History of USA Sports Betting

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The history of USA sports betting can be traced back to the first Europeans to establish a foothold in North America.

Perhaps the Native Americans who already lived here had some form of betting. After all, the indigenous tribes mostly depended on horses for much that happened in their day-to-day lives. It is almost impossible to imagine that they didn’t take opportunities to test horses for speed and stamina and possibly have some sort of wager on the outcome. Adding to that speculation is that for many years, Native American tribes were permitted to operate casinos on reservation territory.  

To supply a complete USA sports betting history would require a large team of people quite some time to assemble anything that might hint at being comprehensive.

For much of the history of the country, betting on sports was illegal, so all the people playing spreads with local bookies on professional or college sporting events were technically criminals.

There were a couple moral objections to gambling. One was that gambling could be addictive for certain types of people, addictive in a way that wrecks lives and relationships. It would not be a problem if those who feel a craving to wager, a craving similar to those that lead to drug, alcohol and nicotine addiction, were winning, but that is seldom the case.

The other moral objection to gambling of any sort was that many gamblers seem to have fun and if there is one thing that the moral high-ground holders dislike, it is the idea that someone, somewhere, somehow, is having fun and there is nothing the objectors can do about it. If you have ever known anyone you could describe with the word grim, you know the type.

In the midst of all this, many religious sects were morally fine with gambling, so long as the church received a cut. They would take in hard currency presenting Bingo games to members who swapped cash for mostly trivial prizes. Raffles were another form of gambling supported by religious organizations. Of course, almost everyone in the U.S. has participated in an office pool for the Super Bowl.

Horse and dog racing can loosely be considered sports. It was legal to bet on racing, provided the betting was done at the track, in many, but not all states. Nevada was the only state that offered off track betting prior to the 1970s. New York State, after trying for years, authorized off track betting in 1970. The intent was to impede illegal bookmakers. Illegal gambling did not go away and never will, but the other purpose behind off track betting was to supply revenue to various levels of government at the state and local level.

It was a heavy lift to establish that first off track betting. For one thing, the operators of racecourses predicted a drop in revenue at track betting windows and less there meant less of any money a spectator might spend on track amenities, such as food and beverages.

The other objectors to off track betting were the bookies themselves, many of which had powerful political connections that in exchange for campaign contributions could be persuaded to craft any law wanted.

All of this changed in 2018.

Prior to that year, anyone who wanted to make a legal sports bet had to do it at a casino in Las Vegas.

In May of 2018, the U.S. Supreme Court voted 6-3 to nullify the 1992 Professional and Amateur Sports Protection Act. That law had made Nevada the only state where a person could wager on the results of a single game.

The actual mechanics of the ruling turned the decision of whether to permit sportsbook betting of any kind, online or in person, over to each of the 50 individual states.

This Supreme Court ruling was not received with enthusiasm by the NCAA, the NFL, NBA, NHL and MLB. The administrators of the NCAA trotted out all the usual arguments about betting corrupting the athletes, endangering their “amateur” status, leading to the collapse of college sports integrity and so on.

No one is suggesting that the NCAA was only interested in protecting their brand, but when some people think of the NCAA, they immediately think of FIFA, the world soccer governing organization that has a long history of corruption at every level.

As for the professional leagues, they could offer arguments of their own, such as criminal gambling elements paying or forcing players to affect the outcomes of games in some fashion. It was convenient for them to say this sort of thing, knowing as they did all along that millions and billions of dollars were wagered on their games

The thinking at the time suggested that New Jersey, New York, Delaware, Mississippi and Pennsylvania were the states ready to quickly get up and running with legal online bookmaking. 

This came at the end of a six-year battle of lawyers as the leagues had used to their benefits for more than 20 years.

During that time, the leagues held sway, winning court arguments at every level until the Supreme Court took the case.

When they saw the writing on the wall and realized that they were going to lose their control, the NBA and MLB did a 180 and began lobbying on the issue in seven states.

The quote from NBA Commissioner Adam Silver was worthy of any politician that has ever lived.

“Regardless of the particulars of any future sports betting law, the integrity of our game remains our highest priority,” said Silver.

Everyone who has a nose on the end of their face knows that the highest priority of any for-profit business is to make profits.

MLB issued a similar statement from the same playbook, “Our most important priority is protecting the integrity of our games,” their statement read in part. “We will continue to support legislation that creates air-tight coordination and partnerships between the state, the casino operators and the governing bodies in sports toward that goal.” This was how the USA sports betting history moved on.

The NFL something of a spectator while all this was happening, preferred to watch the wrinkles unfold until they could no longer risk the integrity of their game. Their statement read, in part, “The NFL’s long-standing and unwavering commitment to protecting the integrity of our game remains absolute,” the league said. “Congress has long-recognized the potential harms posed by sports betting to the integrity of sporting contests and the public confidence in these events.”

Apparently, no one at the NFL has ever considered that their level of integrity in the eyes of the public was nonexistent, judging by the weekly messes their officiating crews were leaving on the fields of every team.

Not to be cynical, but whenever you hear the word ‘integrity’ coming out of the mouths of league officials, their meaning can be made instantly clearer by substituting the word ‘money.’

If anyone wants to know the true reason that online and in-person sportsbook wagering became legal, it is that the lobbyists for legalization outspent the lobbyists for maintaining the status quo.

New Jersey, with its casinos and familiarity with gambling, was able to be up and running by August of 2018, mere months after the Supreme Court ruled.

For those who marvel at how quickly a state government was able to react to the ruling, what must be remembered is that online sportsbooks have been operating in other countries, for more than two decades in some instances.

Those sportsbooks were ready, waiting and chomping at the bit to become established in any U.S. state that would have them.

All the regulatory hurdles and the variety of laws put forth by the various states were the exact same hurdles the major online sportsbooks had been dealing with for years.

The U.S. presented a unique challenge in that it has 50 states. There is no one-size-fits-all, unlike the betting mecca of Australia, where there are just six states and any online sportsbook authorized to operate in Australia is free to operate in any of the states.

This is because there are some states that will never have online or in-person sportsbook betting. Others, like the ones mentioned above, realized that people were going to bet on sports games, illegally or legally, so the path to the vast tax revenue sports betting provides was a path they were eager to take.

The argument can be made that taxation and regulation is both more profitable and less energy-intensive than enforcement, arrest and conviction. It is a valid argument and the figures that have been reported are staggering. The calculation was that if sports betting were worth almost $6 billion in sparsely populated Nevada, states like New York and New Jersey would generate truly eye-popping revenues.

Along with states that will never authorize sports betting and states that jumped at the earliest possible opportunity, are states that decided to go with sports betting because adjacent states were siphoning off money that might otherwise remain within state borders.

A final group of states seems to be taking a wait and see attitude. They might need time to determine if all integrity has left every game and is leading to the collapse of society, or they might just need time to get the proper framework in place.

There was a similar situation taking place earlier that apparently did not make a clear impact on the reality that it is better to collect a cut than it is to chase outlaws.

Talking about marijuana here.

In 2000, the state of Colorado legalized marijuana for medical use. Colorado followed that in 2012, becoming the first state to legalize recreational marijuana use.

This many years after, Colorado is still a nice place and seems to be thriving, thanks to their enlightened embrace of recreational marijuana, assisted by the addition of legal sportsbook betting. Other states have experienced similar benefits, so the case that participating is better than resisting is made in terms of USA sports betting history.

As of early 2023, sports betting is now legal in 23 states.

The big sportsbooks, the ones that have been operating in other countries, often obtain licenses to operate in as many states as they can. The USA sports betting history moves on: gambling market is estimated to be closing in on $100 billion. It is growing and there does not seem to be any end in sight to this growth.

The various states go about sportsbook betting is several ways in the USA sports betting history.

Some states insist that sportsbook companies form a partnership with a brick and mortar casino. Some states’ sportsbooks are run by the state lottery commission and others are given over to Native American tribal interests.

As might be imagined, there is plenty of legal wrangling going on in the pursuit of licenses for sportsbook operations. Most of that wrangling is concerned not with who gets a slice of the pie, but who gets the biggest slice.

There is one thing that is absolutely identical for every state.

The person placing the bet must be physically located within the borders of the state where they want to bet. Physical presence is obvious when the bet is placed in a retail outlet, such as a casino or state lottery outlet.

Most people though, will place bets online from computers, smart phones and tablets.

In order to comply with the physical presence requirement, people wanting to use a desktop computer will need to install a plug-in that is used to determine their location. Cell phones do this automatically, provided that location services are turned on.

Bettors do not have to live in a legal state to join an online sportsbook. They can join from anywhere, and then travel to a legal state.

This probably accounts for some states taking the sportsbook plunge when it was obvious that residents were traveling to neighboring states to place wagers. A prime example is how traffic increased on the bridges crossing the rivers in New York in order to get to New Jersey when that state led the way with sportsbook betting.

Legal sportsbook betting is closing in on its sixth anniversary.

Society has not collapsed, but neither have any of the professional and amateur sports leagues due to the erosion of integrity.

Rafael Mendelson

Betting Expert / Contributor Since 2016

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