Caliente Bets Its Life on the Appeal of All-Sports Wagering

Long before Jorge Hank Rhon took over Caliente in 1985, the picturesque Mexican race track near San Diego was known as much for its survival struggles as for its innovations.

On one hand, Caliente gave North American racing its first $100,000 race, the electronic starting gate, the jockeys’ safety helmet, future-book betting on the Kentucky Derby, the inspiration for the pick six and a once-only look at Phar Lap, that brilliant, tragic horse from Australia.

On the other hand, Caliente was always a place that seemed to be fighting odds over which it had no control.

Americans could drink legally again in 1933, four years after Caliente opened and thrived because it was a no-holds-barred track in a no-holds-barred town. By the mid-1930s, Santa Anita and Del Mar opened, immediately offering nearby Californians the chance to bet on a better class of horses.

There were resurgences by the race track here, helped by betting gimmicks that Americans would copy, but in 1971 Caliente burned to the ground and by the start of this decade the track had a tenuous ownership and a mounting debt.

Even when Hank came along four years ago, the prospects for Caliente were not bright. Not yet 30, Hank was the son of a former Mexican governor and mayor of Mexico City and already wealthy. Besides buying Caliente, he began investing in Tijuana, creating jobs and throwing himself into charitable causes.

But Hank was an industrial engineer, not a Merlin, and he was taking over a track that had been losing money for at least three years. A breeder of thoroughbreds for only a short time, Hank had more long-term interests--exotic birds, dolphins, Rottweilers, pygmy donkeys, snakes and eels. At one time, Hank even had an uncaged pet cheetah in his office. Asked by an uneasy visitor about the animal’s presence, Hank said: “Because he’s faster than a horse.”

Caliente was not fast out of the gate under Hank’s stewardship. In 1987, California legalized a form of off-track betting that would enable Del Mar, about 40 miles north of Tijuana, to stay open year-round. Besides running its traditional seven-week season during the summer, Del Mar would also be able to take bets on the races from Santa Anita and Hollywood Park during the rest of the year.

Caliente is said to be about $15 million in debt under Hank. The track’s best hope is that he has an imaginative flair not unlike that of John Allesio, who gave Caliente a vital transfusion of fresh ideas after World War II.

Allesio, credited with starting the 5-10 bet that has evolved into the pick six, was not adverse to spending money on a promising project, and neither is Hank. Hank has spent about $5 million in the last couple of years, not only expanding Caliente’s chain of race books in Baja California, but also taking the track into new territory that might save it.

For years, Caliente has offered betting on horse races from around the country, but starting in late August, with approval from Mexico’s president and Hank’s family friend, Carlos Salinas de Gortari, the track began taking bets on other sports at eight locations in Baja California. State-run parlay-card betting on National Football League games has begun in Oregon and is spreading to Kentucky and other states, but other than Nevada, Caliente may be the only place in the world that has legal, all-out betting on American sports other than horse and dog racing.

Last Tuesday night, in a strangely shaped, oblong room that abuts the Jai-Alai fronton in downtown Tijuana, Caliente formally opened a glittery all-sports book that is expected to be one of the showpieces in the nine-site network. The others are located at the track; in the Hotel Fiesta Americana, downtown a few blocks from the fronton; in Rosarito Beach, Ensenada, Tecate and Mexicali; and in a facility that’s about two miles from the U.S. border.

The race-track book can accommodate 2,000 players and is the largest, although the new downtown building has a third floor that leads to the fronton itself, where there is room for 5,000 should the seats for 400 at the downstairs tables and bars fill up.

All of the books are equipped with television monitors that display a dozen satellite feeds for racing and other sports. The books, as before, offer betting from nine tracks a day. Odds for sports other than racing are posted manually on large boards and all betting is automated. There is full restaurant service at several of the facilities and in the books where an admission fee is charged--from $5 to $50--the customer receives a betting voucher good for the same amount he pays to get in.

There are limits on bets, much like the ceilings in Las Vegas. In Tijuana, for example, the limit for a straight bet on a baseball game is $2,000, on an NFL game $10,000.

“How it works, though, is that there is really no limit,” Hank said. “We will take a bet of any amount, but if the bettor wants to go over the posted limits, he must agree to take shorter odds. In other words, there is really no limit on a bet, but there is a limit on the possible payoff.”

Last year, when Winning Colors won the Kentucky Derby, the Caliente books reportedly lost $750,000 because the odds on the filly were still at 20-1 long after she won the Santa Anita Derby and became one of the pre-race favorites at Churchill Downs.

When Delaware, over strong protests from NFL commissioner Pete Rozelle, introduced pro football parlay cards several years ago, the state’s venture quickly died because the point spreads were ill-conceived on many of the games. Caliente expects to do better, having hired Michael Roxborough, a Las Vegas oddsmaker whose numbers are used by more than two dozen books in Nevada.

Apparently no one in Nevada perceives Roxborough’s selling of his services to Caliente as a conflict of interest. Las Vegas, of course, still has the ultimate inducement--casino gambling besides sports betting--although big payoffs at Caliente will escape the shares demanded by the Internal Revenue Service.

“I don’t see anyone offering real competition to Las Vegas,” Roxborough said. “Nevada’s position should be enhanced by Caliente. Those who get a taste of football and other sports down there will want to come to Nevada, where the real action is.”

Frank Tours, a veteran race-track executive, writes for a Las Vegas newsletter that covers gambling in Nevada.

“The only way Las Vegas would get worried about all-sports betting is if it was legalized in California,” Tours said. “If California would legalize that kind of action with the aid of the race tracks, it could use the state fairs and the regular tracks, and have a circuit of sports books all up and down the state’s coast. And wouldn’t the IRS love something like that.”

Bob Strub, chairman of the board at Santa Anita, would not love it, but Joe Harper, the general manager at Del Mar, can visualize all-sports betting being eventually proposed for California. He wonders whether tracks should join that movement rather than fight it.

“I still think our business is racing,” Strub said. “Naturally, you always have to be concerned about the competition. Yes, I’ve heard some talk about all-sports betting for California, but it’s not of the nature that we might expect anything to be suggested right away.”

Hank says that Caliente had a handle of $146 million on horses and greyhounds last year. Del Mar, enjoying its biggest season this year, handled $127 million on-track in only seven weeks, and 11 off-track sites, led by Hollywood Park and Santa Anita, handled $187 million more. There was $1.3 billion bet in Las Vegas on sports last year.

For 1990, Caliente’s first full year of all-sports betting, Hank projects that the $146-million handle will double. He estimates that 90% of the bettors at the sports books are American, contrasting with about 75% of the horseplayers here.

“We have a lot of new bettors betting on football, baseball and the other sports,” Hank said. “It could be as high as nine out of 10 customers. We are hoping to get many of these people interested in betting horses. When you watch a game on television, it takes a couple of hours or more. We’re hoping that during this time, our customers will get interested in the horse races, too. Maybe if a guy is losing his football bet at halftime, he’ll try to get even by betting a few races during the intermission.”

Long ago, when it seemed as if most of Hollywood would invade Tijuana, casinos were rampant here. But Hank does not appear to be interested in introducing blackjack tables, roulette wheels and slot machines.

“We think all-sports betting will help the race track,” he said. “Casino gambling would kill the horses and the dogs.”

Tijuana has grown from a village to a city of about 1.7 million and the area has been billed as the potential cornerstone for the future of a troubled Mexico.

“There is a boom going on locally,” Hank said. “Industry has been coming in and there is a lot of construction going on. The town had only one real good disco, now three others are being built.”

It’s not surprising that Hank would use the disco reference, because he has stamped himself as a man who likes a good party. He threw a wedding soiree for a friend from Kentucky that lasted a weekend, with the guests eventually getting into the ring for some mock competition against miniature bulls.

For those visiting Hank’s office in anticipation of a quick thrill, he reports that the cheetah has been moved to his home across the street from the track. But one of his pet Rottweilers is still a factor.

“I saw Hank in his office and it was one of the strangest interviews I’ve ever done,” said Bill Murray, a writer for the New Yorker. “That Rottweiler never took his eyes off me the entire time. It sure kept you alert.”