To learn 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 permitting certain types of legal gambling and also illegal betting to some extent. Political control and scandals concerning gaming interests have ended in selected backlashes which have lead to prohibition or regulation of sports gambling. Standards and laws pertaining to sports gambling have kept altering.
Nelson Rose explains these changes in law as three waves. The first wave was during 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 also the 3rd 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 banned. Afterwards it had been allowed as long as it was not a calling or trade except for moderate and innocent recreation. Settlers brought 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.
Ultimately all colonies used lotteries as being a solution from financial problems as well as benefit the colonies. It was a civic responsibility and proceeds were used to create some of the first prestigious universities, build churches and even libraries. Lotteries continued to be popular right to the early 19th Century. Horse racing was also preferred and the Long Island built the very 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 grand river featuring its riverboats became a major trade avenue for both wealthy merchants and farmers. New Orleans quickly gained recognition as 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 when operators absconded with the proceeds lottery scandals eventually concluded in prohibition of gambling.
The Gold Rush in California triggered 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 also by 1850 California and many cities had licensed gambling centers. But soon the Legislature made most forms of gambling illegal and certain 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 easy to now understand what started gambling on sports in the USA. With all the many 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 very popular and today is a high dollar industry.