In 1992 Archie Karas, known simply as The Greek, went to Las Vegas, Nevada, with $50 to gamble. Over three years, The Greek amassed a fortune of 40 million dollars, only to lose it all in a few months.
In the early 90s, the transformative message of The Greek’s story captivated the American public; in only a few years, average guy Archie Karas transformed into underdog hero The Greek.
Stories such as Archie Karas’s are pop-culture milestones in the history of sports betting. They illustrate the timeless seductive lure of lady luck, leading to a multi-billion dollar industry development.
Today we will take a closer look at the history of sports betting, the origin of the hobby, its increase in popularity, its long battle with regulation, and its future.
History of Betting
Humans have bet on the outcome of sports and games since their inception. Betting cropped up around the same time as an organized society, illustrating humanity’s natural obsession with a chance.
Romans popularized sports betting in the Western world and are tied culturally to the horse races that popularized sports betting in America. Sports betting is defined as an activity where people wager something, most commonly money, on a predicted outcome.
Origin of Sports Betting
Sports betting is as old as modern civilization. Few sports betting records survived the onslaught of time, leaving modernity with an incomplete picture of how sports betting worked in the ancient world.
However, we know that the Romans had a penchant for sports betting. The most popular form of sports betting was betting on chariot races which became popular circa 753 BCE. The Romans also bet on games and, strangely enough, the circus.
Evolution of Sports Betting
To the dismay of our cultural ancestors, chariot races have fallen out of fashion. Modern horse racing has slimmed down somewhat, discarding the gladiator and cart in favor of a jockey.
The Romans may also be dismayed to hear people no longer bet on the circus. I know, sad. This is not to say that there is a lack of betting options for modern bettors. In fact, despite increased regulations and restrictions, betting options today are more numerous than ever before.
Popular sports betting options include boxing, auto racing, basketball, football, baseball, hockey, cycling, and American football. Sports betting also encompasses less popular sports such as arm wrestling, darts, and pool.
While the sports bet on have changed somewhat since Rome, the premise of sports betting has remained almost unchanged since ancient times. Either your team wins or loses. You either win money or lose your investment based on how you bet.
Betting can be informal or formal. Informal betting can be something as simple as a bet placed between friends. Anyone who has ever participated in a fantasy football league with their friends is familiar with informal betting.
Informal bets rely on the word of the bettors. All parties agree to the terms of the bet before participating. Since everyone knows each other, the bet’s losers are expected to pay up to maintain amicable relationships.
In contrast, formal betting uses a middleman, often called a bookie, to manage sports bets. A bookie is responsible for setting the odds of an event on which bettors place their wager.
Formal betting is laden with rules and regulations aimed at making the activity of sports betting legal and safe.
The Development of Sports Betting: The Role of the US
Surprisingly, the United States is not the most popular country for sports betting. By the numbers, betting on sports is more popular in Australia, Singapore, Finland, and even Canada.
Still, the US is home to most sports that are popularly bet on today, making it the best country to use to understand how sports betting has developed over time. Formerly an exclusive privilege of wealthy aristocrats, sports betting has become a mainstream hobby practiced by millions of enthusiasts.
In the US, the sports betting industry was worth an eyepopping 52.7 billion dollars in 2021. The global sports betting industry is worth almost five times the US sports betting industry but bets predominantly on American sports.
But how did the sports betting industry grow to its current size? After all, sports betting was outlawed in the United States in 1992, so what happened? The answer lies in the growth of sports culture.
The phenomenon of betting was present in the United States from its inception as a colony state of England. Formal betting was the exclusive privilege of the aristocracy. Still, informal betting was an integral part of vernacular culture.
America’s puritan identity during the 17th century meant that although betting was ubiquitous, it largely took place on the fringes of society. American society understood that betting would naturally take place, but they tried to limit its influence by stigmatizing it.
Ostracizing betting and bettors from mainstream American society worked for the better part of 200 years, but things started to change on the eve of the Civil War.
The Importance of Horse Racing
It wasn’t until the early 19th century, when the social codes surrounding horse racing became more informal, that sports betting began to make its way into popular US culture.
Horse races, already popular in other countries such as the UK, had been a part of American culture since the colonies were settled.
Popular American figures like Benjamin Franklin and Andrew Jackson had an affinity for horse racing, setting the sport up for its explosion in popularity that would soon follow.
Despite its popular appeal, horse racing was reserved for an exclusive club of rich gentlemen who owned purebred horses, which limited the sport’s official growth. Nevertheless, the aristocracy could not stop commoners from organizing and betting on illegal horse races.
Official horse racing and betting remained a privilege of rich aristocrats up until the Civil War. The Civil War redefined and reorganized American social classes, greatly altering the social norms of American society. One unintended effect of this social reorganization was a shift in the demographics that watched horse races.
Previously a spectator sport for wealthy horse owners, horse racing opened its gates to the American middle class in the late 19th century. Horse racing’s shift in exclusivity was due to the introduction of sports betting.
As more and more racing horses made their way into the hands of the aristocracy, the sport of horse racing shifted from a demonstrative game of class to a game of lucrative popular entertainment. Betting was introduced as a way to entice customers to visit the track.
The effect was twofold, horse racing became immensely popular with America’s poor and middle class, and sports betting made its first foray into accepted mainstream American culture.
Sports Betting Hits a Homerun, then Strikes Out
American society’s affection for horse racing scrubbed away some of the social stigma previously associated with betting and laid the groundwork for other forms of sports betting.
A few decades after horse race betting opened to the public, America’s pastime, baseball, was recognized as an official sport.
The official recognition of baseball gave the American public a new sport to bet on. Less esoteric than horse races, baseball was a sport Americans were familiar with and, as such, more willing to bet on.
Baseball’s popular appeal helped sports betting spread to a larger audience, but the influence was not single-sided. Betting, for its part, began to influence baseball, most notably in the form of fixed or thrown games.
The most notorious example of betting’s influence on baseball was the 1919 World Series scandal which revealed that eight White Sox players were bribed to throw the series. The scandal greatly affected the American public’s perception of sports betting.
Baseball’s national appeal introduced an entire country to the effects unregulated sports betting could have.
Cheating existed in horse racing long before it occurred in baseball. However, baseball was much closer to the heart of the American public, which made the discovery of a fixed game at the highest level of competition much more impactful on the perception of sports betting than a fixed horse race.
Baseball’s connection to America’s national identity led many citizens and lawmakers to question the ethics of sports betting. In the early 20th century, baseball had become an integral part of American identity that unified the nation.
To many Americans, a fixed world series indicated a lack of morality, a lack of morality instigated by sports betting.
Sports Betting in the 20th Century
Despite the negative press of the White Sox scandal, sports betting grew in the United States during the 20th century, in large part because of the official recognition of new sports and a lack of legal enforcement.
The growth of sports betting during the 20th century was aided by the recognition of basketball and American football as official sports.
Basketball and American football were different enough from baseball to allow bettors to distance themselves from the White Sox scandal and still enjoy the entertainment of betting on popular sports.
Sports betting was formally illegal in the US during the 20th century, but vague laws and loose enforcement allowed the activity to continue unchecked. Law enforcement’s blind eye and an underwhelming regulatory response allowed the proliferation of sports betting in America.
It wasn’t until big-time organized crime involved itself with sports betting that the US government began to pay closer attention. The mob’s involvement in underground sports betting resulted in the Interstate Wire Act of 1961, which pushed sports betting back to the fringes of American society.
Still, many states, including Oregon, Montana, and Delaware, pushed for the legalization of sports betting in the 70s and 80s.
In response to the state’s increased interest in sports betting, Congress passed the Professional and Amateur Sports Protection Act of 1992 (PAPSA), outright banning the activity of betting on sports in the United States.
States such as Nevada, which already had established gambling permissions, were allowed to continue to operate their sports betting industries. Still, even in legal states such as Nevada, sports betting was relegated to small local regions, most notoriously to Las Vegas.
Like a child forced to do something, the sports betting industry rebelled against regulation by moving underground, onto tribal lands, and overseas. In spite of tightening restrictions, sports betting continued to grow in popularity during the late 20th century.
Sports Betting in the 21st Century
In the 21st century, sports betting resurfaced in American pop culture because of the internet.
The proliferation of the internet in the 21st century reintroduced sports betting to mainstream America and led to some of the largest sports betting wins in history. Several online sportsbooks also appeared in the early 2000s, greatly increasing the accessibility and ease of sports betting.
Sports betting’s return to mainstream culture garnered the attention of the US government once again. The success of online betting platforms indicated a market for sports betting existed, but the US government doubled down on its anti-sports-betting position.
In 2006, Congress passed the Unlawful Internet Gambling Enforcement Act (UIGEA) in an attempt to curb online betting. Having wizened since its last square off with sports betting, the US government decided to indirectly regulate betting.
Unable to combat the popularity of sports betting itself, the US government set its sights on the financial instruments used to fuel online sports betting.
UIGEA gave the Federal Deposit Insurance Corporation (FDIC) the authority to restrict the use of credit cards, checks, and wire transfers for online sports betting, thereby indirectly crippling the domestic online sports betting industry.
The sports betting industry responded, as before, by moving offshore. Many online sports betting businesses are located in countries where remote gambling is legal, allowing US-based bettors to place sports bets without fear of legal repercussions.
It was, for the time, a satisfactory answer to the question of how to regulate sports betting.
Fast forward a few years to 2018 and the US sports betting industry looks dramatically different due almost exclusively to the overturning of PAPSA.
That’s right, after a century of failed regulation attempts, the US government overturned PAPSA, leaving it up to the states to decide how to regulate sports betting.
Within a year of the PAPSA overruling, numerous states, including New Jersey, Pennsylvania, Oklahoma, Virginia, and Washington, established sports betting markets.
It is difficult to say why PAPSA was overturned after the US government fought so long to regulate sports betting. The official reason PAPSA was overturned was that sports betting was deemed to be a state issue.
PAPSA isn’t the first time the US backpedaled on a law. Still, the complete 180 on the topic does raise some eyebrows. The most logical conclusion is that the US realized the inevitability of sports betting and decided to prevent the industry’s revenue from leaking overseas.
Whatever the reason, sports betting is now legal in over half of US states, with an additional 13 states looking to legalize some facet of sports betting by 2023.
The Future of Sports Betting
Similar to other historically illegal industries, such as alcohol production, the widespread legalization of sports betting has triggered an explosion in popularity. A quarter of the US population aged 35-44 placed weekly sports bets in 2021.
But it’s not only boomers placing sports bets. Millennials are also getting in on the action. An estimated 12% of millennials placed sports bets weekly in 2021, a percentage that is likely to grow as online sports betting services become increasingly accessible.
The advent of sports betting models has also increased the popularity of sports betting. Sports betting models use algorithms to predict the probability of event outcomes. Bookies and hobbyists alike have adopted the tool of sports betting models to increase betting earnings.
Cryptocurrency or crypto, such as bitcoin, has also played a role in popularizing sports betting. Bitcoin’s security features make it ideal for placing bets; Its deregulated nature also means that the FDIC has less control over sports bets placed with bitcoin.
- Gambling in ancient Rome: https://ultimatehistoryproject.com/in-rome-all-was-fair-in-games-and-races.html
- Sports betting market: https://frontofficesports.com/us-sports-betting-doubled-in-2021-surpassing-52b/
- Sports betting popularity by country: https://www.worldatlas.com/articles/countries-that-gamble-the-most.html
- Horse racing in America: https://stmuscholars.org/early-horse-racing-in-america/
Here are some commonly asked questions about the history of online gambling.
What was the largest bet ever won?
The tragic story of The Greek has a sequel. The Greek was fortunate enough to win 17 million in the early 2000s, adding to the gambler’s mystique.
How has technology affected sports betting?
Technology such as AI has mitigated some of the risks of sports betting. Sports betting is a game of chance, but the use of data analytics, algorithms, and AI have greatly increased the predictability of sporting events
How long have sports betting been around?
2,000 years ago.
When did betting become legal in US?