To understand what started gambling on sports one has to first examine the historical past of sports gambling in America. The USA has a long history of allowing certain types of legal gambling and also illegal gambling to some extent. Political control and scandals concerning gaming interests have led to selected backlashes which have resulted in prohibition or regulating sports gambling. Standards and laws relating to sports gambling have kept changing.
Nelson Rose describes these adjustments in law as three waves. The first wave was during the colonial era that lasted till the mid 1800s, the 2nd wave started following the Civil War and lasted till the early Twentieth century and the 3rd 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 possession of dice, cards, gaming tables etc were outlawed. Later on it was allowed so long as it was not a calling or trade but 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 risk taking, high expectations and opportunism.
Eventually all colonies used lotteries as a solution from financial problems as well as benefit the colonies. It was a civic responsibility and profits were used to create some of the first prestigious universities, build churches and also libraries. Lotteries continued to be popular right to the initial Nineteenth century. Horse racing had also been preferred and the Long Island built the very first race track in 1665. Casino gaming started 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 featuring its riverboats became 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 whenever operators absconded with all the proceeds lottery scandals finally led to prohibition of gambling.
The Gold Rush in California set off a huge surge in the kinds of gambling and San Francisco was crowned 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 a number of professional gamblers were lynched. This prohibition drove wagering activities underground and could 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 many 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 honest. In 1978 casino gambling was legalized by New Jersey and Atlantic City became a preferred tourist destination. Despite its illegality sports gambling became very popular and today is a high dollar industry.