Wrestling was as serious as prizefighting and horse racing back in the day, but in the early part of the 20th century, spectators realized that legitimate wrestling was rather boring. Promoters stepped in to make it more exciting, and it became "staged" (which is a better description than "fake"). Those who produced the matches did anything they could to put butts in the seats. It wasn't long before betting died out of pro wrestling, but there was always money in tickets and later on TV. And there were plenty of other sports one could place a bet on.
This latest video from Today I Found Out goes through the history of wrestling and the steps taken to make it entertainment. You can skip to 1:18 to get to the subject matter. (via Boing Boing)
Boing Boing is fake as well, but at least some of the personalities in wrestling are likable.
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