To learn 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 permitting some kinds of legal gambling and even illegal gambling to a certain degree. Political control and scandals concerning gaming interests have ended in certain backlashes which have lead to prohibition or regulating sports gambling. Standards and laws pertaining to sports gambling have kept changing.
Nelson Rose explains these adjustments in law as 3 waves. The 1st wave was in the colonial era that lasted till the mid 1800s, the second wave started at the end of the Civil War and lasted till the early 20th Century and also the third wave commenced during the Great Depression and is 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 outlawed. Afterwards it had been allowed so 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 as 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 proceeds were utilized to create a number of the first prestigious universities, build churches and even libraries. Lotteries remained popular right to the initial Nineteenth century. Horse racing was also preferred and the Long Island built the very first race track in 1665. Casino gaming started to emerge slowly as roadhouses and taverns began to permit 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 soon gained recognition as the gambling capital. During the 1830s southern settlers turned against professional gamblers who had been held responsible for committing 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 led to prohibition of gambling.
The Gold Rush in California set off a huge 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 also by 1850 California and many 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 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 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 straightforward. In 1978 casino gambling was legalized by New Jersey and Atlantic City was a popular tourist destination. Despite its illegality sports gambling became quite popular and already is a high dollar industry.