Illinois Racing Board grants Arlington’s race dates in 2020, but still presses for track to add casino gaming

Chicago Tribune Finance 1 month ago

The Illinois Racing Board voted unanimously Tuesday to allow horse racing at Arlington International Racecourse next year, despite the decision by the track’s owner, Churchill Downs, not to apply for a casino license at the facility.

Racing officials, who had threatened last week not to grant the 68 racing dates Arlington had applied for in 2020, made it clear they still wanted to see casino gaming at the state’s flagship thoroughbred racetrack. But they weren’t ready to abruptly disrupt the racing schedule — at least for now.

“We need time to figure this out,” Brad Blackwell, senior vice president and general counsel for Churchill Downs, told the board before a meeting room packed with horsemen, racing executives and dozens of other attendees at the Thompson Center Tuesday.

Churchill Downs, the Louisville, Ky.-based casino and racetrack owner that bought Arlington in 2000 and also owns a majority interest in Rivers Casino in Des Plaines, announced plans last month to apply for a sports betting license for the racetrack under Illinois’ new gambling expansion law. The company decided to pass on adding casino gaming stations.

While horse racing interests in Illinois have long lobbied for casino gambling at racetracks as way to boost purses and better compete against other forms of gambling, the requirement that Arlington pay as much as 20% more in taxes on gaming revenues than existing casinos to fund horse racing purses makes the so-called “racino” financially untenable, Churchill Downs executives said.

“It makes it pretty hard to be able to compete when you have a 20% higher tax rate,” Arlington Park President Tony Petrillo said after the meeting.

Petrillo, testifying before the board Tuesday, implored it to grant the racing dates to preserve more than 2,300 full-, part-time and seasonal jobs, as well as the revenue generated for northwest suburbs where the track is located.

“Closing this crown jewel of premier thoroughbred racing in Illinois would not only negatively impact the economy and entertainment climate of the northwest would also be a black eye for the image of the racing industry in Illinois,” Petrillo said. “Such a decision would bring much negative attention to the Illinois Racing Board.”

Arlington racetrack, which opened in 1927, signaled last month it would consider “longer-term alternatives” after the 2021 racing season, including relocating from its home in northwest suburban Arlington Heights.

At the racing board’s meeting week, board chairman Jeffrey Brincat said regulators were concerned that Churchill Downs would not commit to horse racing at Arlington beyond 2021. The board also said Arlington had an obligation to seek the casino license to help keep the horse racing industry alive.

On Tuesday, Brincat struck a more conciliatory tone in giving Churchill Downs more time to get on board with a casino at the race track.

“The gaming bill recently passed is a rising tide that we anticipate will lift all Illinois horse racing boats,” Brincat said. “But it would be unrealistic to think that those boats will rise at the same pace or in exactly in the same manner.”

In addition to Arlington, the board also granted racing dates to Hawthorne Race Course in Stickney, Fairmount Park in downstate Collinsville and Playing in the Park, which is planning to open a new harness racing track and racino in Tinley Park.

Gov. J.B. Pritzker signed the Illinois Gaming Act into law in late June, looking to bring in an additional $350 million in annual state revenue, and opening the door to sports wagering and other growth opportunities for gambling operators. Under the law, Churchill Downs had the right to add up to 1,200 casino gaming positions, such as slot machines, at Arlington.

Arlington has hosted some of the biggest names in horse racing over the years, with its latter-day fortunes guided by Dick Duchossois, who bought the racetrack in 1983. When Arlington was destroyed by a raging fire in 1985, Duchossois rebuilt it at an estimated cost of $200 million, only to shut down in 1998 and 1999 to protest nascent riverboat gambling in the state, which cut into the racetrack’s revenues.

Churchill Downs bought Arlington in 2000 for a reported $71 million, with Duchossois getting a stake in the company.

Duchossois, who attended the meeting Tuesday, said he expected Churchill to eventually add casino gambling at Arlington.

“I believe they will, but that decision is not mine to make,” Duchossois said. “I have 100% confidence in Churchill’s management, and I say that as the largest stockholder.”

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