To learn what started gambling on sports one has to first examine the history of sports gambling in the US. The US has 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 resulted in prohibition or regulating sports gambling. Standards and laws pertaining to sports gambling have kept changing.
Nelson Rose explains these adjustments in law as three waves. The 1st wave was in the colonial era that lasted up until the mid 1800s, the second wave started following the Civil War and lasted up until the early 20th Century and also the third wave commenced during the Great Depression and is still continuing.
Throughout the Colonial Era, diverse attitudes were enforced towards gambling. Puritan attitudes were adopted towards gambling and possession of 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 with them views that said gambling was nothing but 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 a solution out of financial problems as well as benefit the colonies. It became a civic responsibility and profits were used to establish a number of the first prestigious universities, build churches and even libraries. Lotteries continued to be popular right to the initial Nineteenth 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 started to allow card games and dice.
The Lower Mississippi Valley became a structured and legitimate gambling area in 1800s. The mighty river with its riverboats became a major trade avenue for 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 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 all the proceeds lottery scandals eventually led to prohibition of gambling.
The Gold Rush in California triggered a tremendous increase 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 forms of gambling illegal and a number of professional gamblers were lynched. This prohibition drove gambling 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 all 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 straightforward. In 1978 casino gambling was legalized by New Jersey and Atlantic City was a preferred tourist destination. Regardless of its illegality sports gambling became quite popular and today is a billion dollar industry.