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Churchill Downs/Kentucky Derby History, Part II
Shortly after the solidification of Churchill Downs, the Kentucky Derby and horse racing itself experienced a difficult fifty years.
Derby Growing Pains
The following paragraph sheds light on the gambling travails that plagued the Derby in the late 1800s and on into the next century:

"Throughout the 20 years [Meriwether Lewis] Clark ruled the Downs, his philosphy about gambling was based on Rous' rules. Clark imported French pari-mutuel machines ("pari" is French for bet; "mutuel" means a benefit association established for the common good) and had them on track by Derby Day 1875 (see Part I). There was some question as to their legality--machine gambling had long been outlawed in the state--so they did not reappear until 1878, after the Kentucky Legislature approved their use. Through 1881, pari-mutuel machines and auction pools were the only two ways to wager. Then Clark bowed to public pressure and struck a deal with bookmakers in 1882 as a means of attracting entrants and patrons. So important was wagering that when torrential rains threatened Derby attendance on May 22, 1883, Clark rescheduled the race for the following day. On the eve of the 1886 Derby, Clark and the bookmakers had a falling out over contract terms. Clark banned them from the track before the race, thereby alienating big New York stables whose owners were heavy bettors. When Yankee horse-owners threatened to boycott Louisville racing altogether the following spring, Clark had no choice but to let out-of-town bookmakers return for the 1887 Derby...Once big-time gamblers got a stranglehold on racing, things went from bad to worse. The increasingly intemperate Clark couldn't stem the tide in Louisville as end-of-century gambling fever spread like wildfire and engulfed urban tracks...On August 7, 1894, Clark paid all the Club's bills and turned the operation over to a group of local bookmakers, headed by a William F. Schulte and incorporated as the New Louisville Jockey Club. Within the month the new owners began widening and regrading the track."
But these cosmetic changes were not enough to improve the state of affairs. After the Derby distance was shortened by a quarter-mile in 1896, nominations tripled, but very few horses showed up for the race. From 1895 to 1904 there were only 53 Derby contestants, an average of less than six per year. Spring meets went steadily downhill until hitting rock-bottom in 1902. Frustrated bookmakers and a tired city seemed unenthused about the Derby and racing in Louisville. Furthermore, anti-gambling sentiments were being stirred by a Protestant church coalition, though a relatively peacful resolution was reached due to the guidance of Matt Winn (Part III). Still the track struggled for respectability: at the 1906 Fall Meet two bookmakers exchanged blows in the betting shed amid rumors of race fixing. The offender, who shot his opponent's cashier, was promptly taken before a local magistrate, who "happened to be on the grounds" and the bookie's $500 bond was quickly guaranteed by friends. "Such had become the Sport of Kings." To make matters worse, the 1897 Depression took a tremendous toll on New York thoroughbred racing. Stables all over the country went bankrupt, and for up to ten years American thoroughbreds were being auctioned away in England.
New York racing continued to struggle, despite the efforts of August Belmont. A claim of corruption in racing by future Chief Justice of the United State Supreme Court Charles Evans Hughes brough out anti-gambling advocates by the droves, decreasing admissions. Belmont Park increased admission to $3, then to $5, with Belmont aiming to "keep away from Jockey Club supervised courses such persons as are unable to patronize so costly a sport." Everyone stayed out in 1908, however, when anti-gambling legislation closed New York tracks, which caused a panic on Southern breeders who watched their biggest market shut down. By the end of the first decade of the new century things began to finally turn around. Matt Winn, who figures so prominently in the second rise of Churchill Downs, reintroduced pari-mutual wagering at the 1908 Derby. Later that year, the New York Court of Appeals decided oral betting between individuals did not constitute bookmaking. New York tracks cautiously reopened in 1909, with only admission fees to pay their expenses. By 1910 there were five pari-mutuel machines in place for Lexington's Kentucky Association Spring Meet and $2 and $5 ticket sales were brisk; Eugene Elrod, then the Downs' betting ring supervisor, had gone to Lexington to set the machines up. For the 1910 Derby the infield was free (that will cost you $25 today) and pari-mutuel business was much improved. But there was still trouble in New York. On May 26, the Agnew-Perkins Bill, making directors of racing associations criminally liable for any betting, oral, written or by machines, taking place on their tracks. The New York Jockey Club agreed to shut down racing after August 31, 1910 under risk of prosecution. In September, they began shipping their thoroughbreds to South America, France and England.
But foreign countries were not exactly responsive and excited: "Argentina responded within the month, barring horses not bred in Argentina from virtually all competition. England followed suit in a more democratic fashion. An early December Thoroughbred Record reported that a 'petition to the [English] Jockey Club stewards has been prepared, the object being to restrict the importation (for sale) of American yearlings and older racing stock.' In 1913, Lord Jersey chaired an English Jockey Club committee which directed Weatherbys (see Chapter 1) to list only such thoroughbreds in its General Stud Book as could 'trace without flaw on both sire's and dam's side to horses and mares themselves already accepted in the earlier volumes of this book.' The 'Jersey Act' was not amended until 1949, when American thoroughbreds looked pretty good to war-ravaged England. By late 1911 it was more profitable to ship mares--numbers of which died en route from trauma--to Australia than to auction them in Lexington. The Jockey Club's assistant secretary, Algernon Daingerfield, summed up the crises this way: "It's not the money or the sentiment, it's about the danger to the future of the character of the American horse." The Jockey Club that once registered 4,700 foals was now registering less than a thousand. Many of New York's elite horsemen, including August Belmont, started to ship their stables, establish farms and raced thoroughbreds overseas in France; when France exlcuded imported thoroughbreds from flat races the horses became steeplechasers. Soon after, American horses were being shipped to Russia and Austria as well. In its darkest hour, American racing was virtually abandoned by those most able to afford the struggle to keep it on track. The sport and the industry needed a leader the like of which it had never had before. The rest of the story was about to unfold.
Cocktails with the Sport of Kings | The Arrival of Thoroughbreds | Into the Colonies and America
Foundations: Bluegrass and Lexington | The Move to Louisville
Churchill's Colonel | Derby Growing Pains | The Legacy of Matt Winn | The Home Stretch: Into Modern Times
A History of Horse Racing
Cocktails with the Sport of Kings
The Arrival of Thoroughbreds
Into the Colonies and America

Horse Racing in Kentucky
Foundations: Bluegrass and Lexington
The Move to Louisville

A History of Churchill Downs
Churchill's Colonel
Derby Growing Pains
The Legacy of Matt Winn
Into Modern Times