There’s More Than One Way to Race

Editor’s note: This article appears in the latest magazine edition of Talk Business & Politics, which you can access online here. A video interview with Rex Nelson, author of this feature story, appears at the bottom of this post.

Eric Jackson, the longtime general manager of Oaklawn Park at Hot Springs, vividly remembers that trip across the Chesapeake Bay more than 17 years ago.

It was February 1998, and it was cold. Jackson and Bobby Geiger, Oaklawn’s director of gaming and wagering, had taken a flight to Baltimore and then gotten on a small boat that was headed to an island in the bay.

“It was dark, it was sleeting and Bobby and I just had on our suits,” Jackson says as he sits in his Oaklawn office on a Monday afternoon. “We were freezing. We also knew we had a lot of work ahead of us.”

They were bound for Parsons Island, which once was described by the Baltimore Sun as a “bucolic, privately owned island covered in corn and sunflowers and with scattered wildlife.” The 100-acre retreat belonged at the time to Jim Corckran, who along with his brother owned an east Baltimore manufacturer of nails, rivets, nuts, bolts and other fasteners that had been founded in 1865. Corckran had purchased the island from McCormick & Co., the well-known spice manufacturer that had begun doing business in 1889 at Baltimore.

Jackson and Geiger weren’t headed to the island to talk about nuts, bolts or spice. They were there to talk thoroughbred racing and ways to preserve the sport in the face of increased casino competition. Two years earlier, brothers John and Jim Corckran had teamed up with Ted Mudge, the owner of a Baltimore-based insurance brokerage who was active in the thoroughbred racing industry, to purchase AmTote International, Inc. Founded in 1932 as the American Totalisator Co., the firm specialized in the equipment used to control pari-mutuel betting at horse racing and greyhound racing facilities. American Totalisator installed its first mechanical tote system at Chicago’s Arlington Park in 1933.

INSTANT RACING
Besieged by the proliferation of casinos in Mississippi and Louisiana, Oaklawn’s Jackson had come up with the concept of Instant Racing, an electronic gambling system that allows players to bet on replays of past races. Instant Racing terminals resemble slot machines.

“The 1980s had been great for Oaklawn,” Jackson says. “At the time, we didn’t fully appreciate just how great they were. In the late 1980s and early 1990s, we began to face competition from new tracks in Oklahoma and Texas [Remington Park opened at Oklahoma City in 1988 and Sam Houston Race Park opened at Houston in 1994]. “We responded by instituting simulcasting, becoming the first track to offer full cards from other tracks. But while we were looking west toward Texas and Oklahoma, the casinos were being built to the east in Mississippi and to the south in Louisiana.”

A ballot initiative that would have allowed some casinos in Arkansas – including one at Oaklawn – was tossed off the ballot just before the November 1994 election. Oaklawn made another run at it in 1996.

“We got sucker punched about a month before the 1996 election,” Jackson says. “We had gone into it with the idea that the companies operating casinos in Mississippi would not oppose us since two casinos would be allowed at Hot Springs in addition to what happened here at Oaklawn. Then they came after us. The ads were brutal, and we got our teeth kicked in. Simulcasting had been Plan A. The casino initiative had been Plan B. Frankly, we didn’t have a Plan C.”

Proposed Amendment 4 in 1996 would have established a state lottery, permitted charitable bingo games and raffles by nonprofit organizations and allowed Hot Springs voters to decide whether to authorize casino gambling at Oaklawn and two other sites in the city. The initiative failed 61 percent to 39 percent.

‘THERE HAD TO BE A WAY’
It was then that Jackson began to play around with the idea of Instant Racing.

“I thought that there had to be a way to take past races and put them in a format that people would still enjoy,” Jackson says. “Our advertising agency came up with artwork of what the terminals might look like, and we invited representatives of three companies to come and hear what we had to say. Two of them thought it was a dumb idea. The third person was Ted Mudge of Amtote. He wanted to give it some additional thought.”

That was in 1997. Mudge’s interest set the stage for the February 1998 trip to Parsons Island.

“It was like a think tank out on that island,” Jackson says. “There were all kinds of people there. We worked for about 36 straight hours. It became known at the Parsons Island Project. You can still find old files around here labeled P.I.P., which stands for Parsons Island Project.”

During the 1999 legislative session, the Arkansas Legislature removed the requirement that simulcast races be shown live, opening the door for Instant Racing. The first test terminals were placed on the floor at Oaklawn and at Southland Greyhound Park in West Memphis in January 2000. There were 50 machines at each track. By 2002, the concept was taking off in Arkansas.

“For the longest, Instant Racing was just here in Arkansas,” Jackson says. “We then started to get into other states. Louis Cella has been what I call our Fuller Brush salesman. He has gone all over the country talking about Instant Racing. He’s the reason it’s in other states.”

ALL IN THE FAMILY
Louis Cella is the son of Charles Cella, who has been at the track’s helm since 1968. Charles Cella’s grandfather and great uncle, Charles and Louis Cella, were among the founders of Oaklawn and were investors in racing ventures across the country in the early 20th century. Charles Cella’s father, John Cella, led Oaklawn into the modern era and was the track’s president for many years until his unexpected death in 1968.

The fourth generation of the Cella family operating Oaklawn – Louis A. and John G. Cella – both serve on the board. Louis is a 1987 graduate of Washington and Lee University in Virginia and received his law degree from the University of Arkansas in 1990. John is a 1985 graduate of Vanderbilt University in Tennessee and is a thoroughbred owner. Both men inherited their father’s passion for the Hot Springs track. And both have confidence in Jackson, a Hot Springs native who grew up playing golf on the three-par course that once was on the Oaklawn infield. Jackson graduated from Hendrix College at Conway with degrees in business and economics and has been with Oaklawn since 1978. He was the director of operations from 1978 until he was promoted to general manager in 1987.

Jackson became the general manager following the death of the legendary W.T. “Bish” Bishop, who had taken over in July 1972 from the equally legendary J. Sweeney Grant following Grant’s death. Grant had been the general manager since 1954. In other words, Oaklawn has had just three general managers in the past 60 years.

‘GAMES OF SKILL’
Oaklawn celebrated its centennial year in 2004. A year later, Oaklawn Park and the Cella family were awarded the Eclipse Award of Merit, the most prestigious award in racing. But no longer was Instant Racing enough to keep up with casinos in Mississippi, Louisiana and Oklahoma. The track needed additional relief from the Legislature and got it when the Legislature passed an act in 2005 permitting Oaklawn and Southland to install “games of skill” such as electronic blackjack and electronic poker if approved by the city or county. Gov. Mike Huckabee allowed the bill to become law without his signature.

More than 60 percent of West Memphis voters approved the games at Southland. In late 2006, work began on a $40 million expansion that included a new main entrance to the dog track, a 55,000-square-foot gaming room, a 400-seat special events center, a 150-seat nightclub, a 280-seat buffet and additional restaurants. Last year, a $37.4 million expansion was announced, including dozens of new gaming machines and the addition of Sammy Hagar’s Red Rocker Bar & Grill.

In Hot Springs, meanwhile, a public referendum to allow expanded electronic games at Oaklawn passed by just 89 votes in November 2005. Litigation ensued. In September 2007, the Arkansas Supreme Court upheld the law authorizing Oaklawn to add expanded games of skill. On the day after the Arkansas Derby in April 2008, Oaklawn began construction on a 60,000-square-foot, two-level structure to house the electronic games.

Things have taken off from there:

• In August 2012, Oaklawn announced that there would be a record $20 million in purses for the 2013 race meeting. The purses, in turn, attracted a higher quality of horses. When Rebel Stakes runner-up Oxbow won the Preakness Stakes at Baltimore in May 2013, he became the 10th Triple Crown race winner to have come from Oaklawn in 10 years.
• In June 2013, Oaklawn announced plans for an expansion to its gaming area that would increase capacity by another 50 percent. The work began in early August of that year and ended just prior to the start of the 2014 race meet.
• Construction on the additional $20 million expansion resumed the day after the Arkansas Derby last April.
• In November, the new gaming area and Silks Bar & Grill opened. By the start of this January’s race meet, a high-limits area and a poker room had also opened.

“We’re going to have purses of $23 million this year,” Jackson says. “We’ve picked ourselves up off the mat. This is just as much fun as it was in the 1980s, but this time we appreciate it more. We realize that we looked into the abyss and survived. When things were at their worst in the 1990s, Charles Cella insisted that we keep the racing quality up until we could find a lifeline. He was, in essence, underwriting the purses. These days most tracks are owned by gaming companies. We consider ourselves a racetrack that happens to have gaming. We’re the only one who truly uses the gaming proceeds to vastly improve the quality of racing. Gaming now pays the light bill here, but racing is our passion. It’s in our DNA.”

MULTIPLE EXPANSIONS
David Longinotti, Oaklawn’s director of racing, is a Hot Springs native like Jackson. He began covering Oaklawn when he wrote sports for The Sentinel-Record. He later helped open Remington Park in Oklahoma City before becoming director of media relations at sister track Thistledown in Cleveland in 1991. Longinotti returned to Remington as director of communications in 1994. He later spent more than a decade handling the Oaklawn account for Little Rock advertising agency CJRW and then joined the Oaklawn staff in 2006.

“This is David’s Christmas,” Jackson likes to say of the racing season, which runs from early January until the middle of April.

Oaklawn is now among the top five tracks in the country in average daily purse distribution. Race fields were full early in this year’s meet, and there was a lack of stall space. Jackson laughs when asked about the multiple facility expansions that have occurred in recent years.

“That’s a clear indication of the poor job that management did with projections,” he says. “It would have been much cheaper if we had done it all at once.”

In 2014, Oaklawn and Southland saw combined electronic games of skill wagers of almost $3.53 billion. Oaklawn pulled in $1,359,074,501 and Southland had $2,172,451,426 in gaming wagers. The totals are expected to be even higher this year.

Oaklawn had to postpone the first weekend of racing in early January due to extremely cold weather, but Jackson was philosophical. He says at such times, “There’s nothing you can do about it. It’s an outdoor sport.”

In the weeks that followed, the track was blessed with warmer-than-expected weather. The Hot Springs track continues to gain momentum at a time when a number of other tracks across the country are suffering. The Fair Grounds at New Orleans has cut purses consistently in recent years. Oaklawn, meanwhile, has been increasing its purses for more than a decade.

‘SOMETHING SPECIAL’
In an interview last year with The Times-Picayune of New Orleans, thoroughbred owner Maggi Moss of Des Moines, Iowa, said of the Fair Grounds: “Nobody cares, so why would I take the time to care? When I go to Oaklawn, I know people care. You get treated great.”

“I don’t think anyone ever expected to see our purses double in just 10 years thanks to Instant Racing, gaming and good racing,” Longinotti says.

Off-track handle picked up last year when Oaklawn’s races returned to the racing channel TVG after only being shown on competing channel HRTV in 2013. The track also has benefited from a product known as “OaklawnAnywhere,” an advance deposit wagering site that allows Arkansas residents to bet using the Internet.

At age 79, famed trainer D. Wayne Lukas is among those who spend winters at Hot Springs. The Wisconsin native has won more Triple Crown races than any other trainer with 14 (he has captured the Kentucky Derby four times, the Preakness Stakes six times and the Belmont Stakes four times). Lukas already had become a legend in the quarter-horse industry when he made the switch to thoroughbreds in 1978.

He says: “Arkansas has something special going on here. Something happens here that’s now missing at a lot of other tracks. You have real fans here.”

‘GENUINE ENTHUSIASM’
Lukas believes Oaklawn could serve as an example for tracks across the country. That’s because it’s still a place for family outings, a spot where the food and the chance to visit with friends is as much a part of the experience as the betting. He calls Hot Springs “a national treasure,” a resort town where a day at the races is a social event worth getting dressed up for. He says about the only racing towns that can compare these days are Saratoga Springs, N.Y., and Lexington, Ky.

“Racing got soft all over the country,” Lukas says. “We became too confident that people would keep coming to the track. Going to the races is still a part of the culture of this state. There’s a genuine enthusiasm for the game that’s hard to find elsewhere. Look at the average daily attendance at Oaklawn. It’s higher than most of the other tracks.”

Lukas says that he likes the fact that he can walk into a Waffle House for breakfast and have people come over to talk racing. That doesn’t happen in New York, Los Angeles or Miami. Across the American landscape, thoroughbred tracks have become sad, empty places, mere adjuncts to adjoining slot facilities. Oaklawn, though it also now has an extensive gaming center, has been able to remain a bit different. The racing still matters.

In a book titled “Crown Jewels of Thoroughbred Racing,” Hot Springs native Randy Moss wrote: “No palm trees line the entrance to this racetrack, and its paddock isn’t one of those botanical gardens that make horseplayers want to fold up their Daily Racing Form and splash on suntan lotion. It doesn’t have a Phipps or a Hancock on its board of directors. Thomas Jefferson never raced there and overalls outnumber neckties by three-to-one in the grandstand. But ask well-traveled horse lovers to recite their favorite racetracks and chances are good that Oaklawn Park will pop up in the conversation. For a little country track in Hot Springs, Ark., on a two-lane road between nowhere and no place, Oaklawn has made quite an impact on the racing world.

“During the track’s rapid rise to prominence in the late 1970s and early 1980s, racing executives from throughout the country and even reporters from Sports Illustrated and The New York Times were dispatched here in hopes of determining what made this unlikely racetrack so special. They usually returned home with a hangover and a stretched-to-the-limit credit card, reporting that they couldn’t figure out the secret formula but sure enjoyed the heck out of the search. But without even knowing it, they knew it. The key to Oaklawn has always been simple. The track is one big party.”

Moss, who now works for NBC Sports, related the story of Cuban-born trainer Laz Barrera, who remarked after a race in Hot Springs that he had never been to Oklahoma. Told that he still hadn’t been to Oklahoma, Barrera replied: “Well, wherever we are, it’s a long way from California.”

NEW CHAPTER
With the glory days of the 1980s and the early 1990s over, Randy Moss wrote in 1997: “Although great horses still are flown in for the Racing Festival of the South stakes, the crowds and enthusiasm have dimmed somewhat in recent years. The Clydesdales have been replaced by a tractor, the infield critters and wagon rides are gone, riverboat casinos in Mississippi and Louisiana have taken away many of the celebrants and some fans now stay home for the convenience of watching the track’s races on simulcast screens in Shreveport, Dallas-Fort Worth, Oklahoma City and West Memphis.”

Little did Moss know in 1997 that a new chapter was about to be written at Oaklawn.

The old lady of Central Avenue has received a remarkably successful facelift since those words were written. Along came Instant Racing. Along came the other so-called games of skill. Up went the purses. Horses went on from Oaklawn to win Triple Crown races. And the national media noticed.

For Oaklawn Park at Hot Springs, maybe these are the good ol’ days.