The Illinois Racing Board backed down from what turned out to be empty threats to deny live racing dates to Arlington Park in 2020 after the track's parent company, Churchill Downs Inc., said it would not seek a casino license at the suburban Chicago racetrack.
One week after kicking the can down the road and asking its former executive director, Marc Laino, to head a three-person committee charged with trying to twist the arm of Churchill Downs Inc.'s management on the casino license issue, the IRB on Tuesday cried “uncle” and awarded all of the Thoroughbred and Standardbred racing dates that were requested in 2020 by Arlington Park, Hawthorne, Fairmount Park and Party in the Park, a new entity building a harness racetrack and casino in Tinley Park.
The board voted 9-0 to approve the dates that include a 68-day live meet at Arlington from April 27-Sept. 30; Hawthorne from Oct. 2-Dec. 26; and Fairmount Park from March 3-September 7. Harness racing dates were approved at Hawthorne from Feb. 15-Sept. 20 and at the new Tinley Park track from Dec. 6-29.
Hawthorne and Fairmount are adding casinos to their premises (resulting in no winter-spring dates at Hawthorne) while the new harness track construction timeline has not been set.
Mike Campbell, president of the Illinois Thoroughbred Horsemen's Association said he was “deeply disappointed” by Churchill Downs Inc.'s intransigence on the issue of a casino at Arlington Park. “The gaming bill was passed with consideration of the racetracks only because of the horse racing industry,” said Campbell. “You mean to tell me that Churchill cannot implement their license at Arlington Park, but since the bill passed they can try to acquire another license in Waukegan? It's supposed to be about the horse industry. Evidently they (Churchill Downs Inc.) don't want to share a significant portion of earnings to the purse account. It's just outrageous at every level.”
Laino told the board that, despite a series of discussions with Churchill Downs Inc.'s representatives he said were both “productive” and “disheartening,” the company's position remained unchanged. Tony Petrillo, president of Arlington Park and senior vice president of Churchill Downs Inc., testified alongside Brad Blackwell, senior vice president and general counsel for Churchill Downs Inc. Neither went into details about why – after seeking racetrack casino gaming for decades – the decision was made not to pursue a casino license after a gaming bill was passed by the General Assembly in June.
“We have publicly stated that there are issues with the gaming bill that would be problematic for us opening a facility responsibly at Arlington Park,” said Blackwell.
Petrillo read a lengthy statement and introduced several longtime Arlington employees attending the meeting (along with Richard Duchossois, who sold the track in a stock deal with Churchill Downs Inc. in 2000), stating that denial of 2020 racing dates would result in thousands of immediate job losses.
Blackwell tried to clean up a press release from Churchill Downs Inc. that said a casino license would not be sought but that Arlington plans to race and offering newly approved sports betting at the track in 2020 and 2021, leaving many with the impression there were just two years of racing remaining there. While not committing to racing at Arlington beyond 2021, Blackwell stated Churchill Downs never specifically said it would not.
Blackwell fielded questions from commissioners, at least two of whom – Thomas McCauley, general counsel at Arlington when Richard Duchossois bought out his partners in the track in the 1980s, and downstate attorney Gregory Sronce – pushed hard trying to understand Churchill Downs Inc.'s intentions.
McCauley, who roughed up Petrillo in last week's IRB meeting, attempted to pierce the corporate shield of the publicly traded Kentucky-based company, asking Blackwell whether there have been high-level discussions about a possible sale of Arlington Park or the real estate it sits on.
“Commissioner McCauley,” Blackwell responded, “if your line of questions are to breach the confidence that are in management meetings or board of director meetings, we can not address any of those. We can only speak to what we've said publicly and about our commitment to find a solution.”
Blackwell was then asked by McCauley if there was a non-compete clause in Churchill Downs Inc.'s 2018 agreement to purchase majority interest in the Rivers Casino, located 11 miles from Arlington in Des Plaines and the most successful casino in Illinois, as measured by attendance and revenue. Blackwell said he was “not aware” of any such provision.
McCauley then asked Blackwell if the company planned to lobby for changes to the gaming bill in upcoming legislative sessions.
“We cannot speak about our legislative strategy here,” Blackwell responded. “Again, that would be irresponsible and jeopardize or prejudice those efforts.”
Blackwell elicited groans from horse owners and breeders in the audience when he gave a non-answer to McCauley, who asked if higher purses would be in the best interest of Illinois racing.
“I can't go into detail what's in the best interest of Illinois racing,” he said, adding that higher purses are “certainly positive.”
Sronce drew parallels with an issue coming before the Kentucky Horse Racing Commission involving Turfway Park – owned by the same company that owns a large casino in neighboring Cincinnati, Ohio. Turfway has dragged its feet putting in historical horse racing machines, leading to speculation its owners are trying to “protect” their casino market. Churchill recently announced plans to seek a license for racing and historical horse racing machines at an unnamed northern Kentucky location that would compete with Turfway.
There were also questions from McCauley about the millions of dollars in “recapture” money that Arlington takes out of horsemen's purses annually. Those funds started going to the tracks by law after full card simulcasting began in Illinois and are based on the difference between annual handle and a benchmark number from 1994. Petrillo estimated Arlington will get between $4.2 million and $4.4 million in 2020.
Short of getting revenue into purses from an Arlington casino, the ITHA's Campbell was hoping money from recapture could be diverted to help the falling purse structure, which fell from $180,000 a day in 2018 to $140,000 in 2019.
“A good outcome would have been for Churchill Downs to say, 'Look, we've rethought our position. Even though we are not willing to put in 1,200 (gaming) positions, we're willing to put in 600, and that will help the purse account.' Two-hundred, three-hundred, any number would help. That would have made some sense. Or for next year, they could have deferred the recapture and for the purposes of one year put the Secretariat, Beverly D and the Million on hold and put that money back in the purse account. Right now, our projections are we will be racing for way less than this year.”
But at least they will be racing. And that's why McCauley and Sronce voted along with the other IRB members to award 2020 dates to Arlington. For now, there is no alternative. IRB chairman Jeffrey Brincat expressed his unhappiness over the decision not to put a casino at Arlington Park, but the IRB found itself in an untenable position.
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