Horse Racing Betting History

American Thoroughbred Racing

The British settlers brought horses and horse racing with them to the New World, with the first racetrack laid out on Long Island as early as 1665. Although the sport became a popular local pastime, the development of organized racing did not arrive until after the Civil War. (The American Stud Book was begun in 1868.) For the next several decades, with the rapid rise of an industrial economy, gambling on racehorses, and therefore horse racing itself, grew explosively; by 1890, 314 tracks were operating across the country.

The rapid growth of the sport without any central governing authority led to the domination of many tracks by criminal elements. In 1894 the nation’s most prominent track and stable owners met in New York to form an American Jockey Club, modeled on the English, which soon ruled racing with an iron hand and eliminated much of the corruption.

In the early 1900s, however, racing in the United States was almost wiped out by antigambling sentiment that led almost all states to ban bookmaking. By 1908 the number of tracks had plummeted to just 25. That same year, however, the introduction of pari-mutuel betting for the Kentucky Derby signaled a turnaround for the sport. More tracks opened as many state legislatures agreed to legalize pari-mutuel betting in exchange for a share of the money wagered. At the end of World War I, prosperity and great horses like Man o’ War brought spectators flocking to racetracks. The sport prospered until World War II, declined in popularity during the 1950s and 1960s, then enjoyed a resurgence in the 1970s triggered by the immense popularity of great horses such as Secretariat, Seattle Slew, and Affirmed, each winners of the American Triple Crown–the KENTUCKY DERBY, the Preakness, and the Belmont Stakes. During the late 1980s, another significant decline occurred, however.

Thoroughbred tracks exist in about half the states. Public interest in the sport focuses primarily on major Thoroughbred races such as the American Triple Crown and the Breeder’s Cup races (begun in 1984), which offer purses of up to about $1,000,000. State racing commissions have sole authority to license participants and grant racing dates, while sharing the appointment of racing officials and the supervision of racing rules with the Jockey Club. The Jockey Club retains authority over the breeding of Thoroughbreds.
Breeding

Although science has been unable to come up with any breeding system that guarantees the birth of a champion, breeders over the centuries have produced an increasingly higher percentage of Thoroughbreds who are successful on the racetrack by following two basic principles. The first is that Thoroughbreds with superior racing ability are more likely to produce offspring with superior racing ability. The second is that horses with certain pedigrees are more likely to pass along their racing ability to their offspring.

Male Thoroughbreds (stallions) have the highest breeding value because they can mate with about 40 mares a year. The worth of champions, especially winners of Triple Crown races, is so high that groups of investors called breeding syndicates may be formed. Each of the approximately 40 shares of the syndicate entitles its owner to breed one mare to the stallion each year. One share, for a great horse, may cost several million dollars. A share’s owner may resell that share at any time.

Farms that produce foals for sale at auction are called commercial breeders. The most successful are E. J. Taylor, Spendthrift Farms, Claiborne Farms, Gainsworthy Farm, and Bluegrass Farm, all in Kentucky. Farms that produce foals to race themselves are called home breeders, and these include such famous stables as Calumet Farms, Elmendorf Farm, and Green-tree Stable in Kentucky and Harbor View Farm in Florida.
Betting

Wagering on the outcome of horse races has been an integral part of the appeal of the sport since prehistory and today is the sole reason horse racing has survived as a major professional sport.

All betting at American tracks today is done under the pari-mutuel wagering system, which a Frenchman named Pierre Oller developed in the late 19th century. Under this system, a fixed percentage (14 percent-25 percent) of the total amount wagered is taken out for track operating expenses, racing purses, and state and local taxes. The remaining sum is divided by the number of individual wagers to determine the payoff, or return on each bet. The projected payoff, or “odds,” are continuously calculated by the track’s computers and posted on the track odds board during the betting period before each race. Odds of “2-1,” for example, mean that the bettor will receive $2 profit for every $1 wagered if his or her horse wins.

At all tracks, bettors may wager on a horse to win (finish first), place (finish first or second), or show (finish first, second, or third). Other popular wagers are the daily double (picking the winners of two consecutive races), exactas (picking the first and second horses in order), quinellas (picking the first and second horses in either order), and the pick six (picking the winners of six consecutive races).