Before the 20th century, horse racing was a key part of American culture, dating back to the colonial era. The first U.S. racetrack opened in 1665 in Long Island, New York, and racing quickly became popular among the colonial elite. By the 19th century, races like the Kentucky Derby (first held in 1875) had become iconic. The sport was not only a form of entertainment but also a significant social activity, attracting both the wealthy and the working class. Betting on these races became common, with wagers placed on horses to win, place, or show, leading to the development of a thriving gambling culture that was tightly interwoven with the sport itself. Horse racing helped fuel the American fascination with competition, breeding, and the emerging horse industry, contributing to the nation's growing interest in sports as both a spectacle and a form of leisure. As you go through this activity, notice how horse racing affects and is affected by American cultural and political movements.

At the start of the 20th century, bookmakers and pool wagering at the track were prominent. Individuals could place various types of bets on specific horses, including win, place, or show bets (first-, second-, and third-place finish, respectively). 

Pictured: Women betting on horse racing via messenger boys (credit: New York State Archives) 

A second form of gambling that was popular at the start of the 20th century was off-track betting. Off-track betting expanded the accessibility of horse racing beyond those who could not attend racetracks in person. It involved gambling establishments like bookmakers, gambling houses, casinos, and saloons, where bettors could wager on horse races without needing to physically attend the event. In these settings, bookmakers would take bets on racing, often acting as intermediaries between the bettor and the racetrack.

Pictured: Horse racing auction pools (credit: New York State Archives)

A series of religious reformer groups, like the Anti-Saloon League and Woman’s Christian Temperance Union, gained traction and influence in the early 1900s, advocating for a national ban on alcohol and gambling as part of their broader mission to promote moral and social reform. These organizations believed that both alcohol and gambling were detrimental to individuals, families, and society, contributing to poverty, crime, and the breakdown of moral values. 

Pictured: Twenty-second Annual Convention of the Woman’s Christian Temperance Union of the State of New York. Rochester, New York, 1895. General Collections, Library of Congress

In 1908, horse racing faced widespread prohibition across the United States, primarily because of its association with gambling, which was increasingly seen as a moral threat. By 1908, the number of active racetracks had plummeted from over 300 at the beginning of the century to just 25, reflecting the growing influence of both religious and political movements determined to curb gambling and promote social order. Despite the bans, horse racing did not disappear entirely. The cartoon shown to the right depicts a man looking at the closed gates of St. Asaph’s Racetrack (a Virginia racetrack that permanently closed in 1905). The padlock on the gates says “THE LAW” and the quote along the bottom of the cartoon says, “Closed. Eh! Well, I Believe I’ll Take The Money Home to My Family.” 

Pictured: A comic strip, "Chronicling America" from the Washington Times (January 13, 1905, p.1) (Credit:  Library of Congress)

When bookmaking was outlawed in Kentucky in 1908, the existence of the Kentucky Derby and Churchill Downs were threatened as they faced difficulties in generating enough purse money for their races. Three decades prior, Matt Winn, the president of Churchill Downs from 1902 to 1949, had experimented with pari-mutuel betting, which meant that bettors placed their own bets, and no bookmakers were required. Remembering this experiment, Winn found that an obscure statute exempted pari-mutuel betting from Kentucky's anti-gambling laws. Now tasked with finding machines to execute this type of wagering, his cross-country search began. Six machines were found, allowing the 1908 Kentucky Derby to continue as planned. 

Pictured: Picture college after Whirlaway’s Kentucky Derby win in 1941. Matt Winn is the man to the far right in the middle image (Credit: Keeneland Library Cook Collection)

By 1909, California, responding to growing concerns over the negative impacts of gambling, became one of the first states to implement a statewide ban on all forms of gambling, including horse racing. Shortly thereafter, New York, a state with a rich history of horse racing, followed suit with its own restrictions, marking a significant turning point in the nationwide movement to curb gambling.

Pictured: Los Angeles Herald, Volume 35, Number 238, 27 May 1908 (Credit: California Digital Newspaper Collection)

By 1910, following the nationwide wave of gambling bans, only Kentucky and Maryland remained as strongholds for legal horse racing, with their racetracks continuing to operate despite the widespread closures elsewhere. These two states, both with deep historical ties to the sport, maintained horse racing not only as a beloved tradition but also as a vital economic activity. 

Pictured: H. Price McGrath, professional gambler and owner of the first winner of the Kentucky Derby (Credit: Keeneland Library Collection)

During the Prohibition period of the 1900s, when alcohol was banned, Americans found ways to access it through illegal channels. This led to the rise of speakeasies, underground bars where alcohol could be secretly purchased. Similarly, the nationwide bans on gambling did not eliminate the practice; instead, it forced gambling to shift further underground, giving rise to a network of illicit bookmakers and illegal gambling rings. This underground gambling, much like bootlegging during Prohibition, became an unregulated and corrupt trade, often involving organized crime, bribery, and widespread lawbreaking, as people continued to seek out opportunities to wager despite the legal restrictions.

Pictured: John Cavanagh, the leader of a band of 600 bookmakers in the early 1900s (Credit: Keeneland Library Collection)

In 1911, The Jockey Club, the organization founded in 1894 that regulates thoroughbred breeding and racing, suspended all racing in New York for the season because of the controversy surrounding gambling and prohibition. The racing industry was far from self-sustaining, and without attendees at the track to place bets, it was not a lucrative business. This suspension impacted tens of thousands of jobs for workers at racetracks and at thoroughbred farms.

Pictured: A 1964 meeting of The Jockey Club in Saratoga Springs, NY (Credit: Museum Collection)

In 1913, New York State made a groundbreaking move by legalizing parimutuel betting, a system that offered a more regulated and transparent way to handle wagers, the same system seen at Churchill Downs in 1908. Under this system, all bets are pooled together, a tax or “house-take” is deducted from the total, and the remaining pool is distributed among the winners based on the results of the event. This method of betting, which is ideal for events with a ranked outcome such as horse racing, helped ensure that the betting process was fair and more honest, reducing the influence of illegal bookmakers and enabling the state to benefit from regulated tax revenue. Many other states followed New York’s lead which allowed horse racing to regain footing in the United States.

Pictured: The recorded bets placed on the 1920 match race between Man o' War and Sir Barton. (Credit: Museum Collection)

This is a record of bets place during the match race between Sir Barton and Man o' War on October 12, 1920 at Kenilworth Park.

Standards for Social Reform in the 1900s

College, Career, and Civic Life (C3) Framework