To understand what started gambling on sports one has to first examine the history of sports gambling in the US. The USA had a long history of allowing certain types of legal gambling and also illegal gambling to some extent. Political control and scandals regarding gaming interests have ended in certain backlashes which have lead to prohibition or regulation of sports gambling. Standards and laws relating to sports gambling have kept altering.
Nelson Rose explains these changes in law as 3 waves. The first wave was in the colonial era that lasted till the mid 1800s, the 2nd wave started at the end of the Civil War and lasted till the early 20th Century and also the third wave commenced while in the Great Depression and it’s still continuing.
Throughout the Colonial Era, different attitudes were enforced towards gambling. Puritan attitudes were adopted towards gambling and possessing dice, cards, gaming tables etc were banned. Afterwards it had been 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 activity. 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 out of financial problems and to help the colonies. It was a civic responsibility and profits were utilized to create 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 started 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 quickly 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 seemed to be increasing attack of gambling especially lotteries and when 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 US. 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 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 numerous scandals within 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 became a popular tourist destination. Regardless of its illegality sports gambling became quite popular and already is a high dollar industry.