To understand what started gambling on sports one has to first examine the history of sports gambling in America. The US had a long history of allowing certain types of legal gambling and even illegal gambling to a certain degree. Political control and scandals concerning gaming interests have led to certain backlashes which have resulted in 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 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 third wave commenced during the Great Depression and is still continuing.
During the Colonial Era, different attitudes were enforced towards betting. 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 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 being a solution from economic problems and to benefit the colonies. It was a civic responsibility and proceeds were utilized to create a number of the first prestigious universities, build churches and also libraries. Lotteries remained popular right to the early 19th Century. Horse racing was also popular and the Long Island built the very 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 mighty river with its riverboats became 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 were 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 whenever operators absconded with the proceeds lottery scandals eventually concluded in prohibition of gambling.
The Gold Rush in California triggered a tremendous 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 also 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 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 US. With all the numerous scandals within 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 straightforward. 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 today is a high dollar industry.