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 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 relating to sports gambling have kept altering.
Nelson Rose describes these changes in law as three waves. The 1st wave was during 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 during the Great Depression and is still continuing.
Throughout the Colonial Era, diverse attitudes were enforced towards betting. Puritan attitudes were adopted towards gambling and possession of dice, cards, gaming tables etc were outlawed. Afterwards it had been allowed so long as it wasn’t a calling or trade except for moderate and innocent recreation. Settlers brought with them views that said gambling was nothing but a harmless activity. The frontier spirit encouraged the appeal of gambling as it involved risk taking, high expectations and opportunism.
Eventually all colonies used lotteries as a solution from economic problems as well as benefit the colonies. It became a civic responsibility and profits were used to establish some of the first prestigious universities, build churches and even libraries. Lotteries remained popular right to the early 19th 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 allow card games and dice.
The Lower Mississippi Valley became an organized and legitimate gambling area in 1800s. The grand 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 had been blamed for carrying out crimes, debasing morals of society and endangering streets. During 1800s there was 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 kinds of gambling and San Francisco was crowned 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 forms of gambling illegal and a number of 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 possible to now understand what started gambling on sports in the USA. With the many scandals in 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 honest. In 1978 casino gambling was legalized by New Jersey and Atlantic City was a preferred tourist destination. Despite its illegality sports gambling became very popular and already is a billion dollar industry.