A brief history of sports betting in the United States

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The drive in humans to gamble on sports seems almost as strong as the drive to participate in them. Looking back, we will discover that people have been betting on the outcome of sporting events since ancient times.

In the United States, sports betting has existed ever since the first days the colonists came to the New World. While some periods were busier, across the country, gambling and sports betting went hand in hand for centuries, proving people’s interest in the practice and their appeal to it.

OddsMatrix is the partner of choice for over 50 leading sportsbooks, and in this article, we will walk you through a brief history of sports betting in the USA, from the time of colonists to the point of legalization. We will also go through how popular American cities and regions approached sports betting and how authorities viewed the practice over time.

Horse race betting in the New World

The history of sports betting in the USA started in the 1600s, when the early colonists brought horse racing events, including betting, to the New World. Wealthy landowners from Virginia controlled the betting practice, imposing rules that dictated conditions on methods and how much to bet. Like in England, these activities were mainly dedicated to the elites and were governed by a code of honour.

In the mid-18th century, betting became frowned upon, as the Baptists and Methodists considered it sinful. Since the power of Virginians degraded, gambling lost much of its appeal.

In the XIXth century, horse racing returned, as elite jockey clubs started operating racetracks, attracting a diverse audience pool, from affluent bettors to struggling, middle-class gamblers.

The country’s first betting center: New Orleans

New Orleans was America’s first sports betting and gambling center. Although in 1813, Louisiana authorities banned casinos across the whole state, New Orleans was the only city allowed to continue operations. This attracted many adrenaline-loving people who enjoyed poker and roulette games or wanted to place wagers on the era’s most popular sports, such as rooster, alligator, bear fights, and bullfights. As time passed, bettors discovered more attractive options, so in the 1920s, they started directing their attention toward horse racing, boxing, and fencing.

In those days, the city’s excellent positioning as an international port and the dynamic betting scene made it a top choice for travellers. Understanding the financial impact that gambling had on tourism and how the state’s economy could benefit from it, in 1990, governor Buddy Roemer legalized riverboat casinos and video poker. Riverboats became acceptable because they limited bettors’ activity to only 2 hours, as per the duration of the route, and moved operations off-land. As the results were good, in 1992, governor Edwin Edwards also legalized land casinos in New Orleans.

Sports betting needed another 30 years to become officially accepted in New Orleans and the United States. This was due to the regulatory framework and interventions from the major American sports leagues. It was in October 2021 that the first retail sportsbook opened in Louisiana, with Jow Horn, former Saints receiver placing the first legal bet in the state. In the following weeks, other sports betting companies received licenses.

Nowadays, through partnerships with providers like OddsMatrix, sportsbooks offer a wide variety of sports betting odds attracting customers to place wagers on everything from horse racing, American football, and baseball to soccer, tennis, cricket, and table tennis. The OddsMatrix Sports Data APIs give you access to over 14,500 sports competitions, more than 1 million live events, and 913,000 pre-live events yearly.

XIXth century Chicago also attracted bettor’s attention

Illinois plays significant importance in the history of sports betting in the United States, as, in the XIXth century, Chicago became a destination point for sports bettors.

In the whole state and predominantly in Chicago, gambling was particularly popular with immigrants and working-class men, who took advantage of the practice to generate new income streams and earn financial independence. This way, they could rely on something other than their jobs, which most times were not very well paid. Sports betting quickly became associated with masculinity and brought an amount of adrenaline into people’s day-to-day lives.

These bettors placed their money on card games, checkers, backgammon, horse racing, and rat and rooster fights. The most popular places for wagering were the barber shops and saloons frequented by men. In time, several types of other locations developed, as elegant gambling houses opened their doors to the audience.

The elites were also no strangers to sports betting, as they had private horse racing tracks and clubs where they could engage in the practice. Here is where people met to be seen, so they dressed up nicely and enjoyed the social interaction. These events changed how society perceived betting on horse racing, transforming it from a vice into an upscale activity that remains extremely popular even today.

Since the betting industry became a source of salaries, rent, and disposable income, it soon contributed to the city’s financial flourishing, so it was regulated in the early XXth century. As authorities saw its taxation potential, so did the organized crime. Vice lords and racketeers started developing their webs in the city’s poor areas. These high-profile figures developed ties with politicians and police, whom they would bribe for support.

In the 1960s, police reforms and federal law enforcement activity discouraged corrupt protection arrangements. Complementary to these efforts, in the 1980s, antiracketeering laws and witness protection programs reduced illegal betting activity controlled by the mob.

In 1990, Illinois enacted the Riverboat Gambling Act, which regulated riverboat casinos. This led to the opening of the first licensed riverboat casino in Alton. Others followed suit.

In June 2019, Governor J.B. Pritzker authorized sports betting in Illinois by signing the state’s Sports Wagering Act into law. The legislation implemented in 2020 allows for statewide retail and online sports betting at casinos, racetracks, off-track betting parlours, and venues that house professional sports in Illinois.

The first casino that offered sports betting, Rivers Casino in Des Plaines, opened its doors on March 9, 2020. The casino had to close only a week later due to the pandemic restrictions. During these restrictions, online sports betting flourished, and by the end of 2020, Illinois had eight new licensed and operating sportsbooks, of which five offered online sports wagering. The first online sports betting app, BetRivers, went live in June 2020.

How sports betting evolved in America’s favourite destinations

It is clear that the United States’ relationship with sports betting has been complex. In the following, we will look at how the country’s most iconic cities and regions contributed to the history of American sports betting and how the industry evolved in each of them.

New York City – the numbers game and political betting

In the late XIXth and XXth centuries, the history of sports betting was marked by the numbers game or the numbers racket, a form of illegal gambling controlled by outlaws who bribed the local police. This activity was prevalent in New York City.

Indian immigrant Casper Holstein invented the game. It was played at odds of 1 in 1,000, and the payout was usually $600 for a $1 wager. Each gambler would choose a number from 000 to 999. According to Holstein, the winning numbers relied on daily published figures from the New York Clearing House. In the 1930s, the source shifted to intake totals for agreed-upon horse racing tracks.

Also known as the Italian lottery or the Cuban Bolita, the game contributed to the emergence of powerful criminal syndicates in the city.

In the early XXth century, gambling was illegal yet prevalent in New York City, where it happened behind the closed doors of some of the most prestigious private clubs. The two leading names in the city were Saratoga Club and the Bronze Door, both frequented by business figures and industrialists. To operate, they needed to bribe police and politicians.

Blue-collar workers had their share of parlours that catered to their gambling needs. Until the late 1900s, horse betting was permitted only at the tracks, where control was significantly heightened, but in the 1970s, that changed, as OTB (off-track betting) was legalized.

New York City is also known for its history of betting on political elections, as its residents were huge fans of the practice, especially between 1868 and 1940. Turnover generated from wagers on the United States elections was said to have been even higher than on Wall Street. The interest in election betting decreased in time due both to legal restrictions and the emergence of scientific polling. Moreover, the market was significantly more interested in horse racing.

In 2001, after the 9/11 tragic events, the state of New York needed money to rebuild the city. The authorities analyzed the situation and realized the taxation potential of gambling, so they legalized a few NYC Indian casinos and enabled racinos – video lottery terminals, present at racetracks.

It was in July 2019 that the first retail sportsbook, The Rivers Sportsbook, at Rivers Casino, started accepting wagers in New York. After it, FanDuel, DraftKings, and Caesars also opened their brick-and-mortar locations.

Although online sports betting was supposed to follow suit, the pandemic pushed the sports betting reform into 2021, with regulators working on it throughout the year. Online sports betting was launched in New York in January 2022, just before the Super Bowl.

Saratoga Springs

In the XIXth and XXth centuries, Saratoga Springs brought a mix of gambling and well-being to the table. The resort positioned itself as an excellent source of natural mineral springs. On the other hand, its services included betting on horse racing and gambling in the comfort of luxury hotels.

World War II generated a hiatus for the resort, but it all came back to life in 1970 with new legal betting opportunities.

Las Vegas

The state of Nevada, legalized gambling and sports betting in 1931, after the Great Depression, as authorities needed to raise money for the Hoover Dam Project.

Immediately after, games like blackjack, roulette, and craps gained traction, while sports betting remained behind. This happened because bettors started losing their trust in the legitimacy of sports, due to several headline-making scandals. At the time, cases of professional players who were part of illegal schemes that made them throw in games were all across the news, so people were less excited to place their money on these activities.

In the 1950s, Las Vegas started attracting investors from New York, but they were predominantly crime figures who opened illegal gambling venues. In time, due to good access from California and affordable plane tickets, Las Vegas became the United States’ iconic gambling destination. This attracted legitimate investors, who, step by step, purchased the hotels and casinos, eliminating organized crime.

In 1974, the federal government reduced the state’s tax on sports betting from 10% to 2%, generating even more interest from casino operators. In 1975, the Union Plaza hosted the first sportsbook inside a Las Vegas casino, encouraging all other gambling operators to expand their offerings.

One year later, the first modern sportsbook opened in Las Vegas. The Stardust by Frank “Lefty” Rosenthal included six giant screens and 300 seats. This set the bar for future sportsbooks all over the United States.

The XXIst century: online sportsbooks start flourishing

The XXIst century is marked by the emergence of online sportsbooks and casinos that offer users access to many games and markets.

Interstate and international transactions are still illegal in the United States, so operators must open legal entities in each state and respect its specific regulations.

The United States regulatory framework

PASPA has significantly impacted the history of legal sports betting in the United States. The Professional and Amateur Sports Protection Act of 1992 prohibited bets on professional and amateur sports. According to PASPA, wagering on sports was illegal everywhere except for Nevada, Delaware, Montana, and Oregon. The legislation brought many opportunities to Las Vegas sportsbooks that became highly sought after.

In 2018, the Supreme Court struck down PASPA, enabling state governments to set their policies on sports betting.

As the American Gaming Association points out, 31 states and the District of Columbia consider sports betting legal. Five states, including Florida, Nebraska, and Ohio, have legalized the practice, although it has yet to be operational.

Depending on the legal framework adopted by each state, there are specific restrictions that apply and which cover betting markets, authorized operators, and the minimum age required to place a wager.

Positions of the American sports leagues

For a long time, sports betting was associated with match-fixing and was, thus, discouraged by American sports leagues. In time, the activity gained ground, proving beneficial for the leagues that earned popularity due to the high amounts spent on betting. According to the American Gaming Association, the NFL’s revenue might increase by $2.3 billion yearly due to the legalization of sports betting, making the league more tolerant of sports betting and, especially, betting on in-game events.

After the Supreme Court ended the federal ban on sports betting, the four major American sports leagues, representing American football, baseball, basketball, and ice hockey, updated their positions on sports betting, accepting it.

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