Per Webb Garrison, Why You Say It:

Fall Guy - In the late 1800s, professional wrestling shows traveled the country and scheduled matches, many if not most of which were fixed. One wrestler would agree to take a fall for a stipulated sum and his opponent would promise to handle him gently. But to make a match look good, the winner was often quite rough with the fellow taking the fall, and fall guy came into common speech as a term for loser, victim or dupe by 1900.