A Brief History of Sports Betting in the U.S. – Gambling Laws and Outlaws


When it comes to sports betting, there’s quite a list of gambling laws to go through to start gaining the foundation on everything. There’s a history of regulations and anti-gambing laws that have often involved sports betting. Of course, organized crime has a played a role in its relevancy in the mid 1900s due to the lack of any legal U.S. sportsbooks. These days, states have their own set of gambling laws that supersede government influence. We’ll take a look at things from casino games and lotteries as they all relate to the history of betting in the U.S.

Commencing With the 18th Century

The whole idea of a lottery system in the United States started in this time period. In fact, the American Revolution got part of it’s funding from the taxes on lotteries. Ronald J. Rychlak, Professor of Law at University of Mississippi, states that about two-hundred years ago, “government-sanctioned lotteries were common throughout America.” This was prevalent due to the lack of a strong, central government or any taxes to stabilize things. Not to mention, there was an emphasis already with gaming, particularly horse racing. Roger Dunstan states in his report in the California Research Bureau, “Lotteries were not the only form of gambling during this era. Wagering on horse racing was a popular form of gambling.” The simple card and dice games from the tavernhouses started to transition into a more casino motif. Now, we’ll talk about the 19th and 20th  centuries.

Evolution into the Late 19th and Early 20th Century (Scandals)

Horse racing has been around since the ancient times. When it was adapted to the U.S., it became really popular in the mid to late 1800s, especially with the first Kentucky Derby in 1875. Additionally, card and dice games became available for gambling. Not to mention, betting on different sports, such as boxing started to get prevalent. It had a kind of stalement motif of being legal/unlegal for gambling. Speaking of sports, people began to denounce betting for moral issues. A prime example is the Black Sox Scandal in 1919. It’s said that eight players of the Chicago White Sox ended up throwing the game to receive $10,000 each. This is one of the major reasons why gambling received a bad reputation, and caused major friction with the U.S. banning different facilities. As a result, this is the first sport to hire a commissioner to oversee things to rebuild the sports’ integrity and restore faith with the people. Through the back and forth trouble of banning and legalizing sports betting, Nevada eventually became the first area to accept this form of gambling.

The Transition to Legal Sports Betting in the Mid-20th Century                    

Tourism has always played a role for building an economy. In 1949, Nevada was given the reins to create this sort of need. The state that was all desert land became a goldmine. Gambling gave this deserted area tons of value, because there was a serious void to be filled in the market that this untapped resource could provide. Las Vegas gave different mobsters, like Bugsy Siegel, room to finance different spots on the strip. They were able to spread their influence without the strict rules of other states. By the 1960s, different betting strategies were implemented to illegally get the edge on a particular wager. That’s why Congress became involved through creating The Federal Wire Act in 1961, which prevented people wiring their bet after having prior knowledge or assistance to get a favorable outcome.  Anyone caught in the act was imprisoned to two years/or fined $10,000.  There were other acts in place, like The Travel Act of 1961 and The Sports Bribery Act (1964), to help keep things in order due to illegal gambling rings. Despite these preventative measures, it still happened. In fact, gambling expanded in the 1970s with Atlantic City in New Jersey gaining gaming and casino rights. While illegal sports betting is an issue to different areas, some people proposed an alternative method.

The Present

Despite major opposition from legal sports betting over the years, there are steps being taken to make this happen legally. For one, a lot of illegal activity is being made regardless of it being banned in different areas. However, NBA commissioner, Adam Silver, supports the idea of legal sports gambling. In fact, he feels that’s it fair for the league to get some of the profits. In a 2018 interview on the ESPN show, ‘Get Up!’, he stated: “We think we should be compensated in certain ways for the additional costs we’re going to incur through various integrity measures.

Throughout the past 200 years, there are still measures taken to provide a legal standpoint for those interested in sports betting. As times change and things evolve, it’s only closer to becoming a reality for different aspects of gaming.