To understand what started gambling on sports one has to first examine the history of sports gambling in America. The USA has a long history of permitting certain types of legal gambling and even illegal betting to a certain degree. Political control and scandals regarding gaming interests have ended in certain backlashes that have lead to prohibition or regulation of sports gambling. Standards and laws relating to sports gambling have kept changing.
Nelson Rose describes these changes in law as three waves. The 1st wave was during the colonial era that lasted till the mid 1800s, the second wave started at the end of the Civil War and lasted up until the early Twentieth century and also the third wave commenced while in the Great Depression and it’s still continuing.
Throughout 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 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 from financial 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 Nineteenth 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 was a major trade avenue for both wealthy merchants and farmers. New Orleans soon gained recognition as being the gambling capital. During the 1830s southern settlers turned against professional gamblers who had been held responsible for committing crimes, debasing morals of society and endangering streets. During 1800s there was increasing attack of gambling especially lotteries and when operators absconded with all 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 by 1850 California and many cities had licensed gambling centers. But soon the Legislature made most types of gambling illegal and certain 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 easy to now understand what started gambling on sports in the USA. With 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 straightforward. In 1978 casino gambling was legalized by New Jersey and Atlantic City became a preferred tourist destination. Regardless of its illegality sports gambling became quite popular and already is a billion dollar industry.