BAD BET: The Inside Story of America's Gambling Industry.

• Author: Wiedman, Mark
• Position: Review

BAD BET: The Inside Story of America's Gambling Industry by Timothy L. O'Brien Times Business/Random House, $25

For the past 25 years, gambling has grown like kudzu across America. State legislatures started tapping the easy cash flows from lotteries in the late 1960s. Atlantic City broke the Vegas casino monopoly in 1976. And the '90s have seen the endless march of Indian tribal casinos, video poker kiosks, and riverboats. Americans now bet more than $650 billion a year. The industry's take from this amounts to $250 for every American, or $750 a head for the third of us who participate every year.

Gambling's presence in American life is nothing new. In 1850, for instance, New York City boasted a gambling hall for every 85 residents. Nor is it particularly novel that state legislatures have grown addicted to lottery finance. In 1832, the revenues from lotteries run by eight eastern states dwarfed the federal budget by a factor of four.

What marks gambling's break with the past is professional mass marketing. As Timothy L. O'Brien writes in Bad Bet, "this once largely informal activity is being institutionalized and marketed with the same vigor and innocence as breakfast cereal" Only thirty years ago, gambling bosses truly were men like Bugsy Siegel, building tacky if not vigorously American Las Vegas knock-offs of the ritzy European clubs. They ran their clubs like the amateurs (and often crooks) that they were, typically not even bothering to do basic bookkeeping--a helpful habit if you're evading the IRS and bilking witless outside investors like Howard Hughes.

That all changed in the mid-1970s. A new set of entrepreneurs took over a couple of Vegas casinos and revolutionized their industry. Their formula was simple: take the dazzle of a Caesar's, but go for volume. And run the place like a business.

The pathbreakers were Bill Bennett and Bill Pennington, who took over the formerly Mob-owned casino Circus Circus in 1974. Their target was a customer new to Las Vegas--one who shopped at Sears. The pair pulled the burlesque shows and paved over 51 acres for RV parking. Older games intimidated novices, so out went the baccarat tables, and in went rows and rows of slot machines. What is now familiar was then unprecedented; and Circus Circus had struck a gusher. Southern California emptied itself heading for Circus Circus, with the kids in tow to see the carnival acts Circus Circus sponsored.

The magic lay not in going low-market, but in...