The rapid increase of “off course” wagering through american bookmakers has kept pace with, if not exceeding, the growth of its legalized parent. In colonial America, men of means raced their horses against those of their neighbors, usually for sums contributed by themselves in the nature of a side bet. The partisans of each owner likewise bet among themselves.
As the practice grew, the stakeholder became more in evidence. For a commission, usually 5 per cent, the stakeholder held the bets and duly made payment after the event was run. With the organization ofthe first race track, it became impractical to handle wagers in this way, and a small group of men set themselves up as a sort ofglorified Stakeholders Association, taking bets from all who cared to back their opinions. They found no dearth of willing customers. The odds against each entrant’s chances were adjusted in proportion to the amounts bet, so as to leave the stakeholders a profit regardless of the outcome in most cases. With the gradual increase of race meetings, and the programming of events for a number of contestants, the business of accepting wagers became more complicated, and the Bookmaker’s Percentage Table came into wide use.
American bookmakers became prominent in the 1960’s when the Saratoga Race Track was opened in New York State. This signaled the advent of what is now known as Big Time Racing. By there 1875 were four major meetings held each year, withtracks operating in New York State, Maryland, Kentucky, and Louisiana. The bookmakers handled all the betting, though there were sporadic attempts made to introduce the pool betting pari-mutuel machines. The public evidently preferred the “books” at that time. As racingbegan to flourish, however, the bookmakers became dissatisfied with their 5 to 8 per cent profit, and began to shorten their odds so as to increase their percentages to 10, 15 and in some cases 20 per cent. In addition, they became horse owners themselves, racing their charges under other names instigated jockeyrings, bribed trainers, and in short practically dominated the sport.
As these abuses grew, concerted efforts by the opponents of racing finally forced legislative action, and in 1906 racing was at its lowest ebb, outlawed in all states except Maryland, Kentucky, and New York. In 1910 New York also banned racing by the passage of a statute making betting at a track illegal. In 1913 New York tracks reopened with a strange spectacle of betless betting, known as oral betting. This scheme permitted the bookmakers to accept the bet as long as no money was in evidence. A notation of the wager was jotted down on a slip of paper and settlements made the following day. The “books” did an enormous business under this plan until finally, in 1936, the state legalized the track bookmaker. At that time New York State was the principal remaining stronghold of the “books,” the other states that permitted racing having legalized the mutuel machines and outlawed american bookmakers. In 1940 New York State followed suit and the heydey of the track “books” was over.Meanwhile, betting away from the tracks was mushrooming with ever increasing vigor.