Cellas Still Betting on Oaklawn Park (Fifth Monday)

by Mark Friedman  on Monday, Mar. 31, 2003 12:00 am  

(Editor's Note: This is the latest in a series of business history feature stories. Suggestions for future "Fifth Monday" articles are welcome. Please contact Gwen Moritz at (501) 372-1443 or by e-mail at gmoritz@abpg.com.)

For nearly 100 years, Oaklawn in Hot Springs has outlasted competition and survived attacks from reformers.

Holding the reins of the racetrack for almost its entire history is the Cella family of St. Louis.

Current Oaklawn President Charles J. Cella took over from his father, John Cella, in 1968. John Cella had been given control of Oaklawn in 1940 after his father, Charles Cella, died at the age of 65.

And Charles Cella had been around the track almost since its inception.

The roots of the first race track in Hot Springs date back to 1902, when William McGuigan, a member of the Arkansas Legislature, bought land on Malvern Avenue. The site became the home of Essex Park, which featured a wooden grandstand, and opened in 1904.

Because of the success of Essex, John Condon, who owned tracks across the country, and Hot Springs businessmen Charles Dugan and Dan Stuart incorporated Oaklawn Jockey Club in 1904. They also brought in brothers Louis and Charles Cella.

Condon and his partners bought some land north of Hot Springs for the race track.

Henry Schrader, who had been assistant superintendent of Condon's Harlem Race Track in Chicago, hired 40 employees with a budget of $500,000 to build "what they hoped would be the finest racing track in the country," according to a 1967 article in the Arkansas Democrat.

When completed, the Oaklawn grandstand featured steam heat with a glass front to protect patrons from bad weather.

Oaklawn opened its doors on Feb. 24, 1905. Admission was $2 (as it still is today), and bookies rented booths for $100 a day.

Essex owner McGuigan, furious that Oaklawn was siphoning off his profits, vowed to destroy Oaklawn. He joined hands with the Rev. W.T. Amis and formed the Citizens Improvement Union to stamp out horse racing in Arkansas.

Though racing continued through the 1906 season, its days were numbered.

To encourage the state to permit horse racing after the 1906 season, Oaklawn offered its grounds as a site for the first Arkansas State Fair.

In the middle of the 1907 racing season, the Citizens Improvement Union's bill to ban horse racing in the state passed, sending shockwaves through Hot Springs. Some residents thought a riot would erupt if the state tried to enforce the law.

Oaklawn attempted to continue running races but shut down the track on March 30, 1907, because customers had been harassed and gate receipts were dropping off, according to a January 1985 article in The Backstretch magazine.

On Again, Off Again

In 1914, Hot Springs' business leaders became concerned about the city's declining revenue and decided a spark was needed to attract more people to town, according to the book, "Hot Springs Arkansas and Hot Springs National Park," by Francis T. Scully.

On Feb. 1, 1914, a group of residents met at the Eastman Hotel and agreed racing would save the city.

A bill to restore racing sailed through the state House and Senate, but Gov. George Washington Hays killed it with his veto. Supporters of the bill sued to override the veto, but it was upheld by the state Supreme Court.

Despite the loss at the Supreme Court level, Oaklawn reopened.

On March 15, 1916, the Business Men's League sponsored the first race meet in eight years. No gambling was allowed — not legal gambling, anyway.

By this time, the original owners, Dan Strut and John Condon, were dead and Louis Cella was the owner. (Louis died of a stroke in 1918 at the age of 51, and his brother, Charles, took over the ownership.)

Oaklawn got a boost when its competitor, Essex Park, burned to the ground on March 30, 1917, and was never rebuilt. Through 1919, Oaklawn held races, but opposition to the races mounted again and the park shut down a second time. The track remained closed until 1934.

In 1929, another bill that would have allowed betting on horse races to resume at Oaklawn was vetoed by Gov. Harvey Parnell. In 1931 and 1933, similar bills didn't even get to the governor's desk. In 1934, Oaklawn held races once again, but betting on the horses was still prohibited.

Home Stretch

After years of being turned down, betting on horse races would finally become legal in 1935. And the impetus for getting the legislation approved was simple: The state was broke.

In exchange for allowing betting, the state would receive a $500 per day license fee, plus 4 cents on every dollar bet and 10 cents from each paid admission. (To this day, the state still receives $500 a day from the license fee and 10 cents from each paid admission.)

On Feb. 22, 1935, Oaklawn opened for legalized gambling and 12,000 packed the grandstand — although officials were hoping for 15,000 fans. That day generated $5,000 in revenue for the state as racing fans bet $78,000.

Through the years, Oaklawn continued to improve its facility. Steam heat was added to private boxes in the paddock in 1951.

The park gained national attention in 1952 when the total amount of money bet jumped 18 percent, from a daily average of $336,341 to $434,667, according to Oaklawn.

But fear hung in the mind of John G. Cella, who had gained control of Oaklawn in 1940, according to an August 2001 report by John Lyman Mason and Michael Nelson for the American Political Science Association.

Two state Supreme Court decisions had approved betting on horse racing because it involved an element of skill, unlike the pure-chance lotteries that are prohibited by the Arkansas Constitution. In 1956, Cella, fearing a future court could reverse that decision, successfully petitioned for a constitutional amendment legalizing betting on horses in Hot Springs.

Changing of the Guard

On Sept. 23, 1968, John Cella died in a St. Louis hospital from a cerebral hemorrhage. His son, Charles J. Cella, took control of the racetrack and remains as its president and chairman of the board.

Oaklawn trainer Robert Holthus said Charles Cella had worked in Oaklawn's backstretch as a teenager.

"He's probably a horseman first and a track owner second," Holthus said. "His father made him come up through the ranks."

By 1973, Oaklawn "was undoubtedly the phenomenon of the racing industry," said the 1985 Backstretch article. While most racetracks were losing fans and revenue, Cella announced expansion plans for Oaklawn.

The 1974 season opened with a new five-level, glass-enclosed addition to the north end of the grandstand, and the good times continued for the park.

Between 1978 and 1987, Oaklawn saw more than 20,000 fans each racing day, and they bet anywhere from $2.3 million to just over $3 million a day.

The highest point came in 1984, when the fans bet more than $3 million every day of the racing season, said Terry Wallace, Oaklawn's track announcer and director of media relations. For the 1984 season, the state received a record $10.78 million from taxes on racing.

But soon afterward, Oaklawn began a downward slide. The triumphant 1984 season was followed immediately by an 8.1 percent decline in wagering and a 3.7 percent decline in attendance. Oaklawn blamed a depressed oil economy and increased competition from neighboring states with longer racing seasons and Sunday racing.

In 1988, the state received $8.16 million from racing taxes, a 24 percent decrease from its high-water mark in 1984. The next year, the Legislature reduced Oaklawn's pari-mutuel tax from 5.5 cents to 2.5 cents on the dollar.

To improve business, Oaklawn lobbied for and received the Legislature's blessing to hold races on Sundays, which Blue Laws had prohibited. Lawmakers also allowed Oaklawn to try simulcast racing, which no other park had attempted, Wallace said.

"And, of course, now it's huge," Wallace said.

But Cella was against the move at first.

"He was always a supporter of live racing," Holthus said. "He was practically forced to do it; he didn't think it was going to work."

Simulcasting meant people in Dallas didn't have to travel to Oaklawn to bet. But it allowed Oaklawn to keep dollars flowing in as people across the country placed bets on Oaklawn races.

The Rise of the Casinos

On top of the other woes Oaklawn faced, casino gambling could have been the knockout blow. Casino gambling started in Tunica, Miss., in 1992, and by 1996, Tunica had six casinos.

From 1983 to 1996, Oaklawn's average daily attendance had fallen from 23,000 to 13,000 and its daily amount bet fell from $3 million to $1.4 million, Mason and Nelson's report said.

"Mississippi had a devastating effect on business here, because there's so many things that they could do that we couldn't do," such as practically giving away meals and hotel rooms, Wallace said.

And Oaklawn has to split the handle with the horsemen, while casinos don't have to share their take.

In 1994, Oaklawn Park teamed up with Southland Greyhound Park, which offers dog racing in West Memphis, and formed the Arkansas First Committee. Their goal was to place an initiative on the November 1994 ballot that would create a state-run lottery, allow charitable bingo and, most importantly, authorize casino gambling only at Oaklawn and Southland.

Once enough signatures were gathered to place it on the ballot, the Christian Civic Action Committee and Common Cause jumped into action by filing a lawsuit against the initiative.

The Arkansas Supreme Court agreed with the antigambling groups and removed the initiative from the ballot, saying the ballot title didn't state explicitly that it would allow casinos.

In 1996, an Oaklawn-dominated group called the Arkansas' Future Committee attempted again to place a gambling amendment on the ballot. Oaklawn's $5 million contribution was the group's only funding source, Mason and Nelson said in their report.

On election day, the amendment failed 61-39 percent.

Citing the "extraordinary" costs of waging an initiative campaign, Oaklawn Manager Eric Jackson said told the Arkansas Democrat-Gazette, "We'll never do it again. We simply cannot go through this again."

Still, thanks to simulcasting and the introduction in January 2000 of Instant Racing, a pari-mutuel electronic horse racing game, Oaklawn is surviving.

Simulcasting means betting continues year-round, even if horses aren't on the Oaklawn track. The total attendance for the 2002 season was more than 200,000 on nearly 200 days of racing, and the total amount bet was $49.7 million.

"Simulcasting is a must for us," Charles Cella said in a January 2001 interview with The Morning News at Springdale. "It is necessary in today's racing world to stay viable, but I am still a racetrack kind of guy. I love to be around the horses and the racetrack people. I truly love racing."



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