Some say a bloke named Harry Ogden created modern sports betting. Ogden spent quite a bit of time around the Newmarket Heath racecourse in England back in the 1790s. At that time the only way to wager on a horse race was betting whether a horse would win or not win. Essentially the odds on the worst horse were the same as the best horse, essentially no odds at all.
Ogden really spent a lot of time around the track. Enough that he knew the abilities of all the horses at Newmarket Heath and he began assigning odds to each horse’s chances of winning a race. Ogden then took bets from fellow punters looking for bigger returns than the even money bet that was the only option at the time. Bookmaking was born.
Essentially sports betting has not changed since. Bookmakers use their best information to set odds on an event and bettors test their knowledge against those odds. When team sports evolved in the mid-1800s odds were applied to which team was perceived to be the stronger of the two. The next great advance in sports betting came along in the 1930s when a Chicago bookmaker named Charles McNeil invented the point spread that created a number by which the stronger team could expect to win a game.