memphis, Tennessee. Others are located in cities on the Mississippi River. The largest casinos are found on the Gulf Coast within a hundred miles of New Orleans. A considerable portion of the patronage of Mississippi casinos comes from Louisiana.
But patronage and revenue do not constitute the major problem with Louisiana gambling. Patterns of public corruption that seem endemic in the state's history came to the fore once again, as licensing of gaming facilities and distribution of gaming equipment began. One governor, Edwin Edwards, was linked to a system of bribery involving several casino license holders. He was convicted and was sentenced to a prison term. 225
4. Cruising: Voyages on the High Seas
Today, over 300 ships serve passengers as they cruise the oceans of the world. Of these, it is estimated that 140 offer casino gambling as an amenity for patrons. 226
The first company that provided ships designed for passengers was the Peninsular and Oriental Steam Navigation Company. It conducted voyages between England and Spain starting in 1822. 227 Regularly scheduled passenger service began in 1844. 228 The notion of cruises as an item of recreational, even luxury, travel was highlighted in Mark Twain's journey from New York across the Atlantic Ocean and the Mediterranean Sea, eventually ending in the Holy Lands before returning. Twain wrote a book entitled The Innocents Abroad, about his experiences. 229 He sold more copies of the book than any other he had written.
The idea of having luxury cruises was solidified with the launching of the Prinzessin Victoria Luise, a German ship, in 1900. 230 However, until recent decades, ocean travel was mostly confined to voyages taking passengers from one location to another. The notion of round-trip excursions that stopped at many ports where passengers could get off and then re-board began only in the latter years of the twentieth century. 231
The ocean travel that was on ships in the early part of the twentieth century came to an almost complete halt in the 1950s and 1960s with the advent of long-distance air travel. 232 Airplanes could make the journeys much faster, in times measured in hours rather than days, and less expensively as well, as they did not require as much fuel nor large crews. By 1960, only the Cunard Line with the Queen Mary and Queen Elisabeth II offered one-way travel between the United States and England. 233
The return of ocean cruising entered the travel scene in the 1960s, with an emphasis upon luxury. New ships were designed so that most passengers could have balconies off their rooms. New ships were much larger, with passenger capacities exceeding 4,000 and even 5,000. 234 They also offered many luxuries—fine dining, showrooms, theaters, exercise rooms, and also gambling casinos. 235 The Cunard Line's Queen Elizabeth II began offering gambling by installing 20 slot machines in 1961. 236 Soon, the Queen Elizabeth II added blackjack and roulette to the slot machine offerings. 237
In 1972, the Empress of Canada opened the first full-service shipboard casino. Since that date, almost all ocean ships include casinos on board. 238 One major exception is found with the Disney Corporation's ships, which cater strictly to families (and especially small children). 239
The purpose of the modern ships is the actual cruise, not just transportation. Typically, the cruises last several days or even weeks. The ships visit many port locations. Most of the passengers remain with the cruise during its entire voyage, ending with a return to the initial launching port. The cruise ships are among the largest ships in the world. The largest is the Oasis of the Royal Caribbean line. It is over 1,000 feet long, has a crew of nearly 2,400, and carries 6,000 passengers. (For comparison, the legendary Titanic was 882 feet long, had a crew of less than 900, and carried 2,435 passengers.) The casino on board has 500 slot machines and 27 tables on a gaming floor of 18,000 square feet. 240
The other leader among the cruise companies having casinos aboard their ships is Carnival Cruise Line, with more than 40 ships offering casino games. 241 Carnival has a gambling staff exceeding 1,000 individuals for its ships. 242 The ships offer linked slot machines among several vessels, permitting “mega-type” jackpots. 243 Other major cruise lines with casinos include Holland American Line, Norwegian Cruise Line, Princess Cruises, and Royal Caribbean International. 244
Most of the casinos are operated by outside gaming companies through contracts sharing revenues. The leading operator is Casinos Austria, which operates 13 cruise ship casinos. 245 The gaming on the ships is supervised by the ship crews. While governments are not involved, an association of cruise ships offers rules overseeing casino operations on most ships.
The Cruise Lines International Association, Inc., was established in 1975.
246
Its “Gambling Guidelines” include the following:
All (gaming) equipment purchased and installed on cruise vessels will meet the regulatory standards of the Nevada Gaming Control Board or other licensed jurisdiction for payback and internal software. Each line will provide a gaming guide setting forth the rules of play for their casino. These rules of play shall generally follow those established for casinos in Nevada, New Jersey, or England. These house rules will also be made available in every casino. Each member line will post at every gaming table minimum and maximum betting limits for each game. Only adults are allowed to play the slots or the tables. All shipboard gambling operations will be inspected by each member line's internal audit department on a regular basis, not to exceed 12 months. All casinos will have detailed internal control procedures concerning the cash and coin counts, casino cage procedures and other processes, similar to licensed jurisdictions. Each line will employ some form of surveillance to assure operations are fair and equitable for all parties. Each line will separate the operation of the casino from the financial aspects of the casino as clearly as possible including specific duties for cashiers and table gaming staff. The onboard casino operations will be the overall responsibility of the Hotel Manager or Director, who is charged with ensuring the highest standard of conduct for the casino staff. In case of a gaming dispute, any passenger who feels he or she has an issue that cannot be resolved by the Casino Manager should bring it up to the Hotel Manager, and every effort will be made to resolve the problem. If the issue is not resolved on board the vessel, each ship will have at the casino cage a current list of contact information for their home office or casino operator where the passenger can pursue their dispute. The cruise vessel will have onboard comment cards for the inclusion of any comment, concern, or means to improve the gambling system on board the vessel. Gambling is strictly for the enjoyment of the passengers who choose to avail themselves of this form of entertainment.”
247
Shipboard casinos differ from land-based casinos in several ways. 248 The casinos pay no gaming taxes. The casinos are not open on a 24-hour basis like those in Las Vegas. Usually, hours are from noon to after midnight. Whenever the ship comes into a port—basically within the three-mile limit from the shore—the casino must close. The amounts gambled are usually restricted—typically to $300 per session. Machine payoffs are lower, often about 80%.
Occasionally, there is a tournament for big players, some of whom are invited and have their cruise paid for. There usually is no credit play. Regular players may join clubs that give incentives for play activity.
As the ships offer confined gaming space, that space is well controlled—along with the rest of the ship. Security is tight, but not a major concern. If there is any cheating or stealing from the casino, the culprits would find it difficult to escape with large sums of money. Rules against activity such as “card counting” are more easily enforced than in land-based casinos.
The collective winnings of all ships’ casinos do help the bottom-line profits, but in comparison with land-based casinos, they are not excessive. In 2011, the ships carried 22 million passengers, but only 10% gambled in the casinos. Most gamble only small sums—less than $20 per visit to the casino. 249
The cruise ships must operate their games on the high seas, and their voyages are essentially international. They stop at several seaport cities on their venture—at least two of which are in different jurisdictions (countries)—and while in port no casino gambling is allowed. 250
The ship lines indicated above are not American companies. Indeed, very few American ships have casino gaming, and very few have luxury cruises as well. In 1949, the U.S. Congress passed very strict prohibitions banning gambling on American flag vessels no matter where they were operating, whether in territorial or international waters. 251 The ban affected vessels registered as American, and also ones principally owned by United States citizens. 252 While the point of the law was clearly to regulate the type of gambling ship discussed below (“cruises to nowhere”), the effect was general. Even though the law was to apply to ships that were used “principally” for gambling (a rather vague term), American ships ceased to have casinos on their voyages. 253
The Johnson Act of 1951 made possession of gambling machines illegal except under certain circumstances; e.g., they were legal in the jurisdiction where they were located. 254 This law gave an emphasis to the notion that American ships could not have machine gambling and come into any American port where state law prohibited the machines (which included every port city in the United States in 1951). Foreign vessels could stop the use of the machines in these ports and not be in violation of the 1951 law, as they were still under foreign or international jurisdiction to some degree while in port. 255
By 1990, the cruise ship industry was flourishing. Over 80 cruise ships utilized American ports. All but two flew foreign flags. 256 Moreover, the general state of American ship building and American vessel companies was one of deterioration. 257 In 1991, the U.S. attorney general ruled that a ship was not a “gambling ship” if it provided for overnight accommodations, and/or landed in a foreign port on its cruise. 258 American shipping companies renewed an interest in offering gambling on cruises. 259 As a result, Congress passed the “Cruise Ship Competitiveness Act” on March 9, 1992 in order to establish “equal competition” for American ships. Now the American flag ships could have gambling on their cruises while in international waters. 260
International cruise ships are for the most part not subject to the regulation of any jurisdiction regarding their gambling activities. 261 There are few limitations on licensing of casino managers or employees. There are few guidelines on surveillance and player disputes. 262 Nonetheless, the major cruise ship companies do have considerable internal regulations. Most have definite limits on the amounts of money that can be wagered, as they do not wish to take opportunities for spending money on other amenities away from the passengers—who may have to remain on the ship for several days after their gambling venture has ended. 263 As Carnival Cruise Line and other ship casino companies do have land-based operations in other jurisdictions (Carnival is in Louisiana and Ontario), they do not want to have their licenses there jeopardized by any unacceptable practices within their shipboard casinos. 264
There was one ship on the high seas that had been subjected to the direct regulation of a state. Nevada requires its casino license holders to secure permission of the Nevada Gaming Commission and the Gaming Control Board if they are operating gambling operations outside of the state. 265 Prior to 1993, the permission had to come from the Nevada state authorities before out-of-state operations could begin. 266 Accordingly, in 1989, Caesar Palace applied for an approval to manage the casino on board the Crystal Harmony, an exclusive Japanese-owned ship flying the flag of The Bahamas. 267 The approval was granted under the conditions that Caesar establish a fund for the Nevada gaming authorities so that the state could conduct background investigations of the ship owners, operators, and crew. Internal auditing controls also had to meet state standards, with independent accountants conducting regular reviews of the books. Nevada agents were given full access to the casino's records, as well as to the facilities. All costs of regulation were absorbed by Caesar. The Crystal Harmony was the first and only international ship to have a casino regulated by an American state jurisdiction. Caesars no longer operates the casino. 268
5. Ships Anchored in International Waters
An era of prohibition of the production and consumption of alcoholic beverages descended across America from the beginning of the 1920s until 1933. 269 An illegal industry emerged around the delivery of such products to a public that very much demanded them. Many methods were used to get the beverages to the customers. 270 The illegal entrepreneurs discovered the possibilities of serving alcoholic beverages on ships that were anchored in waters outside of the territorial limits of the American coastline. However, this was not a favored method of delivery, as the ships were very visible and smaller boats taking customers to the ships could be easily intercepted. Federal laws were adjusted to make such transport of customers illegal. 271 Also the boundary of federal jurisdiction over alcoholic beverage consumption was extended from three miles to sixteen miles off of the coast. 272 The situation was different for gambling. The limits remained at three miles, and also there was no specific federal law against gambling. 273
Entrepreneurs saw the idea of anchored gambling ships in international waters as one that could be exploited. 274 International waters were a desired location because every coastal state had laws against gambling. The focus of their efforts was waters off the California coast. In 1927 a plain looking fishing barge (called Barge C-1) was anchored off the coast of Los Angeles County. 275 The local sheriff was suspicious that gambling was taking place on the barge. He conducted a raid on July 8, 1927 and found poker tables and a roulette wheel. 276 As the structure was beyond three miles from the coast, the arrest of the ship operator was challenged in court. However, the operator was dismayed as the judge ruled that the three-mile limit did not apply to the actual mileage from land to the ship. Rather it applied to an imaginary line connecting two points extending outward from the shore. 277 Although the barge was prohibited from reopening gambling operations, the district attorney decided not to bring criminal charges as the jurisdictional line in question carried a bit of ambiguity. 278
As a result, others sought to initiate shipboard gambling. In June 1928, the Johanna Smith opened as “an amusement steamer,” offering dancing and dining with a full-course meal at $1.50. 279 Two speedboats carried passengers to the ship from the foot of Pine Avenue in Long Beach at a cost of fifty cents per patron. The owner of the Johanna Smith was closely tied to bootleggers and mobsters in Tijuana, Mexico. Recognizing the new federal law setting a sixteen-mile limit for consumption of alcoholic beverages, the owner of the Johanna Smith banned the beverages, and even forced customers to throw their personal bottles over board. The Johanna Smith also used the newly required line to measure its three-mile limit. 280
Other ships joined the Johanna Smith. There were ten, including the Manfalcone, Rose Isle, William H. Harriman, and the S.S. Monte Carlo. Together they employed 1,500 and welcomed as many as 50,000 patrons a week for their gambling offerings. 281 Law enforcement agents kept trying to find a theory to shut down the operations. Soon they discovered a 1793 law aimed at pirates. 282 The law required commercial ships to deliver cargo to ports. As the gambling ships were stationary, they could not go to ports. They were vulnerable. The Johanna Smith was boarded by authorities, and subsequently, it was towed to shore. 283 Other police deputies intervened by stopping speedboats carrying passengers to the gambling ships for a fee. Accordingly, the boats ceased charging a fee. Ship operators also placed ships without any gambling half way to the gambling ships. Passengers were carried to the big ships in a two-step process to dodge the law. Authorities also sought to arrest players as vagrants. Eventually, the ships wore down and customers ceased to play. Many were lured away to newly expanding casinos in Tijuana. The Manfalcone was in operation for two years until it was burned in a fire in 1930. 284 The Johanna Smith was also destroyed in a fire in 1932. 285
The Monte Carlo enjoyed success in the 1930s. In 1932, it was converted into a gambling ship and docked off of Long Beach in anticipation of the 1932 Los Angeles Olympics. It took on 15,000 players a week, and achieved annual profits of $3 million. In 1936, it was towed to San Diego and anchored. A major storm hit Coronado Bay on New Year's Eve (December 30–31, 1936), and the boat crashed into the shore, ending its use as a gambling ship. 286
In 1938, Tony Cornero Stralla launched the S.S. Rex off the coast of Los Angeles. It operated in Santa Monica Bay 24 hours a day for between 1,000 and 3,000 patrons a day. Legal authorities claimed that the Bay was within the territorial waters of California; however, Stralla won a court ruling that allowed him to keep the games going into 1939. 287 Then-state attorney general Earl Warren argued that the Rex was a public nuisance, and he won an order against the ship. A raid ensued, and after eight days, Stralla abandoned the ship and it ceased operations. The ship ended up being put into service during World War II, but it was captured by a German submarine and sunk off the coast of Africa. Stralla went to Las Vegas, where he opened the Stardust. In 1946, he mysteriously died while gambling at a rival's casino. 288
6. Cruises to Nowhere
The 1949 Act banning gambling on American flag ships resulted from a controversy lasting several decades in California and other coastal states. 289 Starting in the 1920s floating barges appeared in the waters off of San Francisco and Los Angeles, as well as the Florida coast. The ships anchored in international waters—three miles off the coast. The had brightly lighted decks that could be seen from shore and beyond. Each day and evening, they would provide boat taxi service for customers who would drive to nearby docks. The ships had entertainers, food, drinks (it was Prohibition time), and gambling. They operated through the 1930s without much opposition from law enforcement. However, when Earl Warren became attorney general of California, he decided to crack down. 290 Raids were conducted, but the issue of what was definitely legal or illegal persisted until California U.S. Senator William Knowland persuaded his congressional colleagues to pass legislation in 1949. The law now had teeth, and enforcement became general until there was pressure for change in the 1990s. 291
Even before the passage of the 1992 Cruise Ship Competitiveness Act, vessels began to test the resolve of states and the federal government regarding coastal gambling operations. 292 The actions of one company seemed to be the catalyst for the legalization of riverboat and costal casinos in Mississippi in 1990. 293 After the 1992 legislation passed, the states were given the opportunity to opt out of the Johnson Act prohibition on machines in their waters. Hence, they could allow by positive action boats to have cruises out to international waters for gambling even if the boats did not stop at foreign ports. 294 In 1996, the U.S. Congress acted again. This time Congress gave a blanket approval to the international waters “cruises to nowhere” unless the state (of debarkation and reentry) specifically prohibited the gambling ships. 295 Then they could only prohibit them if the ship did not make port in another jurisdiction. The ship's gambling operations would not be subject to any jurisdiction unless the state took specific action for regulation. 296
Since the 1996 law was passed, a large number of ships have begun operations off Florida and also in the Northeast. 297 The state of California specifically passed a ban on the ships. 298 Over 22 ships operate off Florida, generating collective revenues well over $200 million a year. 299 Ships also have used South Carolina ports. 300 Several ships attempted to gain docking rights in New York, but local officials—including Mayor Rudolph Giuliani—fought the efforts and demanded that the boats go out to at least 12 miles off the coast before they could have gambling. After many months of negotiations, the city agreed to establish a gambling regulatory board for the ships through passage of an ordinance. One major vessel, the Liberty I, agreed to follow the local regulations. 301
Several states, including South Carolina and Florida, have found opponents of the boats seeking legislation against them, but so far, their efforts have been to no avail. 302 Even California has succumbed to the realization that regular gambling cruises for local residents have come to be. On April 15, 2000, the Enchanted Sun began voyages out of San Diego. 303 The ship goes out three miles and hugs the coast until it reaches Rosarito Beach, south of Tijuana. Then it hits the dock—briefly dropping anchor—and then it returns. The ship is at sea for a total of less than eight hours. Over 400 passengers enjoy a meal, entertainment, drinks, and gambling. 304 Commercial success of such operations is not guaranteed. Passengers have to pay a cruise fee of $68, and (like with other ships) there is always the problem of rough seas. An interesting twist to the Enchanted Sun casino is the fact that the California Viejas Band of Native Americans in an operating partner in the venture on the high seas. 305
7. In the Navy
In the introductory section of this article, we shared the story—which may be mythical or factual—of the crew on the ships of Christopher Columbus in 1492. Ship crews are drawn to gambling for myriad reasons. It is appropriate as we reach toward the end of the article that we return to episodes of gambling among the crews of ships. Now we look at crews of ships in service to the Navy—not of Spain, but of the United States.
Crews have gambled simply to pass time that would otherwise be consumed by boredom. 306 While gambling among crew members has occurred over millenniums, many navies have asserted rules proclaiming the activity to be illegal. The Regulations for the Government of the United States Navy (1870) asserted in paragraph 794 that gambling is “strictly prohibited on board vessels of the Navy and in Navy yards, and in places and stations belonging to, or under control of the Navy Department.” 307 Such a rule has been in place for well over a century. In 2012, rule 5.1.9 stipulated that “No person will (a) Gamble, as defined at 41 C.F.R. 102, with playing cards, dice, internet websites, or other apparatus, or methods on board Naval units; (b) Utilize authorized entertainment; non-gambling card games, etc., outside of command authorized spaces during prescribed working hours between taps and reveille in berthing or spaces holding divine service.” 308
One unwritten rule accompanies these explicit mandates. Gambling is pervasive on board ships, as crew members ignore the rules of 1870 and 2012. 309 However, crew members religiously follow one rule: they never participate in games where enlisted men (or women) play against officers. 310 All recognize that only bad things can happen in such games. You can lose—BAD. Worse, at least for the enlisted crew member, you take money away from a person empowered to give you orders—BAD.
While gambling is forbidden, various card tournaments—for instance with Texas Hold ’Em games—are permitted, even with enlisted crew playing beside officers. However, the prizes in these games may not be in the form of cash. 311
Casual discussions with Navy personnel will yield many stories about shipboard games. One series of stories focuses upon a man who has been called “the greatest player ever to be in the Navy.” While this is probably not true, the officer (an ensign) was a good stud poker player who won consistently. His play taught him discipline and honed his memory skills. It taught him how to deal with other people, when to take chances, when to fold. Kenny Rodgers could have sung a song about him. During his World War II days in the Pacific, he won thousands of dollars—some estimate as much as $10,000. He kept the money and when he was a civilian again, he used it to fund a winning campaign for a seat in the U.S. Congress. His playing skills helped him move up the ranks, to the Senate, the vice presidency, and in 1968, the presidency.
Poker did well for Richard Nixon—up to a point. With the Watergate scandal, he lost his poker cool. But then he had enjoyed a run of well over two decades. 312
Postscript: The EBB Tide of Casino Cruising
The popularity of casino gambling on cruise ships and other water venues has not increased to the point of being a major profit center for either the gambling industry or for the cruise ship industry. The gambling success where it occurs has been tied to a lack of competition from other venues. Where the competition increases, gambling aboard ships has not increased to any great degree. Here, we list factors that are related to the limited success of gambling on the waterways of the world:
a. The Idea. The concept of a cruise excursion and the concept of a Las Vegas excursion are quite opposite. People go on cruises in order to relax—to calm their nerves. They go to Las Vegas for a very different experience. Ships are surrounded by the tranquility of blue waters. In Vegas the color is red, and the goal is excitement. These opposites are not compatible. Gambling does not fit the essential motif of ships. b. The success of casinos has been tied to competition. The customer wants variety in games offered and in the different venues where games are played. Casino ships offer a single small casino with very little variety. A true casino player likes to have an alternative place to play when the cards are not falling his/her way. They like to have the possibility of “going next door.” For ship board gamblers there simply is “no next door.” c. Land-based casinos face one major legal barrier: are they legal? Once casinos are deemed to be legal, their existence is essentially permanent. Ships, however, must confront different legal barriers as they move about. Different lines also have different rules. The ship operators must constantly be aware of their location—for instance if they are near the coast (within three miles) of a country. d. Hours of operation. International barriers also relate to times of operation. When a ship comes within three miles of a coast, it must close its casino. Land-based casinos may be open on a 24/7 basis. Cruise ship casinos typically open in the early afternoon and close after midnight. The player must stop when the casino closes. This is the case even if the player is on a good luck streak. True casino players do not like such limitations. e. Cruise casinos impose playing limits. The low limits are typically $5–$10, while high limits may be $100. This is too low for a hard gambler. Overall losses may be limited to $300, as they have been on Iowa riverboats in the past. These limits tell a player that he must quit, even if he has money in his pocket and a strategy based upon playing over an extensive time period. f. Build it and they will come. In Las Vegas, this means build it big. Casinos on the Strip may have gaming floors of 250,000 square feet, with 200 tables and 3,000 machines. On a ship, gaming floors are under 18,000 square feet. They cannot accommodate large crowds, while in Las Vegas a casino may attract 10,000 players at a single time. g. Competition of the port. Cruise ships go into ports. When they do, they must close their casinos. However, in the port there often is another casino, and a cruise customer may be attracted to it, hence spending money that could go to the ship casino. h. The ships usually do not offer odds as good as offered in land-based competitive casinos. Slot machines in Las Vegas typically pay out over 90% or even 95%, while on ships, a payout of 80% is considered good. Also ships do not give credit for play. i. The best casino players are wealthy people. They may choose any casino in the world for their play. They do not choose to play on ships. Land-based casinos can give them credit and also all sorts of incentives, like free food and rooms. j. Ships offer many options and activities which compete with the casino for a passenger's time and money. k. There is a danger and inconvenience when bad weather (a hurricane) surrounds the ship; also when the ship is operating in traffic. These are not good times for gambling in a casino.
The laws applying to gambling on ships are not interpreted in total isolation of other maritime laws and extraterritorial laws. Their understanding can be useful those those seeking to understand rules on matters such as use of and transportation of drugs, such as marijuana, on international waters. 313 Extensive literature on embargos covering shipments of arms on both the seas and in the air has been put forth containing parallels to many of the situations surrounding gambling at sea. In further research, as we seek understandings of gambling law, we should look at these other applications, as those studying these facets of international commerce should look at our study of gambling phenomenon.
