History of US Sports Betting

The sports betting industry has come a long way over the past century and longer. The industry is booming in the United States right now as it continues to legalize and expand across the country, though there were certainly some hurdles across a variety of platforms to get to where we are today.

While the US may not be as open as some other countries, sports betting continues to gain traction and become legal in an increasing number of states, including Virginia. Before you place your next wager, or if you just want a detailed explanation of how sports betting came to be, here’s a look at the history of sports betting in the United States of America.

Horse racing in the 1800s

Horse racing and betting are directly connected, and likely a reason the sport continues to flourish to this day. Betting on horse races is among the oldest forms of sports betting in the nation. Formal betting on horse races in the US began with organized events in the late 1860s.

The Triple Crown races remain popular among sports bettors and even casual sports fans, and they all got their start in the 1800s. It started with the Belmont Stakes, which debuted in 1867 in the Bronx, New York. The Preakness Stakes arrived a few years later in 1873. In 1875, the biggest US horse race of them all, the Kentucky Derby, ran for the first time. All three races are still available for watching and betting to this day.

Even as laws were passed that deemed sports betting illegal, horse racing was exempt from that and remained a legal way to wager on sporting events. With the Interstate Horse Racing Act of 1978, tracks were allowed to accept wagers outside of the state where the race was located.

Though millions of people in the United States now have the option to bet on any sport they’d like for the most part, horse race betting still remains big business.

The Black Sox scandal of 1919

The Black Sox scandal still serves as a cautionary tale to sports leagues as they decide how to handle the increase in sports betting for their games.

In the early part of the 20th century, as more sports leagues continued to form, sports betting started to increase. Sports bettors were placing wagers on college football, boxing and Major League Baseball.

In 1919, the Chicago White Sox were heavily favored in a best-of-nine World Series against the Cincinnati Reds. Chicago ended up losing the series in eight games, and players were accused of accepting money from several criminal figures to lose the series on purpose.

The eight players who were accused were permanently banned from baseball, though all were acquitted in court. Regardless, the scandal raised the profile of betting on sports as an issue for the growing number of professional leagues.

There is certainly reason for professional sports leagues to be wary of a repeat, but it’s highly unlikely players would get involved with something like this in today’s game. The amount of money in the current professional sports landscape makes it difficult to imagine players even considering getting wrapped up in something like this.

Nevada legalizes sports betting in 1949

Many states put a ban on sports betting, making it illegal to bet on athletic competitions, though the laws were rarely enforced. Nevada went in the opposite direction and became the capital of sports betting. In 1949, the state became the first to embrace wagering on sports.

Already a fixture in the gambling space, Las Vegas identified itself as the leader in sports betting. For a long time, Nevada was the only state in America that allowed sports betting.

The Interstate Wire Act of 1961

With Nevada as the only state with legal sports betting, that did not stop it from happening illegally elsewhere. There was plenty of demand for sports betting across the country, and it was done through organized crime with bookmakers in major cities.

In 1961, Congress passed the Interstate Wire Act with the aim of curtailing organized gambling across state lines. The intent was to stop organized crime from benefiting from illegal sports betting revenue. The law was also cited as making online sports betting illegal in the United States once technology became more advanced.

Professional and Amateur Sports Protection Act of 1992

Sports betting took another hit with PASPA, which stands for the Professional and Amateur Sports Protection Act. PASPA was passed in 1992 but did allow the four states that already had legalized sports betting to continue operating as normal, with sports betting in Nevada and sports lotteries in Delaware, Montana and Oregon. However, for the rest of America, sports betting became an illegal activity.

PASPA came into being three years after Pete Rose was banned from baseball for betting on MLB games he was involved in. Rose bet on his own team as the manager of the Cincinnati Reds, which is what organized professional and college leagues are afraid of as it damages their credibility.

UIGEA (2006) and the crackdown on offshore betting

After PASPA went into effect, sports bettors had to look for other ways to place wagers. Offshore betting refers to placing bets at sportsbooks that are operating outside of the United States. This business boomed with the rise of the internet.

Then, in 2006, the United States passed UIGEA, which stands for the Unlawful Internet Gambling Enforcement Act. That made it illegal for people to accept money from these offshore sportsbooks. While it has been fairly prevalent for a while now, the US has never made significant moves to stop illegal offshore sportsbooks, though it has cracked down on this type of operation happening inside the country.

New Jersey and PASPA repealed in 2018

If you want to credit one state for the recent increase in legalized sports betting across the United States, look no further than New Jersey. The state took on PASPA in 2009 in a lawsuit. Originally against the idea of moving forward with the lawsuit, then-Gov. Chris Christie eventually decided to support the legal fight.

New Jersey passed a law legalizing sports betting at certain licensed locations and was sued by all the major sports leagues, including the NFL, MLB, NBA, NHL and NCAA. The initial ruling went against New Jersey in district court, but the state appealed the ruling, and the case made its way to the US Supreme Court.

In May of 2018, the Supreme Court sided with the state and repealed PASPA in a victory for the sports betting industry. New Jersey became the first state outside of Nevada to offer legalized sports betting, and paved the way for others to follow.

Expansion of legal sports betting in US

In the two years since the court’s decision, more than two dozen states have legalized sports betting, with more coming over the next few years. Other states may take many years and some may never be open to the idea of legalization, but sports bettors in states that allow it are enjoying the benefits.

States are benefiting, as well, with taxes on the industry, and bettors now have a safe place to wager if they choose to do so. Sports betting has come a long way, but it’s likely here to stay in the United States and could change the way we view sporting events.