The American, who had to qualify for the event, kicked off the eagerly-awaited tournament with a sensation as he breezed past the 'Queen of the Palace'.
Gates came back from a leg down to lead 4-1, before Sherrock responded by winning the sixth leg.
That, however, was as good as things got for the English player as Gates closed out the win with impressive finishes of 70 and 82.
Sherrock posted the lowest three-dart average of the opening round, managing a mere 71.44.
"The energy was something I've never experienced here in North America before - it was great!" admitted Gates.
"It wasn't her A-game but she's done a lot of great things for darts and women's darts, and I applaud her. She's definitely the crowd favourite but I had to play my game."
Gates will now turn his attention to Peter Wright after the world champion beat top-ranked American Danny Baggish.
Snakebite had to fight off a valiant challenge from the Gambler who took an early 2-1 lead.
Wright completed a 12-darter in the following leg with a 121 finish - a moment which sparked a run of three successive legs for the Scotsman.
From that point on, there was no coming back for Baggish who had to settle for a 6-4 defeat.
"The crowd tonight was all behind USA and darts is the winner tonight - we're lucky to be playing here in New York," said Wright, who wore a specially-designed shirt themed on a New York taxi.
"I missed a few doubles here and there but I don't think I had the right glasses on and I'll have to try my normal ones tomorrow.
"I was a little bit rusty but I'll brush up on that. I want to be the first one to win this tournament but there's a long way to go yet."
Former US Darts Masters champion Gary Anderson enjoyed a 6-3 victory over Matt Campbell in order to set up a second-round clash with Michael Smith.
Bully Boy, who set the second-highest average in the opening round, beat big-stage debutant Doug Boehm 6-3.
James Wade didn't miss a single throw at double as he produced a flawless performance to beat Jeff Smith 6-2.
The Machine will now face Michael van Gerwen, who posted the highest average of the opening round (96.24) during his 6-4 victory over Jules van Dongen.
"I'm happy to win," said Van Gerwen. "I let him into the game but it's the game of his life - his first time in front of his home crowd but I did the right thing at the end."
Elsewhere, Jonny Clayton and Gerwyn Price will go head-to-head in an all-Welsh match-up after beating Danny Lauby Jr and David Cameron respectively.
US Darts Masters - remaining draw
Jeff Smith vs David Cameron
Jules van Dongen vs Leonard Gates
Matt Campbell vs Danny Lauby
Danny Baggish vs Doug Boehm
Smith/Cameron vs Van Dongen/Gates
Campbell/Lauby vs Baggish/Boehm