To understand what started gambling on sports one has to first examine the history of sports gambling in the US. The USA has a long history of allowing some kinds of legal gambling and even illegal gambling to some extent. Political control and scandals concerning gaming interests have ended in certain backlashes that have lead to prohibition or regulation of sports gambling. Standards and laws relating to sports gambling have kept changing.
Nelson Rose describes these changes in law as three waves. The first wave was during 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 20th Century and also the third 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 possession of dice, cards, gaming tables etc were outlawed. Later on it had been allowed as long as it wasn’t 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 as it involved high risk, high expectations and opportunism.
Eventually all colonies used lotteries as a solution out of economic problems and to benefit the colonies. It became a civic responsibility and proceeds were utilized to create a number of the first prestigious universities, build churches and even libraries. Lotteries continued to be popular right to the early Nineteenth century. Horse racing was also preferred and the Long Island built the 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 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 quickly gained recognition as being the gambling capital. Through the 1830s southern settlers turned against professional gamblers who had been 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 whenever operators absconded with the proceeds lottery scandals eventually led to prohibition of gambling.
The Gold Rush in California set off a huge increase in the kinds 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 lots of 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 numerous 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. Regardless of its illegality sports gambling became quite popular and already is a billion dollar industry.