The New Republic

On a clear day, when the sun shines so brightly that the Kentucky

bluegrass actually looks just a little bit blue, Arthur Hancock can

stand atop one of Bourbon County's rolling hills and survey a good

portion of the 2,000 acres he calls Stone Farm. He can see the

low-slung barns; the tall ash and oak trees; the miles of woodenfence; and, most importantly, the horses. Stone Farm has more than

200 of them--mares looking after their foals, yearlings grazing

together, stallions prancing in their private paddocks. But about

five miles from Hancock's perch, just over the horizon and out of
his

sight, there is another horse farm, Claiborne Farm--the farm that
was

supposed to be his.

Hancock is a fourth-generation horseman--the son of the legendary

Bull Hancock, who in the mid-twentieth century turned Claiborne into

the mightiest farm in all of Kentucky horsedom. But as a young man,

Arthur's first love wasn't horses; it was music: He played the
guitar

and wrote songs, and he was good enough at both that in the
mid-1960s

he signed a deal with Monument Records. Arthur kept a hand in the

horse business--working for Bull at Claiborne--but even then he

indulged in the musician's lifestyle, drinking and carousing and

occasionally spending the night in jail. He was, he once said, "a

freewheelin', hard-drinkin', guitar-pickin', bar-brawlin',

skirt-chasin' fool." So much so that when Bull died in 1972, he left

Claiborne not to the 29-year-old Arthur but to three trustees, all

prominent members of the horseracing establishment, who--ignoring

primogeniture--awarded the farm to Arthur's 23-year-old brother,
Seth.

Denied his birthright and shunned by a buttoned-down horseracing

establishment, Arthur left Claiborne's 4,500 acres an outcast and

moved a few miles down the road to a 100-acre farm that had once

belonged to a man named Stone. "It was a raggedy farm," recalls Al

Smith, a Kentucky newspaper publisher who visited Hancock in the

early days of his exile. "He was writing country music songs and

playing the guitar, and his girlfriends would bring him

comforts--food and other comforts--from town." But over time Hancock

settled down. He married the daughter of a Louisville dentist; he

moderated his drinking; and, relegating music to the status of a

"strong hobby," he committed himself to the business of breeding and

owning horses.

And like his father, he was good at it: Over the years he
transformed

Stone Farm from an Elba into the envy of horsemen all over Kentucky.

In 1981 Hancock became the first breeder ever to sell a yearling

filly for $1 million. A year later he attained an honor that had

eluded even Bull: One of his horses won the Kentucky Derby--a feat
he

would accomplish two more times. All told, over the past 30 years,
he

has bred or raised more than 100 stakes winners. Stone Farm is now
as

much a part of the racing establishment as Claiborne; and Hancock,

like his father before him, is considered one of Kentucky's top

horsemen.

One cool morning in April, I visited with Hancock as he made his

early rounds at Stone Farm. Standing outside a barn, he watched his

farmhands lead a dozen or so yearling colts--fresh from their
morning

feeding--out to an adjacent field. A tall man with long limbs and an

ambling gait, Hancock didn't flinch as some of the colts roughhoused

a few feet away from where he stood. He squinted through his large

glasses and examined each one, commenting on their physiques and

bloodlines. "He looks like an athlete," Hancock said of one finely

muscled colt. "He's got a little bit of Secretariat in him," he said

of another. As the colts--a few million dollars worth of

horseflesh--gamboled around the field, Hancock turned to me and

smiled. "You might have just seen a Triple Crown winner," he said,

"you never know."

Nearing 60 and a millionaire several times over, Hancock didn't need

to be out by the barn looking at colts that morning. Stone Farm,

after all, now employs about 30 people. But accompanying Hancock as

he tended to his farm's business, it wasn't hard to see why he kept

at it. With a passion unique to someone who has fallen away from the

faith only to return, Hancock loves the horse world. As we drove the

farm's roads, he kept up a running patter about the beauty of it

all--the blossoming gum and maple trees, his prized stallion, the

creek that runs through his property. "The horse business,"Hancock

finally pronounced, "is a good business." Indeed, the man who was

once too rebellious and wild for that business has now become one of

its most avowed traditionalists.

Which is why Arthur Hancock finds himself an outcast once again. The

reason for Hancock's current estrangement is that he opposes

introducing slot machines to Kentucky racetracks. And the Kentucky

horseracing establishment is asking the state legislature for

permission to do just that. Kentucky's eight racetracks, slots

proponents argue, face a mortal threat from the floating casinos

anchored on the Ohio River in Illinois and Indiana, and from the

racetracks in West Virginia--known as "racinos"--that boast gaming

machines. Without slots at the tracks, the argument goes, more and

more Kentuckians will spend their entertainment and gaming dollars
at

the riverboat casinos, and more and more owners will race their

horses for the higher, slots-fueled purses offered in West Virginia.

And if Kentucky's racetracks struggle, so will the rest of the

state's horse industry, which employs 80,000 people. "It's very

straightforward," says David Switzer, executive director of the

Kentucky Thoroughbred Association, which represents the state's

owners and breeders. "We need the slot machines to protect the

Kentucky horse industry."

Kentucky, of course, would hardly be the first place to allow slots

at racetracks. Racinos--with their combination of old-fashioned

horseracing and newfangled video-gaming machines--now operate in six

states. But horseracing in Kentucky is not like horseracing anywhere

else. Kentucky is the sport's historic and spiritual home--the place

where more than 30 percent of the Thoroughbreds in the United States

are born, the place that every first Saturday in May hosts what,
even

after 127 years, remains horseracing's most storied event: the

Kentucky Derby. Indeed, Kentucky is one of the few remaining places

where horseracing is even still viewed as a sport, much less the

sport of kings. Expanded-gaming proponents contend that without
slots

to pump up the purses at the tracks--which will then translate into

higher sales prices for owners and higher stud fees for

breeders--Kentucky's signature industry and most abiding civic

institution will wither and die. But for a man like Arthur Hancock,

the question is this: Once Kentucky horseracing's saviors are done

saving it, will it bear any resemblance to the thing they were so

desperate to save?

Horseracing has always been inextricably linked to gambling: As long

as man has been racing horses, he has been betting on the results.

Originally the pastime of a small clique of British nobility who

would wager large sums on what were often head-to-head contests

between their favorite horses, horseracing came to the United States

with the colonists. And, as in Britain, it was initially a pursuit

largely restricted to members of the upper classes who owned horses

themselves. But by the time the Civil War started, America's

democratizing impulses had transformed horseracing into a pastime

with mass appeal, and it had become a hugely popular spectator
sport.

Kentucky horseracing's Mecca was Churchill Downs, the famed

twin-spired racetrack in Louisville. Built in 1874 as a place for

Kentucky's blue blood breeders to showcase their wares, the track

paid out its race purses from the money it made from gaming. At

first, bookies controlled gambling at the track. But by the early

1900s, as Timothy L. O'Brien writes in his book Bad Bet, the bookies

were fixing races and bilking bettors. Facing a public backlash over

horseracing's increasingly seamy reputation, Churchill Downs turned

to something called parimutuel betting, which relies on tabulating

machines, not bookies, to take bets--and therefore allows the odds
to

be determined by the gamblers themselves. With bettors essentially

betting against other bettors, the track simply acted as a

stakeholder, holding the bets--and taking a standard cut out of each

one (usually about 20 percent) for, in effect, putting on the show.

After Churchill Downs blazed the trail,the parimutuel system quickly

caught on at racetracks across the country.

Over the years betting on horses has evolved. The standard "win,"

"place," and "show" bets--in which a bettor merely picks whether a

horse will come in first, second, or third--are now joined by more

elaborate wagers like "daily doubles," "exactas," and
"trifectas"--in

which a bettor must pick a combination of outcomes. And bettors are

no longer limited to betting on races at the track they attend. With

the advent of simulcasting, 80 percent of all the money wagered on

horses is now done remotely. But no matter how much betting on

horseracing has evolved, it is all still run on the parimutuel
system.

For close to a century now, horsemen--particularly blue blood

Kentucky horsemen--have pointed to the parimutuel system as proof

that horseracing is a nobler pursuit than run-of-the-mill gambling.

Unlike cards or slots or lotteries, in horseracing the house has no

stake in the outcome. What's more, betting on the horses is not just

a matter of luck: A good handicapper, horsemen will tell you, isn't

that different from a good horseman--both study things like

bloodlines and musculature to determine how a horse will run. That's

why horsemen, while acknowledging that racetracks could not operate

without the money they make from betting, have also claimed that

gambling is largely tangential to "the sport." As Hancock puts it,

"We're a sport that you can bet on."

But that was not what Churchill Downs President Alex Waldrop told me

when I visited him at the track a few weeks before the Kentucky

Derby. A lawyer by trade who grew up in Western Kentucky--"as far

away from a racetrack as you can get in the state of Kentucky," he

says, "and still be in Kentucky"--Waldrop was not involved with

horseracing before Churchill Downs hired him as its in-house counsel

ten years ago. But after rising through the corporate ranks to
become

the track's president, he is now one of the most important voices in

the Kentucky horse industry. An energetic man in his early forties,

with a ruddy face and boyish brown hair, Waldrop clearly relishes
his

position. Sitting in his wood-paneled, windowless office behind the

track's clubhouse, I asked him if betting was horseracing's

fundamental attraction. "Yes, it is," he said. "Horseracing is not

like team sports or individual sports. It's very difficult to get a

rooting interest, a team-like rooting interest in a horse. ...
People

have to have a betting interest."

As Waldrop sees it, horseracing is at a crossroads. "Horseracing
used

to be the only game in town--literally," he said. But with the
growth

of state lotteries and casinos, "racing now finds itself, in the

first part of the twenty-first century, as one of a variety of

gambling options." And the competition has hurt revenue at the

tracks. The crisis is particularly acute in Kentucky, Waldrop said,

because two tracks--Turfway Park near Cincinnati and Ellis Park

(owned by Churchill Downs) in Western Kentucky--are being driven out

of business by nearby riverboat casinos. Even Churchill Downs, one
of

the most profitable tracks in the United States (it posted net

earnings of $22 million last year), has seen a drop-off in business,

a drop-off it attributes to the Caesars Glory of Rome riverboat

casino about 13 miles away in Indiana. If any tracks go under,

Waldrop said, the state's year-round racing circuit--which in

addition to good soil is one of the fundamental appeals of raising a

horse in Kentucky--will be broken, dealing a serious blow to the

state's entire horse industry.

Slots, Waldrop argued, would fix all that. "The best way to bring

people back to the track is to offer them more variety at the track,

to basically give them what they want," he said. "There are some

people who are engaged by and enjoy ... wagering on horseracing. But

there are many people for whom there's too much work involved or
it's

too intellectual.... You can play the slot machine twenty-five or

thirty times in the span of time it takes to place a wager on a
horse

race." To house the slots at ChurchillDowns, Waldrop envisions

building a $100 million casino behind the track's grandstand. "The

model we're working with is not one that says put a few machines in

the corner," he said.; Can the tracks serve two masters?

While Churchill Downs has been fighting for slot machines since
1994,

the rest of the Kentucky horseracing establishment has only recently

joined the battle. But now that it has, it's fighting with all its

might: In the past year the Kentucky horse industry has launched an

advertising blitz and lobbied legislators--all in all spending $1

million in support of slots. The money has paid off. Recent polls

show that public opinion, once decidedly against slots, is now in

favor of them. And in the legislative session that ended last month,

the pro-slots forces, for the first time, got a slots bill passed
out

of committee. "This time last year we weren't in the game," Waldrop

said. "Today people know and understand what we're about. They know

what we can deliver." Several people in the horse industry told me

they expect the slots bill to pass the full legislature next year.

One key reason is Kentucky's mounting fiscal crisis. Currently
facing

a $500 million budget deficit, the state needs a new revenue stream,

which the slots would provide. "Gaming is a stable source of revenue

for government," said Waldrop, citing predictions that slots would

eventually bring Kentucky $300 million in annual tax revenue. "The

question is, can we afford to leave those opportunities on the
table?

Can we afford to allow those hundreds of millions of dollars to go

across the river to Indiana, Illinois, and other states when our own

programs here are going begging?" Slots will not only save Kentucky

horseracing, he seemed to be saying, they will save Kentucky.

In its argument to the state legislature, the Kentucky horse

industry has stressed the fiscal benefits slots would bring. And as

with other gambling debates, opponents have responded that slots

would breed poverty and addiction. As the Reverend Nancy Jo Kemper,

executive director of the Kentucky Council of Churches, puts it,
"The

gambling business is a predatory enterprise." She points to studies

showing that a person who earns $10,000 per year gambles twice as

much as someone who earns $40,000 and four times as much as someone

who makes $80,000. "Slots would be a tax on people who are poor and

desperate for luck."

Arthur Hancock, however, isn't particularly interested in that

broader debate. "In the short term I'm sure slots will actually make

people a lot of money," he says. "But in the long term I think

they'll be bad for the horse business." Part of Hancock's opposition

to slots--which he made public in a much-discussed editorial in the

Lexington Herald-Leader entitled "NOT EVERYONE IN THE HORSE INDUSTRY

BACKS SLOTS"--stems from a folksy brand of elitism. Slots proponents

argue that higher purses will make horses a more attractive

investment and lure new people into the industry, and Hancock
doesn't

necessarily disagree; he just doesn't think that's a very good
thing.

"One of the ways the horse business gained its respectability was by

having nice, respectable people in it--people like the Whitneys and

the Vanderbilts," he says. "They call it the sport of kings and the

reason they do is because it takes a king to afford to be in it. ...

And I worry that we wouldn't get nice, respectable people in the
game

if we were involved with slots." After all, the horse world, as

Hancock has always known it, is a world of timeless gentility, a

world most people enter only when they've had enough of--and made

enough money in--crass, commercial endeavors.

But at a deeper level, Hancock opposes slots because he fears they

will ultimately take the focus away from the horses. "When you go to

the racetrack you see a show," he says. "You get pageantry and

tradition. ... I don't think the tracks can serve two masters.

They're either in the horse business or they're in the gaming

business. And, as a horseman, I want the tracks to have their
primary

interest be in horses." If it isn't, Hancock predicts,

bottom-line-conscious racinos might eventually start wondering why

their hugely profitable, low-overhead casinos are subsidizing

economically sluggish, high-overhead racetrack operations at
all--and

horseracing will simply fade away. And without horseracing, places

like Stone Farm--and perhaps Kentucky's horse country itself, an
area

so beautiful and unspoiled that more than one person has likened it

to a ten-million-acre national park--will cease to exist.

Not surprisingly, Hancock turns to music for an analogy. Sitting in

his car that April morning at Stone Farm, he talked about the father

of bluegrass, Bill Monroe. "Times got really hard for Bill Monroe

when rock 'n' roll came around," Hancock said. "He was having
trouble

finding places to play, and he wasn't making any money. I mean,
there

was a time there when he was playing for pennies. And people were

saying to Bill Monroe, `You need to put drums ... into your music to

make it more commercial.' And Bill Monroe said, `No, the mandolin
has

the chop, that's the percussion.' ... And he kept playing the way

he'd been playing. And then the bluegrass festivals started picking

up around the country, and he started making some money and doing

better. And look at bluegrass music now. `O Brother' is the

number-one album in America." Hancock paused. "If we get into this

slot thing," he continued, "it'd be like putting drums in Bill

Monroe's music."

For traditionalists like Hancock, there is no better place to watch

the races than at Keeneland. Located on 900 acres near the Lexington

airport, Keeneland--with its rolling hills and rustic barns and

cottages--looks more like a country club than a racetrack. Indeed,

Keeneland, which is operated as a nonprofit, makes most of its money

from its booming sales business--usually earning about $30 million

per year from its horse auctions. But for about 30 days in the
spring

and fall, Keeneland plays host to the races.

On a Thursday in April, I caught one of Keeneland's nine-race bills.

Like everything else at Keeneland, the racetrack itself is

beautiful--a limestone structure with a slate roof and ivy-clad

walls. Offering the highest average daily purse in the United States

(more than $625,000), Keeneland draws only the best Thoroughbreds.

And, as if they didn't want to sully the lovely surroundings, many
of

the 10,000 or so people at that day's races were dressed to the

nines. Men wore coats and ties--or at least polo shirts and

khakis--and the women sashayed around in sundresses.

The point, however, wasn't the gambling. The parimutuel windows did

steady business, but most of the bets I overheard were of the

small-time variety: "Third race, four dollars to show on number

five." (Keeneland actually has one of the lowest per-capita wagers
in

the United States.) Rather, the real draw was pageantry and sport.

Before each race, fans crowded the paddock area behind the
grandstand

and watched as the horses were saddled and led around by grooms.

Then, after the horses were paraded to the track and the trumpeter,

in a green topcoat with gold piping, had called the horses to the

starting gate, the fans thronged the grandstand and the apron below

to watch the race. To the extent that the betting line seemed to

matter, it was only to make the races more dramatic. In the sixth

race, when a 90 to one filly named Camara Cat sprinted down the

homestretch and crossed the finish line ahead of the rest of the

field, the crowd let out its loudest cheer of the day. That hardly

anyone had bet on Camara Cat--that her unlikely victory had, in
fact,

made thousands of people into losers--barely seemed to matter.

During such moments, it was easy to understand Keeneland's motto:

"Racing as it was meant to be." But even Keeneland is adjusting to

the times. After stubbornly refusing to join Churchill Downs' slots

campaign for close to six years, Keeneland threw its support behind

the effort about 18 months ago, removing the last major resistance
to

slots in the Kentucky horse industry. Keeneland has since indicated

that if and when the slots proposal becomes law, it will start

construction on a state-of-the-art casino--with buffet restaurants,

ample parking, and thousands of square feet for slots

parlors--somewhere on its 900 acres.

Before that day's races, I visited Keeneland's recently retired

chairman, Ted Bassett--who remains one of the track's three

trustees--at the office he keeps in a stone cottage on the eastern

edge of the Keeneland grounds. A tall, courtly man with combed-back

white hair and large, inquisitive eyes, the 80-year-old Bassett has

had one of those richly varied lives that seem unusually common in

horse circles. Born and raised in Kentucky, he was a basketball star

at Yale and won a Purple Heart as a Marine infantry officer in

Okinawa. He served as director of the Kentucky State Police for

eleven years in the 1950s and '60s; and in 1968 he went to work at

Keeneland. He is probably one of the few people in the world whose

office bookshelf displays pictures of himself with J. Edgar
Hoover--a

memento from his police days-- and Queen Elizabeth, whom he hosted

when she visited Keeneland in 1984.

As Keeneland's chairman, Bassett had been the driving force behind

the track's opposition to slots. In 1995, when paranoia over

potential competition from riverboat casinos was running rampant and

the pro-slots movement was gaining momentum, Bassett appeared at a

legislative hearing in Frankfort and, pronouncing himself a
protector

"of the traditions of racing," declared: "We are not going to cave
in

to the hypothetical threat of a mythical armada cruising down the

Ohio from Ashland to Paducah...." The speech, everyone agrees,

stopped the slots movement dead in its tracks.

But in the intervening six years Bassett began to reconsider his

position. One factor was Keeneland's 1999 purchase--in partnership

with the casino company Harrah's and the lottery-services giant

G-TECH--of Turfway Racetrack, which is just across the Ohio River

from Cincinnati and faces direct competition from riverboat casinos.

But more importantly, Bassett said, he and Keeneland began to study

the slots issue more carefully. He led a Keeneland delegation to one

of the riverboat casinos--"to observe," he noted--and was astounded

by what he saw. "I was amazed at the investment. I was amazed at how

they've transformed riverboats into floating gaming palaces. I was

amazed at the quality of the food and the service and the creature

comforts," Bassett said in a tone that still sounded slightly awed.

"There are busloads of people that go to those boats: women's clubs,

Rotary Clubs, civic clubs, groups of friends ... coming from four
and

five hours away." The armada, it turned out, was no myth.

Bassett, one of the most respected men in Kentucky horsedom, is now
a

strong proponent of slots and racinos. "There is competition for the

leisure dollar," he said. "If our racing industry is going to not

only survive but prosper and survive, we have to properly consider

expanded gaming." Bassett has little patience for those who continue

to hold the view he himself once held, dismissing them as "jaundiced

moralists." But that's not to say that he is without regrets. "In
the

twilight of my career, with one foot in Alzheimer's-ville, I would

like to see life in the racing world continue the way it has been
for

the last fifty years," Bassett said in the stone cottage on the 900

acres that, for the moment at least, still seemed frozen in time. "I

feel very strongly about [horseracing's] past, present, and future.

But it's the future I'm concerned about."

One vision of that future can be glimpsed in Kentucky's neighbor to

the east, West Virginia, at the Mountaineer Racetrack. Sitting
amidst

the steel factories and power plants that line the Ohio River in the

state's northern panhandle, Mountaineer has experienced a

much-ballyhooed renaissance in recent years. Less than one decade
ago

the track was losing $12,000 per day and was on the brink of

bankruptcy. But in 1994 West Virginia legalized video gaming at

racetracks--and Mountaineer was saved. Reborn as a full-scale

entertainment and gaming complex, Mountaineer Racetrack and Gaming

Resort, as it's called these days, is now touted by Fortune as the

forty-seventh fastest-growing company in the United States; Forbes

recently ranked it seventh on its list of America's best small

businesses. Last year Mountaineer earned $19 million on revenues of

more than $200 million. All that money has enabled the racetrack to

offer higher purses, which have risen from about $22,000 per day in

1994 to $160,000 per day at the beginning of this year. Indeed,

Mountaineer's slots-fueled purses are now so enticing that many

Kentucky horse owners are sending their low-level claiming horses to

the West Virginia track instead of the closer-to-home Turfway Park,

which once had a near-monopoly on Kentucky's lower-rung
Thoroughbreds.

On a recent Friday night Mountaineer was bustling. The

140,000-square-foot "Speakeasy" casino was packed, as men and

women--holding plastic buckets filled with tokens or wearing Velcro

bracelets that attached, via pink cords, to game-credit cards--sat
in

front of slot machines with names like "Easy Street" and "Winning

Touch" and "Money to Burn." Underneath a massive faux-Tiffany

chandelier, people padded around the carpeted hall, sipping drinks

and staring at posters for upcoming Mountaineer concerts by
Englebert

Humperdinck and Kenny Rogers. One flier touted an upcoming

Mountaineer event called "Polkapalooza." Each ad bore Mountaineer's

slogan: "We'll Leave the Slots on for Ya!" The sound of the pinging

machines was constant.

But on the other side of the Mountaineer complex, over at the

racetrack, the crowd was sparse and things were quiet. The
grandstand

was mostly empty, the cavernous space containing only a few dozen

people and the sound that came from a track television tuned not to

the races but to the movie Grease. Down below, on the apron by the

track, a couple hundred fans--most in jeans and t-shirts-- lingered

at picnic tables. They drank beer and scanned that night's race

program, and every now and then, some of them would get up and head

back inside to place their bets and get more beer.

After a little while, the public address system played a tinny

recording of a trumpet and the horses were led out onto the track.

Unlike the horses that run at Keeneland and Churchill Downs, the
ones

at Mountaineer won't ever contend for the Triple Crown: They are the

also-rans--the horses that were never able to fulfill their owners'

dreams. The third race that night was restricted to
"maidens"--horses

that have never won a race before. But even if the horses were

maidens, they were still Thoroughbreds, and as their muscled,

1,200-pound bodies were loaded into the tight confines of the

starting gate, it was easy to see how desperately they wanted to be

released so they could run.

When the gates flew open, a dark-brown horse named Drummin Slew was

the first one out. A five-year-old gelding who went off at 22 to
one,

Drummin Slew was a long shot in a field of long shots. But as the

horses raced around the mile-long track, Drummin Slew built on his

initial lead, so that by the time the field was heading into the

homestretch, it looked like he had matters in hand. But then the
race

favorite, a black gelding named Randi's Song who started at two to

one, made his move. Coming down the homestretch, Randi's Song gained

on Drummin Slew until the two horses were practically neck and neck.

Their jockeys' whips flying, the two horses galloped nearly in sync.

Their eight hooves were suspended above the ground at almost exactly

the same time, and when they came back to earth, there was a mighty

thud and a thick cloud of dirt. Both horses strained for the finish

line, fighting for a position that neither had ever known. And as

they crossed the line, with Drummin Slew holding off Randi's Song to

win by a neck, the moment was all at once happy and sad and almost,

in a way, beautiful. But on the apron, the people in the sparse
crowd

just crumpled up their losing tickets and headed back inside for
more

beer, and it seemed clear that no one had even noticed.

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