To learn what started betting on sports one has to first examine the historical past of sports gambling in America. The US had a long history of allowing certain types of legal gambling and even illegal betting to a certain degree. Political control and scandals regarding gaming interests have ended in selected backlashes which have lead to prohibition or regulating sports gambling. Standards and laws pertaining to sports gambling have kept changing.
Nelson Rose explains these changes in law as 3 waves. The 1st wave was during the colonial era that lasted up until the mid 1800s, the 2nd wave started at the end of the Civil War and lasted till the early Twentieth century and also the 3rd wave commenced while in the Great Depression and is still continuing.
During the Colonial Era, diverse attitudes were enforced towards gambling. Puritan attitudes were adopted towards gambling and possessing dice, cards, gaming tables etc were outlawed. Afterwards it was allowed as long as it was not a calling or trade except for moderate and innocent recreation. Settlers brought along with them views that said gambling was merely a harmless past time. The frontier spirit encouraged the appeal of gambling since it involved high risk, high expectations and opportunism.
Eventually all colonies used lotteries as being a solution from financial problems and to benefit the colonies. It became a civic responsibility and proceeds were used to establish a number of the first prestigious universities, build churches and also libraries. Lotteries remained popular right to the early 19th 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 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. During the 1830s southern settlers turned against professional gamblers who had been held responsible for carrying out crimes, debasing morals of society and endangering streets. During 1800s there was 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 increase 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 types 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 easy to now understand what started gambling on sports in the USA. With the many scandals in 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 honest. 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 today is a billion dollar industry.