To understand what started betting on sports one has to first examine the historical past of sports gambling in America. The USA had a long history of permitting certain types of legal gambling and even illegal gambling to a certain degree. Political control and scandals regarding gaming interests have ended in certain backlashes that have resulted in prohibition or regulation of sports gambling. Standards and laws relating to sports gambling have kept changing.
Nelson Rose describes these adjustments in law as 3 waves. The first 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 Twentieth 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 betting. Puritan attitudes were adopted towards gambling and possessing dice, cards, gaming tables etc were banned. Later on it was allowed so long as it wasn’t a calling or trade but for moderate and innocent recreation. Settlers brought 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.
Ultimately all colonies used lotteries as a solution from financial problems as well as benefit the colonies. It became a civic responsibility and proceeds were used 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 preferred and the Long Island built the first race track in 1665. Casino gaming started to emerge slowly as roadhouses and taverns began to permit card games and dice.
The Lower Mississippi Valley became a structured 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 being the gambling capital. Through 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 seemed to be increasing attack of gambling especially lotteries and when operators absconded with the proceeds lottery scandals finally led to prohibition of gambling.
The Gold Rush in California set off 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 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 wagering 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 USA. With all the numerous scandals in 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 was a popular tourist destination. Despite its illegality sports gambling became very popular and today is a high dollar industry.