To learn what started gambling on sports one has to first examine the historical past of sports gambling in America. The US has a long history of allowing some kinds of legal gambling and even illegal gambling to some extent. Political control and scandals regarding gaming interests have led to certain backlashes which have lead to prohibition or regulation of sports gambling. Standards and laws pertaining to sports gambling have kept altering.
Nelson Rose explains these changes in law as 3 waves. The first wave was during the colonial era that lasted up until the mid 1800s, the second wave started at the end of the Civil War and lasted up until the early 20th Century and also the third wave commenced while in 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 high risk, high expectations and opportunism.
Eventually all colonies used lotteries as being a solution from economic problems as well as benefit the colonies. It was a civic responsibility and proceeds were used to create a number of the first prestigious universities, build churches and even libraries. Lotteries continued to be popular right to the initial 19th Century. Horse racing was also preferred and the Long Island built the very first race track in 1665. Casino gaming began to emerge slowly as roadhouses and taverns began to permit card games and dice.
The Lower Mississippi Valley became an organized and legitimate gambling area in 1800s. The grand river featuring its riverboats was a major trade avenue for wealthy merchants and farmers. New Orleans quickly gained recognition as the gambling capital. During the 1830s southern settlers turned against professional gamblers who were blamed for carrying out crimes, debasing morals of society and endangering streets. During 1800s there was increasing attack of gambling especially lotteries and whenever operators absconded with the proceeds lottery scandals finally concluded in prohibition of gambling.
The Gold Rush in California triggered a tremendous surge in the types 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 many cities had licensed gambling centers. But soon the Legislature made most forms of gambling illegal and certain 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 possible to now understand what started gambling on sports in the US. 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 straightforward. In 1978 casino gambling was legalized by New Jersey and Atlantic City became a popular tourist destination. Regardless of its illegality sports gambling became very popular and today is a high dollar industry.