To understand what started betting on sports one has to first examine the history of sports gambling in America. The USA has a long history of permitting some kinds of legal gambling and also illegal betting to a certain degree. Political control and scandals concerning gaming interests have ended in selected backlashes that have resulted in prohibition or regulating sports gambling. Standards and laws relating to sports gambling have kept changing.
Nelson Rose explains these changes in law as 3 waves. The first wave was in the colonial era that lasted up until the mid 1800s, the 2nd wave started following the Civil War and lasted till the early 20th Century and also the third wave commenced while in the Great Depression and is still continuing.
During the Colonial Era, different attitudes were enforced towards gambling. Puritan attitudes were adopted towards gambling and possession of dice, cards, gaming tables etc were banned. Later on it was allowed as long as it wasn’t a calling or trade but for moderate and innocent recreation. Settlers brought along with them views that said gambling was nothing but a harmless activity. The frontier spirit encouraged the appeal of gambling as it involved risk taking, high expectations and opportunism.
Eventually all colonies used lotteries as being a solution out of economic problems and to help the colonies. It became a civic responsibility and profits were used to create some of the first prestigious universities, build churches and also libraries. Lotteries continued to be popular right to the early 19th Century. Horse racing had also been popular and the Long Island built the first race track in 1665. Casino gaming began to emerge slowly as roadhouses and taverns started to permit card games and dice.
The Lower Mississippi Valley became an organized and legitimate gambling area in 1800s. The grand river featuring its riverboats became a major trade avenue for wealthy merchants and farmers. New Orleans quickly gained recognition as the gambling capital. During the 1830s southern settlers turned against professional gamblers who were held responsible 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 the proceeds lottery scandals finally led to prohibition of gambling.
The Gold Rush in California triggered a tremendous surge in the types 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 gambling activities underground and could not eliminate it. Gambling was legal during 1869-1910 in Nevada.
It is possible to now understand what started gambling on sports in the US. With 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 honest. In 1978 casino gambling was legalized by New Jersey and Atlantic City became a popular tourist destination. Despite its illegality sports gambling became quite popular and already is a billion dollar industry.