Michael The custom seems to originate from the time of the Wild West, where people would, out of exuberance, during festive occasions be firing gunshots into the air. However, this is now prohibited, at least in California, because the fired bullets come back down and have already caused injuries and fatalities.
In one episode of the TV show 'Mythbusters', the two laboratory technicians demonstrated, however, that vertically falling bullets do not pose a danger due to their low falling speed. Because of air resistance, the projectile only reaches a terminal velocity of 320 km/h, which is usually not enough to penetrate the skin of potential impact victims. For comparison: A 9mm caliber revolver bullet travels at about 1,100 km/h, which is more than three times as fast out of the barrel.
Unfortunately, many overzealous individuals do not fire exactly vertically into the air, but deviate up to 45 degrees, which gives the bullet a horizontal component that can still have a deadly effect over some distance. To catch these reckless cowboys, the city of Redwood City in Silicon Valley has implemented a system since last year called Shot Spotter to detect gunshots citywide and determine the exact location of the firing using a sophisticated process. So if someone fires a gun into the air in Redwood City, the police will be on the scene within minutes, ready with handcuffs.