To understand what started betting on sports one has to first examine the history of sports gambling in the US. The US has a long history of allowing some kinds of legal gambling and even illegal betting to a certain degree. Political control and scandals regarding gaming interests have led to certain backlashes which have lead to prohibition or regulating sports gambling. Standards and laws pertaining to sports gambling have kept changing.
Nelson Rose describes these adjustments in law as three waves. The first wave was in the colonial era that lasted up until the mid 1800s, the 2nd wave started at the end of the Civil War and lasted up until the early 20th Century and the third 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 possessing dice, cards, gaming tables etc were outlawed. 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 past time. The frontier spirit encouraged the appeal of gambling as it involved high risk, high expectations and opportunism.
Eventually all colonies used lotteries as a solution out of economic problems as well as benefit the colonies. It was a civic responsibility and proceeds were utilized to establish a number of the first prestigious universities, build churches and also libraries. Lotteries remained popular right to the initial 19th Century. Horse racing was also popular and the Long Island built the first race track in 1665. Casino gaming began to emerge slowly as roadhouses and taverns began to allow card games and dice.
The Lower Mississippi Valley became a structured and legitimate gambling area in 1800s. The mighty river featuring its riverboats was a major trade avenue for wealthy merchants and farmers. New Orleans soon gained recognition as the gambling capital. During the 1830s southern settlers turned against professional gamblers who were held responsible for carrying out crimes, debasing morals of society and endangering streets. During 1800s there seemed to be increasing attack of gambling especially lotteries and when 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 types of gambling and San Francisco was crowned the new gambling capital in the USA. During 1849 and 1855 gambling spread widely and by 1850 California and many cities had licensed gambling centers. But soon the Legislature made most types of gambling illegal and a number of professional gamblers were lynched. This prohibition drove gambling activities underground and did not eliminate it. Gambling was legal during 1869-1910 in Nevada.
It is possible to now understand what started gambling on sports in the USA. With all the many 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. Despite its illegality sports gambling became quite popular and today is a billion dollar industry.