Learn about the United States’ complicated history with sports betting. Find out where we’ve been and where we’re heading.
To best understand where gambling legislation might head in the future, we need to look back at America’s long, complicated past with sports gambling. While the country has sought to ban sports betting for a long time, that hasn’t stopped the people who’ve really wanted to wager on sports, creating a prolonged tug-of-war.
Today, sports betting has entered the mainstream as a regular form of entertainment for many Americans — but how did we get here?
The Ancient Greeks and Romans Probably Got It Started
Like with many other Western cultural touchstones, we can say that the ancient Greeks had a big hand in shaping the concept of sports betting. Would it really shock anyone to learn that the inventors of the Olympic Games would bet amongst themselves on who would win the events?
And, just like in more modern times, Greek authors and philosophers decried gambling, and governments moved to reduce its influence.
Then, in another move that should surprise no one who knows Western history, the Romans took on this Greek pastime — though instead of vilifying it, they legalized it. Romans bet on gladiatorial games, and even when that came to an end, the practice of sports gambling survived and continued on.
The English Loved Their Horse Racing
By the 1700s, betting on horse racing had become quite the diversion for well-heeled English aristocrats. In the 1790s, entrepreneur Harry Ogden became the first known bookmaker in history. He lived close enough to a racecourse that he and his fellow gamblers could see the races and verify the results but not so close that he would get in the way of any race administrators.
Ogden realized that some horses were better than others, so he set different prices on particular horses. This allowed bettors to start thinking tactically, having to choose for more security and bet on the favorite or take a real gamble and bet on an outsider on the chance that they could win more money. He was even forward-thinking enough to build a profit margin into his book by adjusting the odds, just as sportsbooks still do today.
At the time, gambling was generally restricted to pub sports like roulette or darts. However, the rules were difficult to enforce. And, if someone felt that Ogden or a successive bookmaker like him had cheated, they could get no legal recourse. The British government took the view that if you were stupid enough to bet money, you had no right to any legal protections.
The Revolutionary War: Funded by Gambling?
And now we move to the other side of the Atlantic, also during the 1700s. We all know the tales about why the American Revolutionary War got started: no taxation without representation. But an amusing part of history that we don’t tend to hear about is that the war was partly funded by taxes on lotteries held within the original colonies.
Because the colonies lacked both a strong central government and a robust tax base, lotteries became legitimate ways of raising revenue. The proceeds from lotteries went to build cities, establish universities, and, yes, finance the war. In fact, the Continental Congress voted for a $10 million lottery to fund their war efforts.
Of course, a major English pastime that had spread to the colonies was wagering on horse races. Perhaps because it was such an old sport that was part of the American fabric long before independence, horse racing has remained legal across the U.S. and has been treated as separate from other sports betting. No American can think of major horse races like the Belmont Stakes or Kentucky Derby without the wagering that happens on such events.
Other sports gambling began to crop up, like betting on boxing. These practices weren’t truly legal, but they weren’t expressly illegal either.
Scandals Pile Up in the 20th Century
Come the early 1900s, sports gambling in the U.S. had become a huge industry that started to affect the games it was supposed to be observing. The big moment in sports betting history came with the 1919 Black Sox Scandal, when eight members of the highly favored Chicago White Sox threw the World Series to the Cincinnati Reds. The players involved were allegedly bribed for roughly $10,000 apiece by various syndicates, and the resulting legal firestorm led to all of them being banned from baseball.
After this, states started bringing the hammer down on gambling, targeting gaming operators and bookies. League commissioners started invoking morality and saying that gambling on sports would ruin “the integrity of the game.”
Organized Crime Embraces Sports Betting
By the mid-20th century, someone had to fill the void that had been created by the absence of legalized betting, and that someone was organized crime.
In 1949, Nevada legalized sports betting to try to reinvigorate tourism to the state. The state had already legalized most forms of gambling 15 years earlier, but the lack of legal sports betting left them a great chance to enter a new market. Investors in Las Vegas destinations included mobsters like the infamous Bugsy Siegel, tying much of Las Vegas’ industry to organized crime mixed with gambling.
Outside of Nevada, organized crime also had a strong grip over the sports betting market. To try to combat this, U.S. Attorney General Robert F. Kennedy worked with Congress to create laws that would allow the federal government to have some legislative power over sports gambling. This led to the Interstate Wire Act of 1961 (also known as the Federal Wire Act), which restricted gambling from occurring across state lines.
In reaction to organized crime running much of the sports-betting industry, Congress passed gambling legislation that tried to snuff it out. But they didn’t, really — people just found other workarounds.
People Start To Rethink Keeping Sports Betting Illegal
In 1976, the report Gambling in America by the Commission on the Review of the National Policy Toward Gambling was published. After three years of research, the commission came to the realization that two-thirds of the American people indulged in gambling and that most Americans saw no real distinction between going to the track to place a bet versus going to their local bookmaker to back their favorite horse.
The commission made this statement: “Contradictory gambling policies and a lack of resources combine to make effective gambling law enforcement an impossible task under present conditions.” The commission went on to recommend that federal policies be reviewed when it came to sports betting and allow the voters to shape future legislation.
Regardless of the commission’s findings, many states still kept sports betting officially illegal, forcing that majority of Americans who indulged to find underground avenues.
Then the Federal Government Officially Gets Involved
In 1992, Congress passed the Professional and Amateur Sports Protection Act, which effectively banned states from legalizing sports betting. PASPA was vocally supported by sports commissioners, including then-NFL commissioner Paul Tagliabue, who said that sports betting “threatens the character of team sports.”
In 2002, legislators were wondering if the Interstate Wire Act applied to sports betting via the internet. The case made it to the U.S. Fifth Circuit Court of Appeals, which stated that the Wire Act clearly applies to internet sports gambling.
Then, in 2006, Congress tried to make it harder for online casinos and sportsbooks to operate. They passed the Unlawful Internet Gambling Enforcement Act, which forbade anyone in the country to accept funds via credit, EFT transfer, or other digital methods for wagering. This meant that tons of offshore sportsbooks ditched U.S.-based customers, and anyone who wanted to bet on sports was driven further underground.
Following an attempt by New Jersey to flout PASPA and legalize sports betting, the U.S. Supreme Court eventually heard a case in 2017-2018 about the constitutionality of a federal ban. In the end, the court decided that PASPA was unconstitutional, and this paved the way for states to determine whether or not they wanted to legalize sports betting on their own terms.
Daily Fantasy Enters the Spotlight
While the federal government was debating how much they wanted to ban sports gambling, daily fantasy sports came into existence. Similar to traditional fantasy sports, daily fantasy participants draft a fake team of different players and have their team face off against another fantasy team. But instead of the whole process occurring over an entire season, daily fantasy sports can have matchups happen over the course of one day or one weekend.
Plenty of people were up in arms about how quickly daily fantasy took hold of the popular imagination, with many saying that it should be just as illegal as regular sports betting because it still involves wagering money on a sporting outcome. However, daily fantasy has remained in a legal safe space because it’s viewed as a skill-based activity (much like playing the stock market) that requires knowledge and research to win rather than sheer luck.
Today, DFS exists side-by-side with sports betting in many states, with each offering its own form of entertainment as an add-on to enjoying sports.
The Future of Sports Betting Looks Brighter
Now, the pendulum seems to have swung back toward being more in favor of legalized sports betting. Over time, attitudes have shifted from a more Puritanical point of view about gambling as a serious vice to a more utilitarian perspective on the matter. Individual states are passing their own laws to regulate sports betting, hoping to take advantage of tax revenues and keep gambling more on the level.
As more people embrace sports betting, the more likely its legalization will continue to spread. This means states can share the wealth being spread around, and more people can add another thrill watching their favorite teams or players by putting some money down.
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