To understand what started betting on sports one has to first examine the historical past of sports gambling in the US. The USA has a long history of allowing some kinds of legal gambling and even illegal betting to some extent. Political control and scandals concerning gaming interests have ended in selected backlashes which have resulted in prohibition or regulating sports gambling. Standards and laws relating 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 up until the mid 1800s, the second wave started following the Civil War and lasted up until the early 20th Century and the third wave commenced during the Great Depression and is still continuing.
During the Colonial Era, different attitudes were enforced towards gambling. Puritan attitudes were adopted towards gambling and possessing dice, cards, gaming tables etc were outlawed. Later on it had been 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 high risk, high expectations and opportunism.
Ultimately all colonies used lotteries as being a solution from financial problems and to help the colonies. It was a civic responsibility and profits were utilized to create some of the first prestigious universities, build churches and even libraries. Lotteries remained popular right to the initial 19th Century. Horse racing had also been popular and the Long Island built the first race track in 1665. Casino gaming began to emerge slowly as roadhouses and taverns started to permit card games and dice.
The Lower Mississippi Valley became an organized and legitimate gambling area in 1800s. The mighty river featuring its riverboats was a major trade avenue for both 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 blamed 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 all the proceeds lottery scandals eventually led to prohibition of gambling.
The Gold Rush in California set off a huge surge 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 forms of gambling illegal and a number of professional gamblers were lynched. This prohibition drove gambling 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 US. 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 honest. 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 already is a high dollar industry.