Utah's Gamble with Pari-mutuel Betting in the Early Twentieth Century

Utah's Gamble with Pari-mutuel Betting in the Early Twentieth Century

BY BRUCE N. WESTERGREN

HORSE RACING IS PERHAPS ONE OF THE MOST ANCIENT SPORTS; popular in Europe during the Middle Ages, its history extends at least as far as the Roman Empire. Spanish conquistadors, French traders, and British settlers brought horse racing to North America during the sixteenth and seventeenth centuries. In the eighteenth and nineteenth centuries the sport accompanied American pioneers on their westward trek across the continent.

During the late nineteenth and early twentieth centuries horse racing not only grew and spread in range and popularity, it also went through some important changes in organization and administration. Instead of one-heat matches between local favorites the sport became more organized and formal. In place of competitions through town streets or open meadowland, backers across the country financed the construction of a number of large, permanent oval tracks, built according to an agreed-upon pattern and standardized length and capable of fielding a number of horses for a single race. Uniform contest rules were established during this time as well.

With the sport's increasing standardization and formality there emerged a professional class of track officials and employees. Starters, judges, jockeys, and stable hands, once chosen from among the local townspeople, now became full-time professionals, trained and certified by professional occupational associations according to established requirements. Each racing official sought to ensure the highest level of integrity in each match, to protect the public from unscrupulous bookmakers and bunco artists, and to make sure that spectators saw competition of the highest order.

In spite of these efforts to guarantee honest competition, social reformers of the early twentieth century repeatedly attacked the professional standards of the racing associations and the morality of the sport as a whole. These crusaders saw horse racing as the very epitome of the evils of gambling and its devastating impact on society.

Stung by these criticisms, the professional racing associations sought to maintain strict discipline among their members and enforce sanctions against the wayward. This self-enforcement, along with the publicity it received, demonstrated the groups' abilities to police themselves and helped save racing from complete extinction under government probes and oppressive legislation introduced by Progressive elements in the early I9OOs."

In many ways racing developments in Utah paralleled those on the national scene. Horse racing enjoyed a large following in Utah both before and after statehood. Local races were fairly common occurrences during Utah's territorial period. By 1909, however, professionals were organizing and supervising races in various parts of the state on a regular basis, adopting the same standard rules and procedures used elsewhere in the country. These meets, which usually ran from late May through the end of September or early October, were held principally at three tracks — the Utah State Fairgrounds at Salt Lake City, the Lagoon track near Farmington in Davis County, and the Buena Vista track at the Weber County Fairgrounds outside of Ogden — although races were held on a regular basis in other counties during this period, usually at the county fairgrounds in conjunction with the county fair.

In spite of the Progressive movement's penchant for lobbying for state control of questionable enterprises, by 1910 Utah still had no state agency authorized by law to regulate and monitor horse racing and the bookmaking that inevitably accompanied it. Bookmakers, in fact, were hired and licensed by the tracks themselves to handle most of the betting.

The perception of dishonesty associated with racing activities, particularly the use of bookies by the tracks to handle wagering, generated a great deal of opposition to the sport among reform elements in the state as it had elsewhere across the country. From 1910 through 1913 two of the major Salt Lake City newspapers, the Salt Lake Herald and the Deseret News, published a lengthy series of editorials describing the misery and mischief they believed were caused by horse racing. Each argued in favor of banning racing from the state. The reasons listed included the 'fixing" of races by dishonest horse owners and jockeys who "fleeced the public" rather than providing good, honest sport; the loss of spectators' money in wagering at the track, depriving honest local merchants of sales and profits; the rise in crime that generally accompanied racing meets; and the moral impact of horse race gambling on individuals and families.

The first legislative success against horse racing in Utah came on February 17, 1913, when Gov. William Spry signed an antiracing bill into law. Introduced by Charles R. Mabey, the bill had passed the legislature after a month of acrimonious debate.

The 1913 ban was eventually overturned in the 1925 session of the legislature. The challenge started on February 19, 1925, when Rep. Charles Redd from San Juan County introduced a bill in the House to reestablish horse racing in the state. In an effort to avoid the excesses of a decade earlier, Redd's bill called for the organization of a state horse racing commission, gave it the authority to regulate the sport in the state, and also legalized the pari-mutuel system of race track betting.

The proposal met favorable reception in both the House and Senate. The House passed the bill on March 7, 1925, by a vote of 41 to 4, with ten members absent. Senate action quickly followed, with the bill winning approval on March 11 by a vote of 12 to 5, with three members absent. Gov. George Dern signed the bill on March 14, 1925, and the law went into effect May 12, 1925.

Those who voted for the 1925 measure did so because they believed that horse racing had become a clean and respectable sport; that competition in the races would encourage breeders to sire faster, stronger horses; that racing would bring new sources of revenue into the state, and that the sport would give local businesses a shot in the arm. Those who opposed the measure used many of the arguments of a decade earlier. They believed race track gambling was immoral and a menace to the community. The sport was again referred to as the "most vicious form of gambling" that would bring back the undesirable riffraff that had forced elimination of the sport in 1913.

After its passage the state moved quickly to implement the new law. Redd had recommended three candidates for the racing commission: Brigham F. Grant, J. Will Knight, and John C. Lynch. The governor, however, chose a somewhat different slate, naming Brigham F, Grant — then general manager of the Deseret News and a brother of LDS church president Heber J. Grant — as chairman; Gage B. Rodman; and James H. Waters as secretary.

The new law not only created the commission and defined its powers, it also carried stipulations concerning the licensing and scheduling of meets. These conditions limited racing in any one county to two meets per calendar year, neither of which could last for more than thirty racing days from date of commencement, and outlawed all private betting and bookmaking on and off the track. In its place the statute substituted pari-mutuel or cooperative betting.

The pari-mutuel system had several advantages over bookmaking. First, the odds in a race could not be fixed ahead of time by a bookie, horse owner, or jockey. Under the pari-mutuel system the odds were based on the total money collected from wagers placed at the track. As a result, the bettors were really wagering among themselves rather than against a bookie with fixed, arbitrary odds. Under the pari-mutuel system, after a percentage had been paid to the state, to the track owners — to cover their operating expenses— and to the winner of the race, the remaining cash pool created from the wagers placed on the race was divided among those who held winning tickets. The more money bet, the larger the cash pool for the race and the more favorable the odds and the payoff from the contest.

Bets were placed by depositing money into a machine that issued the bettor a validated ticket with the description of the wager on it and which served as the claim ticket for a winning bet. The minimum wager was $2.00, but the machine dispensed tickets in larger sums for the big spenders. The machines recorded the number of tickets sold on each horse and kept a running total for the field as a whole.

The machines sold three types of tickets that allowed a bettor to back a horse to "straight" or "win," "place," or "show" (first, second, and third places, respectively). This ticket system was universally used at all tracks where the pari-mutuel system was functioning. The rules placed no limit on the number of tickets a bettor could buy. He might put money down on every horse in the race if he chose. However, payoff came only if the participant held a ticket for a horse that finished in one of the first three positions.

Support for the 1925 measure came from several quarters. Editorial opinion, unlike the comments of a decade earlier, viewed the new law quite favorably; even the Mormon-owned Deseret News assumed a moderate stance on the issue. One notable exception, however, was an editorial by Edward H. Anderson that appeared in the August 1925 issue of the LDS church's most important magazine, the Improvement Era. Anderson blasted the Redd Act as a "grave, not to say criminal, moral mistake," and recommended righting the wrong by voting out the entire legislature in the next election.

Businessmen in towns where race tracks were located strongly supported the new law. Believing that racing in Utah would become as popular as it had been fifteen years earlier, merchants actively supported efforts to bring the sport to their communities. The Ogden Chamber of Commerce, for instance, appointed a committee to work with the new State Racing Commission to obtain a permit for the city Hotel operators in Salt Lake City, optimistic about the benefits the resumption of racing would bring them, circulated petitions of support for the sport.

Indirect evidence for the popularity of horse racing can be seen in the number of applications the commission received for racing licenses from all over the state. Many applications were filed between the day the law was signed by Dern in March and the day the commission officially opened for business on May 12. Almost all of the applications were approved after the commission met with the petitioners in an informal hearing. One exception, though, was the

Although many local horses were entered in the races at the state fairgrounds and Lagoon, sponsorship of the meets at these locations fell into the hands of two out-of-state syndicates. The Utah Agricultural and Racing Association and the Utah Horse Breeding and Racing Association were incorporated in the state of Utah but were completely owned and controlled from outside the state. Although these companies had a virtual monopoly on racing at the state fairgrounds and the Lagoon track, local racing interests never filed a complaint. Ultimately, the backing of the out-of-state interests worked to Utah's advantage, since they brought in a large amount of outside capital. This additional influx of money did a great deal to improve the local economies of Salt Lake City and Davis County.

Attendance at the opening race of the season, held at the state fairgrounds on July 2, 1925 — the first run under the auspices of the Redd Act — confirmed the optimistic outlook. Seating at the fairgrounds track was filled almost to capacity, with crowd estimates running between 3,500 and 10,000. Local newspapers pronounced the event a complete success. The same articles also noted the attendance of President Heber J. Grant, other LDS church authorities. Gov. George H. Dern, and Salt Lake City Mayor C. Clarence Neslen and their parties.

Financially, the races were also extremely successful. An audit of the commission's financial records conducted by the state auditor's office in February 1927 covered the first year and a half of the commission's existence, from May 12, 1925, through the end of the calendar year 1926. The report estimated that horse racing had brought the state additional revenue totaling $129,646.05.

Because of the revenues brought in, broad community support, and large spectator turnouts, the races seemed destined to become a permanent part of Utah's sport scene. Trouble, however, was gathering on the horizon. Increasing public concern over the moral impact of the sport, eventual loss of support from the business community, and, most important, charges of corruption against the state racing commissioners eventually led to a second legislative ban in 1927.

The assault against racing began September 16, 1925, when the Utah State Fair Association and the State Racing Commission filed a suit against the Salt Lake City Commission in Third District Court in Salt Lake City. The dispute concerned passage of a city ordinance that declared pari-mutuel betting a form of gambling and therefore banned within the city limits. This had a direct impact on horse racing, since the state fairgrounds were inside the corporate limits of Salt Lake City. The district court found for the defendants, but the plaintiffs appealed to the Utah State Supreme Court. The higher court reversed the lower court's decision, ruling that horse racing was not a game of chance and that it therefore did not constitute gambling. Their decision, announced August 6, 1926, put an end to the judicial attack on horse racing in Utah.

A few months later, however, Redd himself dealt what eventually became the deathblow to the sport by announcing during his reelection campaign in late 1926 that he would seek repeal of the law during the 1927 session of the legislature. He later reaffirmed this position in a letter to D. W. Parratt, secretary of the Utah Education Association, and he also accused the State Racing Commission of failure to enforce the statute properly. Redd had been given information by George O. Relf and a few others that William P. Kyne had paid members of the commission between $25,000 and $50,000 to secure the racing concession at the state fairgrounds, that there had been an illegal telegraph wire installed at the track to send race results to the West Coast before they were officially announced, that commission officials were benefitting heavily from bookmaking, and that the commissioners had also been employed and paid by Kyne as track officials to supervise the races.

On January 13, 1927, Redd made good on his promise, introducing HB 4, a proposal to abolish both horse racing and the parimutuel system of gambling. The bill was referred to the House Livestock Committee, which Redd once again chaired, for hearings and recommendation.

During three days of public hearings, from January 19 through January 21, the hearing room was jammed with spectators, and a wide variety of testimony was presented. On the first day of hearings, W. H. Folland, Salt Lake City attorney, claimed that crime in Salt Lake City had increased substantially since passage of the Redd Act and stressed the increased law enforcement burden that had resulted.

Others who appeared in favor of total repeal included D. W. Parratt, secretary of the UEA, and the Reverend William T, Scott, representing the Salt Lake Ministerial Association. Both argued the horrible moral costs they believed racing had on society, particularly on children.

Businessmen who appeared before the Redd committee were almost evenly divided on the issue. Some, such as W. T. Denn, a local jeweler, and H. R. Vowles of the Paris Department Store, were unalterably opposed to racing because it both hurt business and destroyed families. Others, such as Fred Baliff, a local manufacturer, and O. D. Coughlin of Walker Brothers Dry Goods Company, on the other hand, favored the continuation of racing but suggested limiting the meets to fewer days. Still others, such as Wayne Decker of the Decker Jewelry Company, were very much in favor of continuing the sport as it was, believing it would eventually add millions of dollars to the wealth of the state. The most vigorous defenders of the sport were two members of the State Fair Board, H. L. Mulliner and E. S. Holmes, who pointed to the increased revenues brought into the state.

Editorial support for the sport also deteriorated. The Deseret News, for example, retreating from its more supportive 1925 stand, published a number of editorials demanding repeal of the law by the legislature. These articles cited moral and economic arguments for banning the sport.

Redd's repeal proposal was finally reported out of committee on January 24 but not with unanimous backing. Three members of the committee — Redd, N, F. BuUen, and J. G. Pace — filed a majority report favoring the bill, while two members — H. H. Crouch and W. A. Crane — filed a minority report opposing repeal.' The minority report was finally adopted after a great deal of debate, and HB 4 was then placed on the calendar for final consideration.

Redd's racing bill was not the only proposal under consideration; however, his was the only measure to advocate total repeal. Four other proposals made in the House would have amended the racing law, but each would have allowed racing to remain, correcting only what were seen to be some of the more objectionable practices.'

The closest contender to Redd's repeal bill was introduced by William J. Holther on January 17, 1927. His measure would have limited racing in the state to one twenty-five day meet each year to be held in conjunction with the Utah State Fair. The proposal was sent to the Committee on Corporations for consideration.

The Holther measure came out of committee on January 22, but, like Redd's bill, without unanimous support. Four of the committee members signed a majority report favoring the bill but recommending amendments. Two members of the committee filed a minority report opposing the bill, and one member, Mrs. H. S. Tanner of Salt Lake City, refused to sign either report. In the heated debate and political maneuvering that followed on the House floor, both reports were killed, and the bill went to the calendar without recommendation.

Holther's bill came up for final consideration on January 25, 1927. After another stormy debate and fierce maneuvering, the proposal to amend the Redd Act lost by one vote. However, proponents of the bill managed to muster the necessary twenty-eight votes to get the bill up for reconsideration again the next day. In the maneuvering that followed, both the Holther and Redd biUs were referred back to the Livestock Committee for further consideration in the hope that some sort of a compromise could be worked out.

Both proposals came out of committee again on February 2, but this time with no recommendation for either one. Final consideration for the Holther measure came on February 8 after another heated debate. During arguments over the bill both Redd and Elias S. Woodruff, a representative from Salt Lake City, made further charges against both the State Racing Commission and the State Fair Board, accusing various members of accepting bribes and racketeering. The Holther bill went down to final defeat by a vote of 24 in favor, 28 opposed.

On February 10 the Redd bill repealing horse racing finally came up for final consideration. After another lengthy debate and further maneuvering, the measure at long last passed the House by a vote of 34 yeas, 20 nays, and 1 absent.

Action in the Senate was quick in coming. The bill was introduced into the Senate the same day it was passed in the House, referred to the Committee on Revenue and Taxation, and reported out of committee favorably within an hour. Final action came on February 17, when the repeal bill was passed by a vote of 16 yeas to 2 nays, with 1 absent. Governor Dern signed the act into law on February 24, 1927.

Although the law had now been repealed, the issue was not yet settled: there remained the charges Redd had made against the State Racing Commission and members of the State Fair Board. Beginning on February 12 Governor Dern, James H. Waters, Brigham F. Grant, William P. Kyne, and the executive committee of the Utah State Fair Association all began demanding a full, open, and honest investigation into the allegations made by Redd and others in the press and on the floor of the House.

On February 14 the House acceded and the Speaker appointed a five-man committee to head the probe. Hearings began in the evening of February 24 at the Chamber of Commerce building in Salt Lake City. Among the first three witnesses called were Charles Redd, George O. Relf, and Brigham F. Grant. It soon became apparent that Redd had acted on nothing better than second-hand information given to him by Relf; he had no personal knowledge of wrongdoing on the part of any of the commissioners or of any member of the State Fair Board. The only testimony offered by Relf was a belief that he had been double-crossed by the Racing Commission in applying for a racing permit at the state fairgrounds; he had no first-hand information to support any of his allegations.

On March 10 the committee made a formal preliminary report to the House. It concluded that although members of the Racing Commission were indeed in the employ of the Kyne syndicate as track officials in addition to their employment by the state — unethical, but not necessarily illegal — there was no evidence to substantiate any of the allegations Redd had made concerning bookmaking and bribery. However, the committee had not yet had the opportunity to question Kyne, who was too ill to travel from California to Utah to testify, and James H. Waters, who was hospitalized and under strict doctor's orders not to be disturbed. Since they did not wish to issue a final report until they had interviewed these two key witnesses, the House voted to continue the probe and allow Waters and Kyne to testify.

The opportunity to obtain Waters's testimony never came. He died shortly after the preliminary report was issued, and the investigating committee felt it appropriate to close the books on the entire matter. The bribery and bookmaking charges had been disproved, but the ethical question of the commissioners' employment at the track was never fully resolved. With the repeal on the books and the hearings concluded after Waters's death, the matter was permanently dropped.

The horse racing issue reveals some interesting aspects of the relationship between the LDS church and Utah state government during this period. First, church leaders did not attempt to lobby actively for passage of either the Mabey bill in 1913 or Redd's repeal bill in 1927, although the Salt Lake Tribune and the Salt Lake Herald- Republican both accused the church of such efforts. In fact, both Mormon and non-Mormon legislators vigorously denied that the church had ever contacted them on any matter related to the horse racing issue and bitterly resented charges made by the press of collusion with church authorities. The only apparent efforts the LDS church made to secure abolition of the sport were the editorials that ran in the Deseret News.

This issue also illustrates varying attitudes within the LDS church generally and a lack of an organized, monolithic crusade against the sport. At no time during the heated debates on abolition in 1913 or 1927 did the First Presidency take the opportunity to issue an official statement that would have spelled out the church's stand and requested compliance from faithful Mormons living in Utah, nor was this issue discussed at any general conference of the church held in either period. Instead, we find Brigham F. Grant, a brother of President Heber J. Grant and general manager of the church's major organ, the Deseret News, serving as the first chairman of the State Racing Commission, and President Grant attending the opening meet of 1925 with Governor Dern and other notables.

Remarks made by LDS members of the state legislature in 1927 further accentuate these attitudes. In explaining their vote for or against Redd's repeal bill, a number of representatives stated that although they were members of the Mormon church, which had adopted antigambling attitudes years earlier, they felt their greatest responsibility was to the people of Utah as a whole, not just one segment of it. Religious considerations took second place. In their collective opinion the supposed corruption of the horse racing commission, the loss of support from the business community, and what were seen as the detrimental effects of pari-mutuel betting on the morals of the community more than justified the abolition of the sport.