To understand what started betting on sports one has to first examine the history of sports gambling in America. The USA has a long history of permitting some kinds of legal gambling and even illegal betting to some extent. Political control and scandals concerning gaming interests have ended in certain backlashes which have resulted in prohibition or regulation of sports gambling. Standards and laws relating to sports gambling have kept changing.

Nelson Rose describes these changes in law as three waves. The first wave was during 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 Twentieth century and also the 3rd wave commenced while in the Great Depression and it’s still continuing.

During the Colonial Era, diverse attitudes were enforced towards gambling. Puritan attitudes were adopted towards gambling and possessing dice, cards, gaming tables etc were outlawed. Later on it had been 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 merely a harmless activity. The frontier spirit encouraged the appeal of gambling as it involved high risk, high expectations and opportunism.

Ultimately all colonies used lotteries as being a solution from economic problems and to help the colonies. It was a civic responsibility and proceeds were utilized to create a number of the first prestigious universities, build churches and even libraries. Lotteries continued to be popular right to the early 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 started to permit card games and dice.

The Lower Mississippi Valley became an organized and legitimate gambling area in 1800s. The grand river with its riverboats became a major trade avenue for wealthy merchants and farmers. New Orleans soon gained recognition as being 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 when operators absconded with the proceeds lottery scandals eventually led to prohibition of gambling.

The Gold Rush in California set off 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 certain 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 possible to now understand what started gambling on sports in the US. With all 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 preferred tourist destination. Regardless of its illegality sports gambling became very popular and today is a billion dollar industry.