To learn what started betting on sports one has to first examine the history of sports gambling in America. The USA had a long history of allowing certain types of legal gambling and also illegal gambling to a certain degree. Political control and scandals regarding gaming interests have led to certain backlashes that have resulted in prohibition or regulating sports gambling. Standards and laws relating to sports gambling have kept changing.
Nelson Rose explains these adjustments in law as three waves. The first 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 up until the early 20th Century and also the 3rd wave commenced during the Great Depression and is still continuing.
Throughout the Colonial Era, different attitudes were enforced towards betting. Puritan attitudes were adopted towards gambling and possessing dice, cards, gaming tables etc were banned. Afterwards it was allowed so 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 since it involved risk taking, high expectations and opportunism.
Ultimately all colonies used lotteries as being a solution out of financial problems as well as help the colonies. It was a civic responsibility and profits were utilized to establish some of the first prestigious universities, build churches and also libraries. Lotteries remained popular right to the early 19th Century. Horse racing had also been preferred and the Long Island built the very first race track in 1665. Casino gaming started to emerge slowly as roadhouses and taverns began to allow card games and dice.
The Lower Mississippi Valley became a structured and legitimate gambling area in 1800s. The mighty river with 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 had been blamed 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 the proceeds lottery scandals eventually led to prohibition of gambling.
The Gold Rush in California set off 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 by 1850 California and many 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 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 popular tourist destination. Despite its illegality sports gambling became very popular and already is a high dollar industry.