To understand what started betting on sports one has to first examine the history of sports gambling in the US. The US had a long history of allowing certain types of legal gambling and even illegal gambling to some extent. Political control and scandals concerning gaming interests have ended in certain backlashes which have resulted in prohibition or regulation of sports gambling. Standards and laws pertaining to sports gambling have kept changing.
Nelson Rose explains these changes in law as 3 waves. The 1st wave was in 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 during the Great Depression and it’s 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 banned. Afterwards it had been allowed as long as it was not a calling or trade except for moderate and innocent recreation. Settlers brought along with them views that said gambling was merely a harmless activity. The frontier spirit encouraged the appeal of gambling since it involved risk taking, high expectations and opportunism.
Ultimately all colonies used lotteries as a solution from financial problems and to benefit the colonies. It became a civic responsibility and profits were used to establish some of the first prestigious universities, build churches and even libraries. Lotteries continued to be popular right to the early Nineteenth century. Horse racing was also popular and the Long Island built the first race track in 1665. Casino gaming started to emerge slowly as roadhouses and taverns started to allow 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 wealthy merchants and farmers. New Orleans soon gained recognition as being the gambling capital. Through 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 whenever operators absconded with the proceeds lottery scandals finally concluded in prohibition of gambling.
The Gold Rush in California set off a huge increase in the types of gambling and San Francisco became the new gambling capital in the US. During 1849 and 1855 gambling spread widely and also by 1850 California and lots of 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 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 the numerous 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. Regardless of its illegality sports gambling became very popular and today is a high dollar industry.