To learn what started betting on sports one has to first examine the history of sports gambling in the US. The USA had a long history of permitting certain types of legal gambling and also illegal gambling to some extent. Political control and scandals concerning gaming interests have ended in selected backlashes which have resulted in 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 1st wave was during the colonial era that lasted till the mid 1800s, the second wave started following the Civil War and lasted till the early 20th Century and the 3rd wave commenced while in the Great Depression and is still continuing.
Throughout the Colonial Era, different attitudes were enforced towards betting. Puritan attitudes were adopted towards gambling and possessing dice, cards, gaming tables etc were banned. Later on it had been allowed as 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 since it involved high risk, high expectations and opportunism.
Eventually all colonies used lotteries as a solution out of economic problems as well as help the colonies. It was a civic responsibility and profits were used to create a number of the first prestigious universities, build churches and even 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 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 mighty river with its riverboats became a major trade avenue for both 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 seemed to be increasing attack of gambling especially lotteries and whenever operators absconded with the proceeds lottery scandals eventually led to prohibition of gambling.
The Gold Rush in California set off a huge surge in the types of gambling and San Francisco became the new gambling capital in the USA. During 1849 and 1855 gambling spread widely and by 1850 California and lots of cities had licensed gambling centers. But soon the Legislature made most types of gambling illegal and certain professional gamblers were lynched. This prohibition drove wagering activities underground and did not eliminate it. Gambling was legal during 1869-1910 in Nevada.
It is easy to now understand what started gambling on sports in the USA. With all the many scandals within the lottery gambling segments, 35 states in America 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 was a popular tourist destination. Despite its illegality sports gambling became very popular and today is a billion dollar industry.