This is from World Wide Words (link below)

BOOTLEG

From Jeff Martin: "How did bootleg come to mean something of illegal manufacture?"

It's a surprisingly late coinage, first being recorded from Omaha, Nebraska in 1889 (with the related bootlegger being recorded in Oklahoma the same year). Prohibition gave it a huge boost, of course.
Bootleg was at first a literal term. In the days when horsemen wore long boots, their bootlegs were good places to hide things. For example, this description comes from The War in Kansas by G Douglas Brewerton of 1856: "He sports a sky-blue blanket overcoat (a favorite color in Missouri), from the side-pocket of which the butt of a six-shooter peeps threateningly out, and if you will take a look into his right bootleg, we should say that a serviceable bowie-knife might be found inserted between the leather and his tucked-in Kentucky jean pantaloons".
By an obvious-enough figurative extension, illicit goods that had to be kept hidden were referred to as bootleg commodities. The word seems to have been applied specifically to alcohol at first (again, Prohibition helped that association greatly), though more recently its application has broadened to encompass a whole range of other illicit or pirated goods.

World Wide Words is copyright © Michael Quinion, 1996-. All rights reserved.


http://www.quinion.com/words/qa/qa-boo1.htm