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Kentucky Confidential

Agua Caliente and the First Derby Future Book

“What if they had a race and no horses came?” — Smart-ass turf writer in the Churchill Downs men’s room the day before the Kentucky Derby.

“Ask that guy over at urinal number three.” — The only man there who knew the answer.

So you wore your pencil stub down to the nub, read every handicapper, watched the replays on the Internet and, with trepidation in your heart and hope on your mind, found your dream odds in the Churchill Downs Kentucky Derby Future Book.

And wasn’t it considerate and innovative of Churchill to come up with this handy pari-mutuel service?

Actually, it was neither. It was brilliance by default. Churchill didn’t get into the futures business until 1999, more than four decades after the greatest innovator of them all showed the way.

His name was John Alessio and this is his story.

It was 1964, the year of Lucky Debonair, on the day before the Derby, and the man trying to relieve himself in the men’s room was in the middle of a strange balancing act because there was an attache case chained to his wrist.

The guy standing next to him was trying to help by holding the end of the case level.

It was hardly the kind of act that could get you two weeks at the Palace, but it sure was an attention-getter. It developed that the fellow struggling was named Tony Alessio, and the fellow helping was a guy using his vacation time from his normal FBI duties.

Tony was an executive at the Agua Caliente Race Track in Tijuana, Mexico, one of six brothers of John Alessio, the venue’s top executive. Once the sideshow was over, a fellow who knew all the Alessios made the introduction.

In 1920, Dominic Alessio, a coal mine superintendent in Nutter Fort, W.Va., developed asthma and moved his family to San Diego, where he opened a pool hall and shoeshine stand. In John’s words “those Steinbeck-era Okies had nothing on us. That’s how poor we were.”

John Alessio began shining shoes at age 14 on the corner of Fifth and E street. One of his regular customers was a man named C. Arnholt Smith, who was so impressed with Alessio’s street hustle that he decided to mentor him. Smith sent him to Tijuana to work as a messenger for a bank he owned. Before Mr. Smith had finished running his own race, he would own a lot of other things including what seemed like half of California and a number of big-league politicians.

As time went on, Alessio moved up the corporate ladder, and in 1947 he began to advise Agua Caliente, which was owned in part by the bank and failing. This stroke of luck coincided with Prohibition, making the track, 19 miles from San Diego, the nearest place for gamblers and non-gamblers alike to quench a thirst. Alessio began drawing 40,000 of them for weekend racing.

On weekday nights, he raced greyhounds. All week long he ran the first legal off-track betting operation in North America. He invented something he called the 5-10, the forerunner of the Pick Six, and the quinella now commonly called the exacta.

His betting room on American races run back east would open early enough for breakfast. On nice weekdays, when the track did not have live racing, many gamblers would leave the indoor parlors to sit trackside in the sunshine and stare at an empty oval while the announcement rolled out of the P.A.: “The horses for the fifth race at Pimlico are approaching the starting gate.”

There followed the call of the race and the then unheard-of spectacle of racing fans closing their eyes and imagining the race on which they had bet. They cheered, agonized and never saw a horse.

“People … don’t go racing to see the races. They go to the races to gamble on them.”This was long before domestic simulcasting, but it worked because, in the words of Harry Rosen, Alessio’s manager of operations back then, “People on the average don’t go racing to see the races. They go to the races to gamble on them.”

On Derby Day, after a full card of live, local horse racing, Agua Caliente would broadcast the Run for the Roses to a track full of bettors and devoid of horses.

Alessio would sell mint juleps in that setting and even play a recording of “My Old Kentucky Home.”

But the biggest deal of all, the one that lasted for decades with absolutely no competition, was born of John Alessio’s understanding of the American horseplayer’s unquenchable thirst for an edge in a business in which customers are fueled by little more than high-octane greed.

Like today’s Kentucky Derby Future Book, the odds were long enough (compared to what you ultimately get on Derby Day) to mask the considerable perils. Your horse could not drop dead before the race, had to run in the Derby and had to win. It’s a terrific bet — if you get to cash it.

Alessio’s Derby Future Book was recognized around the country by wire services and newspapers, and the odds always credited to Agua Caliente.

It finally died after decades. Before Caliente passed on, Alessio had already staged the first $100,000 horse race in North America and actually developed the first jockey’s safety helmet.

The story did not finish happily for the Alessios. John was indicted by the U.S. federal courts for income tax evasion and other charges. He eventually spent several years in jail as did two of his brothers and his son.

But what about that attache case that triggered all of these memories?

Well, the answer is not all that complicated. The Caliente Future Book was, for years, a viable gold mine for the Brothers Alessio. The huge volume of wagered and lost bets ensured that. A look at the simple mathematics of the structure, however, did leave room for a single sizeable hit to heavily trim the black ink side of the proposition.

Enter, Brother Tony and his watchful FBI traveling companion.

Each year the family cabal would look at the numbers and ponder a solution to minimize such a setback. And each year it would be the same. They would stuff an attache case with money and send Tony off to the blue grass country to make a live bet on the longest shot in the race as a hedge against a small disaster. And each year he would be accompanied by his regular bodyguard on vacation.

Tony never got robbed.

Tony always lost.

To paraphrase Branch Rickey’s definition of results, luck, as practiced by the Alessio Clan, was clearly the residue of design.

On the morning May 1, 1965, Tony, under the watchful of his pistol-carrying companion, unlocked his attache case, looked at the tote board, went to a high-rollers window and put down $5,000 on a creature named Narusha at 92-1 to (God forbid) win.

Narusha finished 10th in a 10-horse field, beaten by about 27 lengths.

Obviously, Papa Dominick and Mrs. Alessio didn’t raise any fools.

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Author PhotoWorking from Churchill Downs undercover, Blinkers Off is a legendary, award-winning sports writer spinning tall tales from Derbies past. More by  ›