To learn what started betting on sports one has to first examine the history of sports gambling in America. The US had a long history of allowing certain types of legal gambling and also illegal betting to some extent. Political control and scandals regarding gaming interests have led to selected backlashes that have lead to prohibition or regulation of sports gambling. Standards and laws pertaining to sports gambling have kept altering.
Nelson Rose describes these changes in law as 3 waves. The first wave was during the colonial era that lasted up until the mid 1800s, the second wave started at the end of the Civil War and lasted up until the early 20th Century and the 3rd wave commenced while in the Great Depression and is still continuing.
During the Colonial Era, diverse attitudes were enforced towards betting. Puritan attitudes were adopted towards gambling and possession of dice, cards, gaming tables etc were outlawed. Later on it had been allowed so long as it wasn’t a calling or trade except for moderate and innocent recreation. Settlers brought with them views that said gambling was merely a harmless activity. The frontier spirit encouraged the appeal of gambling as it involved high risk, high expectations and opportunism.
Ultimately all colonies used lotteries as a solution from economic problems and to help the colonies. It was a civic responsibility and proceeds were used to establish a number of the first prestigious universities, build churches and also libraries. Lotteries continued to be popular right to the initial Nineteenth century. Horse racing had also been popular and the Long Island built the first race track in 1665. Casino gaming started to emerge slowly as roadhouses and taverns started to permit card games and dice.
The Lower Mississippi Valley became a structured and legitimate gambling area in 1800s. The grand river with its riverboats became a major trade avenue for wealthy merchants and farmers. New Orleans soon gained recognition as being the gambling capital. During the 1830s southern settlers turned against professional gamblers who had been blamed for committing crimes, debasing morals of society and endangering streets. During 1800s there was increasing attack of gambling especially lotteries and whenever operators absconded with all the proceeds lottery scandals eventually concluded in prohibition of gambling.
The Gold Rush in California triggered a huge increase in the kinds of gambling and San Francisco was crowned the new gambling capital in the USA. During 1849 and 1855 gambling spread widely and also by 1850 California and many cities had licensed gambling centers. But soon the Legislature made most forms of gambling illegal and a number of professional gamblers were lynched. This prohibition drove wagering activities underground and could not eliminate it. Gambling was legal during 1869-1910 in Nevada.
It is easy to now understand what started gambling on sports in the US. With all the numerous scandals within the lottery gambling segments, 35 states in the US including California prohibited lotteries. In 1933 pari-mutuel betting was legalized and new automated systems and laws made horse racing betting more straightforward. In 1978 casino gambling was legalized by New Jersey and Atlantic City became a popular tourist destination. Regardless of its illegality sports gambling became very popular and today is a billion dollar industry.