Sports betting has a long history dating back to ancient Rome and Greece. Betting on horse racing and league sports grew in popularity during the Industrial Revolution. Recently many states have legalized sports betting in the wake of US courts overturning PASPA.

Fixed-odds betting involves a wager that specifies a payoff based on sporting outcomes. Bookmakers offer odds or point spreads to provide incentives for gamblers to place bets on underdogs. In pari-mutuel betting, popular in horse racing, the money wagered is pooled and split among winners after the bookmaker’s cut. The pari-mutuel system allows for high odds bets, and assures bettors that all wagers can be honored. Fantasy sports are a form of gambling that allows “owners” to manage fictional teams of real players. Sports betting markets tend to be efficient providing few opportunities for profitable bets.

Leagues can gain from gambling due to sponsorships and increased fan interest but must weigh this against the threat of potential game manipulation. Governments gain from increased tax revenue but must weigh this against the potential revenue losses in other sectors of the economy. Problem gambling is serious psychological disorder that disproportionally afflicts young males and can lead to significant financial difficulties.