To learn what started gambling on sports one has to first examine the history of sports gambling in America. The US had a long history of permitting some kinds of legal gambling and even illegal gambling to a certain degree. Political control and scandals regarding gaming interests have ended in certain backlashes that have lead to prohibition or regulation of sports gambling. Standards and laws relating to sports gambling have kept altering.
Nelson Rose explains these adjustments in law as 3 waves. The 1st 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 while in 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 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 merely a harmless activity. The frontier spirit encouraged the appeal of gambling since it involved high risk, high expectations and opportunism.
Ultimately all colonies used lotteries as a solution out of 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 early 19th Century. Horse racing was also preferred and the Long Island built the 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 with its riverboats was a major trade avenue for wealthy merchants and farmers. New Orleans quickly gained recognition as being the gambling capital. Through the 1830s southern settlers turned against professional gamblers who were held responsible 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 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 also 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 wagering 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 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 was a popular tourist destination. Despite its illegality sports gambling became very popular and already is a billion dollar industry.