This week on the Be Epic podcast, we continue with the Arkansas Business Hall of Fame series as Brent is joined by Eric Jackson, the Senior Vice President of Oaklawn Hot Springs and a 2024 Arkansas Business Hall of Fame inductee.
The episode delves into Eric's fascinating career, which spans over 40 years at Oaklawn, highlighting his surprising induction into the Hall of Fame and his transformative role in the racing and gaming industries in Arkansas.
Eric shares his journey from his early days sneaking into races in Hot Springs, to his innovative contributions to Oaklawn that have established it as a premier racing center and gaming destination in the South. Listeners will hear about the challenges Oaklawn faced, including competition from neighboring states and their successful strategy in introducing simulcasting and electronic wagering products, which ultimately revitalized the business.
Brent and Eric's conversation offers insights into the resilience and innovation required to navigate the dynamic landscape of business in the sport and gaming sectors.
Podcast Episode
Episode Transcript
Brent Williams 00:17
Welcome to the Be Epic podcast, brought to you by the Sam M. Walton College of Business at the University of Arkansas. I'm your host, Brent Williams. Together, we'll explore the dynamic landscape of business, and uncover the strategies, insights, and stories that drive business today. Well, today, I have with me, Eric Jackson. Eric is Senior Vice President of Oaklawn. But what we're talking about today is that he is a member of the 2024 Arkansas Business Hall of Fame. And so Eric, I should start with just a big congratulations.
Eric Jackson 00:59
Thank you and, and a big surprise. So yeah, I didn't see this coming.
Brent Williams 01:06
Well, I can attest to that. It was a surprise. I got to I got the opportunity to surprise you at Oaklawn. And what fun to get to hear some of your story, meet your wife, meet some of your co-workers there. That was a fun day.
Eric Jackson 01:21
Well, the backstory to that is is longtime Oaklawn lawyer and friend Skip Evil said that you were going to be in town. He was taking you around. He said, do you think we could do a lunch at Oaklawn? I said, sure. Be glad to I'd like to meet him. And my wife left early. She said I'm I'm going to exercise or the spa or someplace. So I got out there ran into Lou Sela. And he said, Are you having lunch with Skip? And I said, teah, he said well, let's go on up. I think Skip's here, and I said, fine. So we walk into the Bugler, which was closed at that particular time of the day. And because of the way the windows are in the background, all I could see are silhouettes. Except I see my wife and I'm going, what in the world is Linda doing here? I guess she ran into Skip and Skip said, come on and have lunch. But there's like, I can see there's like 10 or 12 heads and had no idea. I mean, totally set up by Skip Evil.
Brent Williams 02:19
Well, he did do a great job. And we had a lot of fun. And and you were clearly surprised. Well, I think one it's going to be a great evening on February the 16th. And we're looking forward to it. But I'd like I'd like for everyone to hear a little bit more about your story. So grew up and grew up in Hot Springs, right?
Eric Jackson 02:43
Grew up in Hot Springs. You know, at that time, you had to be 16 to get into the races. And since I was the wimpiest kid in my class, it took me forever. All the guys had gotten in and were bragging about it. All the girls had gotten in, were bragging about it. Every time I tried, they throw me back out. But that was my introduction to Oaklawn. And from there, it really was just an accidental career. But I've told everybody, and I'm sincere about this. I've had the most interesting job in Arkansas for over 40 years because of the the first the nature of the job, the sport, the thrill of victory and the agony of defeat. And it's a major tourism draw, major taxpayer, major employer. And quite frankly, the last 25 years it's been like the perils of Pauline nearly went out of business in the 90s picked ourselves up off the mat. And now we're one of the top racing centers in America and one of the top gaming centers in the South.
Brent Williams 02:43
Yeah. You know, and I know, you didn't do this alone, but but there's a lot I've read out there that really credits you or at least largely credits you with really some innovation, that that did save Oaklawn.
Eric Jackson 04:16
Well, you know, success has many fathers and failure is an orphan. And there can be a thin line between something working and you're ending up looking really stupid. But we were fortunate. You know, the first challenge to our survival came from Texas and Oklahoma when they put in brand new racetracks and that's where we were drawing most of our racing crowd from and not only new racetracks but the tax rate in those two states was one sixth what it was in Arkansas, so we really could not compete when it came to purses. And we came up with something called full card simulcasting merged pool wagering did that with Chicago probably in 1990. And, and it worked. And we were so busy congratulating ourselves and patting ourselves on the back that we didn't notice that Mississippi was putting in casinos. And we looked up one day Mississippi had casinos and then Missouri did and then Louisiana did. And then Oklahoma did. And at that point, we realized that Arkansas was surrounded by more casinos than any state in America and still is. And at that point, most everybody was predicting, Oaklawn wasn't going to make it. But we came up with an electronic wagering product, historic racing, instant racing, we were able to get a patent, didn't know if it's going to work or not, but we were several million dollars into development and we put it on the floor in the year 2000. And it worked. And at that point, Oaklawn started picking itself up off the mat, and getting back in the game.
Brent Williams 06:12
Okay. Well, we'll get back to that because I think that was kind of that was a real inflection point in the story, I think. So I want to go back to see growing up in in Hot Springs finally make your way into the track, fall into the job maybe to some extent, but kind of walk us through what that journey looked like, early on.
Eric Jackson 06:36
Well, early on, I teach a class at Oaklawn a management class for some of our new supervisors and managers and I tell them my my first true introduction, Oaklawn being the the wimpiest kid in the class, I finally get in. I'm so excited. Of course, the next you know rite of passage is to make a bet. And I go up to the mutual window to make a bet and they won't even take my money, they say get out of your kid. And I do that window after window and nobody will take my bet and I guess I finally found a mutual clerk who was nearsighted because he took my bet. And I won. And it was a horse name Tutor something. I think I won like $14 which was total blind luck but for you know, a kid like me 14 bucks was a lot of money. And then I went back to cash. Well, they wouldn't cash it for me, because I wasn't old enough to be betting. I don't know how long the tickets good for. I mean, I figure if they run another race, maybe I'm out of luck that I won't get my money. I am standing there. It's a busy Saturday. I'm Doogie Howser. I think I have tears rolling down my cheeks and a nice lady says are you okay? And I said no, I'm not. I have a winning ticket on the last race. I think it's getting ready to expire and they won't cash it. They say I'm not old enough. But they sold me the ticket. And she said well, that's not fair. She said I'm getting ready to go cash. Do you want me to cash it for you? And I said that would be great. I never saw her again. So my introduction to Oaklawn is I was able to sneak in under age, snuck in, made a bet, won the bet, got conned, and that was my introduction.
Brent Williams 08:30
What an entry.
Eric Jackson 08:31
Yes, absolutely.
Brent Williams 08:33
Well, how'd you end up working at Oaklawn originally?
Eric Jackson 08:37
Well, oddly enough in high school, I worked at nights through high school for the local newspaper, Sentinel Record. And of course, the racing season was a huge season in Hot Springs for the newspaper. So I actually would run back in those days, you know, run things out to the track, get photographs, run back to the newspaper, help set the stories that night and put them out in the morning. So I had some familiarity. But when we got out of college, and I say we it was Linda, who became my wife and I wanted to get married. We each had an opportunity to pursue an advanced degree. But hers was at SMU and mine was at Vanderbilt. And her dad made it very clear if we got married, I could start paying for everything and I couldn't. So we came up with a plan that she would go get her Master's at SMU in English literature and I would wait a couple, three years make a couple of dollars and then go to Vanderbilt and Vanderbilt was very accommodating. They said we will hold your place. And when you get here we will help your wife find a job in the Nashville school system. And I thought it was a great plan all of my professors at Hendrix told me I was making a serious mistake. Because they said after you've worked couple three years and made a couple of bucks, you won't go back. And I said, you don't know the sort of willpower I have. And I can now tell you 50 years later, every one of them was correct. And I know that resonates with you, because you did the exact thing. You went and worked for a while, and then you went back and got your masters and your PhD. So as I'm sitting here, I now realize you got a heck of a lot more willpower than I had. But during that time that I was trying to make a couple of dollars, we did get married, my wife started teaching in the Hot Springs school system. And I, I was a tennis player, not a very good one. But I played tennis. And I saw this nice older gentleman around the tennis courts of time or two. And I went up to him and introduced myself and I said, hey, you want to play a game? And he said, Yeah, I'd love to. So we did. His name was WT Bishop turned out he was the general manager of Oaklawn. Oaklawn had recruited him from Kentucky, extremely well known in American racing. And we just became friends. And he invited my wife and I over to dinner to to meet his wife, Dottie. So we had a bit of a social interaction. And then he called me one day out of the blue and said, why don't you come to work for us? And it was a surreal meeting. Everybody called him Bish. And I said, well, one thing is I don't know anything about horse racing. And he said, well, everybody starts out at that point. But you know, if you're capable of learning, you might like it. And we might like you, I went and talked to my good friend who was an attorney in Hot Springs, Clay Farrar, passed away a couple of years ago. And I said, Clay, what should I do? I mean, I'm trying to get to Vanderbilt, I'm not trying to work at the racetrack. And he said, You got to try it. And Linda was not in favor of it. And he went and talked to Linda, and he said, you've got to let him try it. It might lead to something and if it doesn't, go on over to Vanderbilt. So Mr. Bishop, and I shook hands on a six month agreement, one racing season. And he said, that'll give you enough time to see if you like it, and give us enough time to see if we like you. And that was golly 45 years ago. So it did work out. About six or seven years later, Mr. Bishop died unexpectedly. And I tell everyone, Oaklawn was a much smaller staff back then, since I was the only one who knew where the keys were they made me General Manager and been there ever since.
Brent Williams 13:07
Wow.
Eric Jackson 13:08
Yeah. Total accidental career, and nobody starts out to work at a race track.
Brent Williams 13:14
Well, it's a very interesting place to spend those years. You know, maybe tell us a little bit about kind of behind the scenes. What all what all does, one, I guess, managing that type of facility and enterprise entail? What are all the different pieces of the operation?
Eric Jackson 13:34
Well, interestingly enough, it is the oldest professional sports franchise in America, owned by the same owners, which is quite a heritage to begin with. But it's also iconic in Arkansas. Seemingly more so with each passing day. Back when I started, it was a major racing center. And that's what we thought our future would always be. You think this will never change. These are the good times they will always be the good times. And then you look up one day, and it's not the good times. You know, the old saying is, one day a rooster the next day a feather duster. That was us. But from a management standpoint, it evolved drastically. We went from being a basically a one trick pony, no pun intended, a thoroughbred racing center. And then we had to buy out our food and beverage caterer. But we did that in 2000s. Then we got into the food and beverage business. We then with simulcasting, basically, to some extent got into the technology business because we were beaming our signal by satellite to various places in North America and catching signals, merging the money. That became an entirely new business that nobody had been in, there wasn't a manual to go by. And then when we came up with instant racing, there had never been a product like that. We got a patent on it, and, and put it in play at Oaklawn. And we had to figure that that out as well. So we, internally, we just had a lot of things going on. Externally, we're one of the most regulated industries in Arkansas, and Arkansas, you know, being a small state. Politics is a very real part of what we did, and still do. And then on the other side of the equation are the people who own and race, the horses, the John Ed Anthony's and the Frank Fletcher's and the interaction with them now you're now you're talking about the sports angle. And making that interesting, keeping it fair, making it a challenge, and giving away a ton of money. So there are certain challenges with that. And then there's the customer. You know, the old saying, with racing, it's the only sport where the competitors are in the grandstand, because it's paramutual. I'm betting but if I win, I get your money. So that's, that's an entirely different dimension. Throw in the fact that we're in a small town and on a big Saturday, we need 1,500 employees. And that is enough challenge in and of itself. Instant racing works so well, that it led to what was called electronic games of skill. Legislature let us do that starting in 2005. And then, I guess it was 2008. Teen, there was an amendment on the ballot to allow us to become a full Casino. And immediately that put us in the hotel business, the spa business, the convention business. There aren't many businesses we're not in right now when it comes to tourism and hospitality. It's become quite a quite a Center for sports, for entertainment, for food and beverage, for meetings, for conventions, the spa, it's it's the only true racing and gaming resort in North America. So we're still making it up as we go along.
Brent Williams 17:39
Well quite aways from just being the guy that had the key or knew where the key was to, to what Oaklawn looks like today.
Eric Jackson 17:49
Well, it's I regret that Mr. Bishop still isn't around. I regret the Charles Sela died in 2017. Because he had Louis Sela's dad. He had been president of Oaklawn for 50 years, and basically, everything we had worked for, he got us to the one yard line. And then he died. So he hasn't seen the hotel, he didn't see the spa and the meeting rooms. He didn't see us giving away a million dollars a day in purse money. When we open up in three weeks, two and a half weeks. It's it's the richest racing season in North America right now. And who would have thought that back in the 1990s when everybody was predicting we were gonna go out of business? So yeah, I regret that a lot of the people that helped us get to this point didn't stay around to see it.
Brent Williams 18:48
You know, one thing I find intriguing about the story, particularly, you know, we were talking about the inflection point was that the the innovation was related to technology. And you don't necessarily have a technology background, but somehow you saw technology as as the key to the innovation. Is that is that fair?
Eric Jackson 19:08
It is, but America was changing. I mean, you had the Nintendo generation growing up and and what America was consuming and wanted to consume is not what we were selling. So we had to change. The first significant change was simulcasting. We had all beamed a race or two to another track and they would wager on that race there like the Kentucky Derby. But we wanted to do an entire racing season if you will. And the key to that we felt is if you were standing at Oaklawn and betting on a race in Chicago. You needed to be in their wagering pool where you would be in a pool with 1000s of other customers and not in a pool at Oaklawn with a very limited number and then coming up with way to make that happen was a challenge. We sat down with the it's called the total asaer company. It's all of our wagers are processed by an independent company through a total asaer, fancy name for a computer. But being able to do that across state lines, and being able to catch their signal, and making it happen simultaneously, became the real challenge. We sat down with, probably Southwestern Bell at the time might have been AT&T, I invited them to a meeting. We had the total asaer company, we told them what we wanted to do. They worked on it and came back. And they said, we've got it. And I said, great, how's it going to work? And they said, well, you walk up to the window at Oaklawn, and you say, give me $2 on the three horse. And then seven seconds later, you get a ticket. And I said, that'll never work. You can't. People are lined up behind me that just you can't have a seven second pause. And they said, well, we're we're sending the bet electronically up to a satellite. This is relatively new for satellites even. And then we're going to beam it down to Chicago where they will catch it and they will process it and their paramutual system there. And then they will shoot it back up to the satellite, catch it at Oaklawn and confirm you have the bet and I said it just won't work. So we were thinking high tech, the way we resolved it is we basically ran a phone line from Hot Springs to Chicago. So it wasn't quite the technology there that everybody thought it was. It was a dedicated phone line from Hot Springs, Arkansas to Chicago. And each day we prayed that Farmer Jones wouldn't accidentally with his backhoe, cut this phone line because we would flat be out of business. Now it did get more sophisticated as time went on, but that is how simulcasting in America got started.
Brent Williams 22:11
How interesting.
Eric Jackson 22:12
So not as high tech as you would think. Running cable. Instant racing was different. Instant racing, I felt strongly that we had to have an electronic wagering product to compete with Mississippi, Missouri, Louisiana, and Oklahoma. The problem is, the Constitution in Arkansas said there can be no games of chance. Well, a slot machine chance, roulette is total chance. So we were stopped before we can even think about going down that path. But we were allowed to have paramutual wagering on racing. And it it occurred to me perhaps there was a way we could make that look and sound and feel and play like a slot machine. And I fiddled with this idea for a couple of years. I actually went out and bought a couple of textbooks on statistics and probability, wishing at the time that I had paid more attention in college when I took those courses. But actually came up with an idea and this is a cute story. So I, two things. Gaming was the expansion of gaming in America was brand new in the 90s brand new. Up until then, it had basically only been in Atlantic City in Nevada. So I started tracking and keeping data on the expansion of gaming in America. Nobody else was at that time. It was me and an economist at the University of Kentucky called thing his name was Richard Dollheimer. And so I was keeping up with it, but I I wasn't translating that into what can we do at Oaklawn and then that probably was the genesis for the idea of to see if there was a way to take paramutual wagering and make it into a slot like experience. Well, I had actually since I was tracking gaming in America and spreading some of that information around I was I was actually getting to speak at some conferences. And I there was an organization called Nickel G's, which was National Association of Legislators from Gaming States. And I spoke to them a time or two. And then when I had this idea, I invited three companies to come to my office, three national companies, so I could explain my idea what I wanted to do with historic racing. And all three came I had met him at various conferences. One was IGT, a huge gaming company. One was American Total Asaer, which we did business with, and I have forgotten the other one. But they came to Oaklawn one at a time. This is a true story. One at a time, I explained my idea what a great idea this was, how successful it would be. And one at a time, they told me it was the dumbest idea they had ever heard of, that 100 people have tried to make an electronic game out of instant racing, and out of out of paramutual racing, and they had all failed. And they said, we can't believe we flew all the way across the country to hear stuff, such a stupid idea. And they all laughed. And I crawled under my desk for about a week, and just really was so embarrassed. But then I got to think about it. I said, you know, is it a bad idea? Or did you do a bad, did you do a bad way of talking about it? Maybe the failure was how you presented it, not the idea. So I went to CJRW here in Little Rock, which was our ad agency. And I told them, I needed an artist, and they had to sign a nondisclosure agreement. And they did and they gave me an artist. And I drew up a bunch of, I, the artists drew up a bunch of poster boards, how this might work. And I invited the three companies to come back, it took us about a year. Two of them wouldn't come back, they said please just lose my number to quit calling. The third one came back. And I said, Listen, I listened to what you said when you were here. And and we've tweaked and I made some changes. And I started pulling out my you know, poster boards. And I said, this is what it would look like. And this is how it would work. And here's the central processing units and all of that. And the gentleman said, you know, you may have something now. Well, actually, we hadn't changed the thing. It's the old saying a picture's worth 1000 words.
Brent Williams 27:16
Yeah.
Eric Jackson 27:16
So the failure was mine the first time and how I presented it, not in the idea. And he offered to put together a think tank in Baltimore, with some programmers, a mathematician, couple of regulators. And we went up and made a presentation to this group. We walked in the room about six o'clock that night, I had all my poster boards, and took the entire group through the presentation. And there was total silence. And I said, I think I've done it again, except now I can't get under the desk. I'm stuck here. And there was a gentleman there from MIT, a math guy. And someone said, you know, this really won't work. And he said, I think it might. And he threw out an idea or two. And the room just lit up. We worked for 36 hours straight.
Brent Williams 28:19
Really?
Eric Jackson 28:20
36 hours straight. We were actually on a place called Parsons Island, which is out in the Chesapeake Bay. It's an old hunting camp or something. And when we got done, and we said, look, we think we've got something, we're going to have to get a patent. I have to raise venture capital to get it going. What are we going to call it? And so since several guys were old hippies and there was a group called the Parsons Island Project, I think back in the 70s. We said we're going to call it the Parsons Island Project for right now PIP. And I tell people at Oaklawn today, one of these days, you'll be digging in an old file and you'll find a PIP file. That was us. The Parsons Island Project, and that's how I got going. We came back and applied for a patent. Got it. And then we had to come up with with money to see if this work. I ended up working with a PhD probablist in Louisiana and I didn't even know there was such a thing. And he quickly said, Well, you need a game designer. And the guy you want is in Montana. And I flew up there. I think it was on an Easter Sunday. And there's a reason that people live in Montana it's because they don't want to be around any other people. And we picked him up hired him as a consultant. But he just didn't like people but he was very good at what he did. But it was a very strange relationship. But he got us going. So between the PhD probablist in Louisiana and this game designer in Montana, we launched and it worked.
Brent Williams 30:11
How interesting what a what a story of, I don't know, just innovative thinking bit of an entrepreneurial spirit, probably some, you know, you just had to figure out a way to survive all mixed in one.
Eric Jackson 30:25
Well, we had to come back we had to get we had to get regulatory approval in Arkansas, because of the Freedom of Information Laws, two racing commissioners cannot meet together at the same time and talk about, you know, what should come before the Commission. So we built a prototype, which we called Big Bertha, because it was not pretty and it was big. And so I would put it in the back of my SUV and drive it to each of the racing commissioners so I could show him what we were talking about, because if they weren't going to approve it, we couldn't move forward. The chairman of the racing commission was Cecil Alexander, and they realized the dire straits that Oaklawn was in. And they, they all said you've got to proceed. But then we had to talk with the horsemen. Same thing, we met with a gentleman named Bill Wamsley used to be in the Senate retired now he was headed the Horseman's Organization, a really fine gentleman. And I remember his words, I showed it to Bill and he said, I don't know that this is going to work. But he said, I don't see where you have any choice, because if you don't come up with something, Oaklawn is going out of business. And with that sort of encouragement, we proceeded a little bit of humor, we put it on the floor on January 1, 2000. And we invited a lot of customers in to play it, and they were having a great time. All day, I'd go up there, and everybody was just having a wonderful time. And I said, man, this is going great. I'm just I'm so excited. At the end of the day, I went up to our accounting department to see how we'd done, we lost $10,000. Everybody was winning. That's why everybody was having a waterfall. I had made a tiny little mistake in one of my computations that we had to correct. But yeah, I mean, I play it all day long too. You put in $1 get back $1.20. This is great. But we did launch it like that and never looked back.
Brent Williams 32:40
Well, Eric quite a quite a career and story at Oaklawn in Arkansas. And so maybe I'll conclude I've got a question for you just as you process what it means to be in the Arkansas Business Hall of Fame. What does it mean, I guess, for you to spend your career at Oaklawn in Arkansas, and then to be a part of this institution, the Arkansas Business Hall of Fame?
Eric Jackson 33:08
Well, I've looked at the names of the previous inductees. And there's something seriously wrong with this picture. I mean, I you know, you, you don't put the name Sam Walton and Eric Jackson side by side, I'm sorry, you just don't. So I haven't completely processed this even now. I keep thinking this is a dream, and I'm gonna wake up and it didn't happen, or you're going to call me and say, Eric, we've made a terrible mistake. But it is what it is I could never have imagined. But the real. The real pleasure for me is seeing what Oaklawn has become. And when you look behind the curtain, seeing the faces and the names of all the people that helped us get to this point. Thousands of employees over the years, but a dozen key employees that kept the faith in the 1990s and then hopped on for the ride that we had, and the 00's and the 10's. And that to me is that has been the greatest satisfaction of my career. And the fact that it all worked, you know, there's a thin line between success and failure. And we we were fortunate on this.
Brent Williams 34:31
Well, I certainly agree. And once again, congratulations, I really look forward to the evening of Friday, February the 16th and getting to celebrate you and the other inductees.
Eric Jackson 34:45
Looking forward to it. And I still think between now and then I might wake up and the whole thing was a dream.
Brent Williams 34:51
I don't think that'll be true. I'll see you then.
Eric Jackson 34:55
Alright.
Brent Williams 34:56
On behalf of the Walton College. Thank you for joining us for this captivating conversation. To stay connected and never miss an episode, simply search for Be Epic on your preferred podcast service
Brent D. Williams is the Dean of the Sam M. Walton College of Business at the University of Arkansas.
With a deep commitment to fostering excellence in business education and thought leadership,
Dr. Williams brings a wealth of experience to his role, shaping the future of the
college and its impact on students and the business community.
