To learn what started betting on sports one has to first examine the history of sports gambling in America. The US has a long history of permitting certain types of legal gambling and also illegal betting to a certain degree. Political control and scandals regarding gaming interests have led to selected 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 adjustments in law as three waves. The first wave was in the colonial era that lasted till the mid 1800s, the 2nd wave started following the Civil War and lasted up until the early Twentieth century and the 3rd wave commenced while in the Great Depression and is still continuing.
During 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 was not a calling or trade but 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 as it involved high risk, high expectations and opportunism.
Eventually all colonies used lotteries as being a solution out of financial problems and to help the colonies. It became a civic responsibility and proceeds were utilized to establish a number of the first prestigious universities, build churches and also libraries. Lotteries remained popular right to the early Nineteenth century. Horse racing had also been preferred and the Long Island built the first race track in 1665. Casino gaming began to emerge slowly as roadhouses and taverns began 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 wealthy merchants and farmers. New Orleans quickly 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 when operators absconded with the proceeds lottery scandals finally led to prohibition of gambling.
The Gold Rush in California triggered a huge surge 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 types of gambling illegal and certain professional gamblers were lynched. This prohibition drove wagering 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 all 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. Despite its illegality sports gambling became quite popular and already is a high dollar industry.