12/16/2015 2:53PM

Harness: Balmoral, Maywood remain in the simulcasting business

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Balmoral Park and Maywood Park appear to be dying a slow death.

The Illinois Racing Board denied the bankrupt sister tracks racing dates when it drafted the 2016 schedule in September but at its December meeting on Tuesday awarded each of them 2016 inter-track licenses and licensed the three off-track betting parlors operated by Balmoral and the six operated by Maywood.

“Statutorily we can keep them open for a year—the question (of how long they stay open) becomes one of financial ability (to fund operations),” Randy Olech, Balmoral/Maywood’s chief financial officer, told Daily Racing Form.

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Meanwhile, the tracks’ principal owner, the Johnston family, is continuing to try to auction the tracks that were hammered by a $77.8 million judgement awarded to the state’s four most lucrative riverboat casinos late last year by the U.S. 7th Circuit Court of Appeals.

An auction that was not open to the public was held on Monday in the offices of the tracks’ bankruptcy law firm, Adelman and Gettleman, Ltd.  A partner in the firm, Nathan Rugg, told the Racing Board there were only three bids and just one qualified, a $1 million offer by PCI Holdings, a firm representing Chicago circuit standardbred owner and businessman John Barnard.

“We will use that as a stalking horse offer to set a floor and we will solicit further offers until Dec. 28,” Rugg said.

According to Maywood President and Balmoral vice-president Duke Johnston, “It’s a fairly fluid situation. It is still possible we can get offers for Balmoral and Maywood, for Maywood only and for Balmoral only.

“The lease (with the Galt family trust) for Maywood cannot extend beyond Dec. 31. We have been told that there will not be a further extension without operations in 2016.”

Maywood, the track that introduced pari-mutuel wagering on standardbreds in Illinois in 1946, shut down on Oct. 2, two months earlier than scheduled. Balmoral continued its year-round racing schedule and its meeting will end on Dec. 26.

If a buyer is found for one or both tracks, the current owners would be able to continue running the operation until the new owner was licensed by the Racing Board.

The $77.8 million judgement against the tracks stems from allegations that currently imprisoned former Governor Rod Blagojevich signed a casino impact fee extension in return for a $100,000 campaign contribution from Balmoral president and Maywood vice-president John Johnston.

The impact fee was levied from 2006-2008 because the two Chicago area harness tracks and two thoroughbred tracks did not receive the subsidy from the transfer of a dormant riverboat casino license to north suburban Chicago that was contained in the 1999 legislation eliminating a cruising requirement and allowed existing casinos to conduct dockside gaming.

Federal investigators taped a phone conversation between John Johnston and an aide to Blagojevich in which the track owner urged that the governor sign the extension bill that had passed the House and Senate and was a replica of the bill benefiting the four racetracks that had just expired.

The aide responded by asking for the $100,000 campaign contribution and Johnston allegedly agreed.

Blagojevich subsequently signed the bill but the contribution was never made.

Balmoral and Maywood have appealed the 7th Circuit Court of Appeals verdict to a higher court and oral arguments are scheduled to be heard on Jan. 13.

However, as a consequence of the uncertainty that surrounded the tracks’ status in September when they applied for a combined total of 104 nights of Friday and Saturday racing in 2016, their applications were rejected by the Racing Board and Hawthorne Race Course was awarded harness dates consisting of a Jan. 6-Feb. 6 meeting and a May 6-Sept. 25 meeting.

State Senator Toi Hutchinson and State Rep. Thaddeus Jones, whose districts include Balmoral, are proposing legislation that would alter the Racing Board dates order and award both Balmoral and Maywood at least 30 days of racing next year.

However, the General Assembly won’t reconvene until late January and the plight of the racetracks is overshadowed by the prolonged power-struggle pitting new Governor Bruce Rauner, a Republican, against the Democrats who are the speakers of the House and Senate.