The centuries-old history of how sports betting became illegal in the United States in the first place

A big Supreme Court decision in May 2018 opened the door for legalized sports betting in America, but it didn’t make it legal on its own. All the court did was wipe out a federal ban on more states permitting sports gambling. Why haven’t more of them already allowed it?

Sports betting has been illegal in most of the country for generations. Let’s start at the horse track a couple of centuries ago.

We’ve gotta go way back, before America was actually the United States. The first horse-racing track in America was established in 1665. Before the Revolutionary War — which was partly funded through lottery revenue — many in the colonies considered themselves English subjects. As such, it makes sense that plenty of things got imported from across the pond. Some of those things were cultural staples like horse racing. The sport has roots in the 12th century, and folks have been gambling on horses running ever since.

By 1868, horse-racing had developed into a much more organized enterprise in the United States, due to the publishing of the American Stud Book — a catalogue of all the thoroughbreds in America. But by the early 1900s, bookmaking was outlawed in the United States and that wave nearly killed horse racing.

“You start out with a general premise that in most states, gambling of any type was, by legislative pronouncement, deemed to be illegal,” Dan Etna, co-chair of the Sports Law Group at Herrick Feinstein LLP, told SB Nation. “Some of this stuff was rather deeply embedded in the states’ DNA, if you will. It wasn’t just the law. Like for instance, at one point in time, New York State, its constitution outlawed gambling of any type.”

Pari-mutuel wagering became the lifeline for horse-racing and a palatable alternative for bettors across the country.

In essence, pari-mutuel betting removes betting against “the house” and puts all wagers in a pool, effectively pitting them against each other. Early machines popped up at the Kentucky Derby in the early 1900s. Bettors took to pari-mutuel gaming quickly, finding it preferable in some ways to betting with bookies. From the early 20th century:

Accustomed to years of speculation with the slates, the majority of racegoers would no doubt prefer to continue to bet in the old familiar way. But it appears to be pretty clearly evident, after two months experience with the machines here and at Louisville, that the public will very shortly become so accustomed to the mutuels that they will bet as freely in the machines as they would in the books. If the mutuels will practically eliminate the former unsavory talk of fraud that was broadcast and that often developed into scandals that aroused the most violent action on the part of reformers, and again in a measure restore the sport of kings to its old time estate, when it was a gentleman’s game, it will have accomplished much.

But outside of horse-racing, gambling continued to develop an unsavory rep.

Gangsters flaunting laws during Prohibition made sure booze, violence, and bookmaking would go hand-in-hand in the public conscience. Baseball’s Black Sox scandal, where members of the White Sox moved to fix the 1919 World Series, didn’t do the industry any favors either. It became a default way for sports’ decision-makers to say no to gambling on integrity rounds. The leagues toed that party line for the next century.

Sports gambling became legal in Nevada in 1949. But sportsbooks there bled dry because of a 10 percent cut the federal government took from them, which would be rolled back.

Notable point-shaving scandals at CCNY in 1951, North Carolina and NC State in 1961, Boston College in 1978, and Tulane in 1985, as well as baseball’s Pete Rose scandal, did little to engineer good faith between gambling and organized sports. Legislators put laws on the books to curb the practice of gambling again, most notably the Federal Wire Act of 1961.

The law made it illegal to place bets or share information about them via wires across state lines. Congress passed a handful of other laws relating to travel, mail, and gambling materials that forced interstate betting operations out of business or underground.

But by the late 1970s, the Commission on the Review of the National Policy Toward Gambling came to the conclusion that two-thirds of the country gambled and 80 percent approved of gambling. The commission threw its hands up and said that “gambling is inevitable,” and enforcing laws against it was “impossible.” But the group nonetheless said that gambling laws on the books should remain.

Professional leagues held firm that gambling was bad for their games, building their arguments around integrity.

And that’s how we ended up with the PASPA, which served as an overarching ban on sports gambling at a federal law, despite most states already prohibiting it. PASPA, signed in 1992, required states to tell the government within a year whether they wanted to have sports gambling within their borders. If they said yes, they’d be grandfathered in. Nevada opted in with a full suite of gambling opportunities. Oregon, Montana, and Delaware wanted to have more limited options. The other 46 states would have no sports betting at all.

Commissioners spoke in front of lawmakers in the run-up to PASPA’s passage. They included then-NBA boss David Stern, who called sports gambling a “national problem.” New Jersey voters said in a 2011 referendum that they wanted sports betting, the idea being that it could help a struggling casino industry in Atlantic City.

The NCAA and other major sports leagues sued and successfully blocked implementation, but the Supreme Court has now deemed PASPA a legislative overreach by the federal government. A majority of the justices bought New Jersey’s argument that Congress had “commandeered” state regulatory power by prohibiting states from legislating the issue.

Some states will hold out on gambling, but many will not.

The process won’t be overnight, but expect the dominoes to start falling soon. New Jersey should have sports gambling infrastructure up and running before the 2018 football season. Pennsylvania, Connecticut, West Virginia, and Mississippi also already have laws in place that they can implement in the wake of the court ruling. Many more states have had bills introduced in their legislatures and will likely legalize sports betting at some point. Expect others, like Utah, to keep their prohibitions on sports gambling on the books in perpetuity.

But the point is that states can now decide for themselves. If they want, they can let their residents do something that has roots in America’s very founding: gamble on sports.