Horse Racing in the 1920s

Horse racing was revived in the 1920s and 1930s as track operators convinced legislators that an officially sanctioned pari-mutuel system would profit states significantly.

Colonel Matt J. Winn, president of Churchill Downs, was an important figure during this period because he was able to convince Kentuckians to resist the anti- gambling fervor that had caused neighboring states to ban horse racing.

Winn literally dusted off pari-mutuel machines that were in the back of the track's storehouse and put them into use.

In an attempt to improve racing's image, the colonel banished bookmakers from the track and promised state officials to keep them away permanently.

Through the pari-mutuel system advocated by Winn, which deducted the state's share from each wager, the state was assured a constant source of revenue.

The combined promise of state revenues and an improved image was enough to convince legislators--- some of whom represented constituencies where horse breeding farms were an important part of the local economy--- that horse racing should be tolerated, and in 1906, Kentucky legalized a pari-mutuel system for horse race wagering.

During the reform era, Kentucky remained an example of a state in which horse racing should exist and prosper. In 1920, Maryland also passed a law authorizing track pari-mutuels, and a gradual movement toward this form of betting was underway.

As the Depression exacerbated state's problems with revenue collection, the licensing of pari-mutuel horse racing increased.

By 1935, Illinois, Louisiana, Florida, New Hampshire, West Virginia, Ohio, Michigan, Massachusetts, Rhode island, Maine, and Delaware had passed enabling legislation to cash in on the pari-mutuel bonanza.

In 1938, when California received over $3 million in revenue from its participation in legalized horse race gambling, several other states fell in line. In 1940, New York, the last bastion of bookmakers, expelled its bookies and installed state-sanctioned betting machines.

Although rising attendance and wagering figures in prewar America clearly demonstrated that horse racing was back in a big way, it was a decidedly new game.

Bookmakers, who had been the lifeblood of racing, were now banished to the poolrooms; they didn't fit the new image of horse racing as a state-regulated activity.

Racetrack operators were no longer independent entrepreneurs who could run their businesses as they saw fit.

They were now partners with the state and therefore had to confer with administrative bodies such as racing boards or state commissions to make significant changes in racing practices.

State stewards, charged with protecting the public interest, were appointed to oversee daily track operations.

Racetracks within the same state were not allowed to openly compete with one another and instead had to petition a racing commission for alloted racing dates. State control lent an aura of respectability to horse racing and significantly increased its acceptability.

States now actively participated in activities that previously had been tolerated at best and often prohibited.

Not surprisingly, many people were wondering whether or not other forms of wagering could continue to be condemned as illegal and immoral now that horse race betting was sanctioned and supported by the states.