To learn what started betting on sports one has to first examine the history of sports gambling in America. The US had a long history of allowing some kinds of legal gambling and even illegal betting to a certain degree. Political control and scandals concerning gaming interests have ended in certain backlashes that have resulted in prohibition or regulating sports gambling. Standards and laws pertaining to sports gambling have kept changing.
Nelson Rose describes these changes in law as three waves. The 1st wave was in the colonial era that lasted till the mid 1800s, the second wave started at the end of the Civil War and lasted till the early Twentieth century and also the 3rd wave commenced during 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 outlawed. 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 nothing but a harmless past time. 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 out of financial problems and to help the colonies. It was a civic responsibility and profits were utilized to create a number of the first prestigious universities, build churches and also libraries. Lotteries continued to be popular right to the initial Nineteenth century. Horse racing had also been popular and the Long Island built the very 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 with its riverboats was a major trade avenue for 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 held responsible for committing 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 finally concluded in 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 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 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 within 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 was a preferred tourist destination. Regardless of its illegality sports gambling became quite popular and already is a high dollar industry.