09/24/2013 3:58PM

Illinois Racing Board budget deficit threatens 2014 season


CHICAGO – Budgetary problems within the Illinois Racing Board could lead to a drastic reduction in racing dates next year, and the 2014 schedule the board approved by an 8-1 vote Tuesday in Chicago is contingent upon their resolution. The board says it lacks the money to properly administer a typical Illinois racing season – supplying veterinarians and stewards, running the testing laboratory – and in a worst-case scenario their financial plight could lead to a 185-day reduction in racing dates from 2013.

The board depends on account-wagering handle for part of its funding and lost about $725,000 when the law permitting account-wagering companies to operate in Illinois was allowed to expire Jan. 31 and wasn’t restored until June 7. Unaltered, the law expires again on Jan. 31, so the board can’t know if it will have enough money to fulfill its statutory obligations for a full racing season. The board will request a supplemental payment from the state to plug the hole left by the 2013 account-wagering shutdown, and the legislature, when it meets for a fall session starting Oct. 22, will be asked to extend the account-wagering law. How racing is conducted next year in Illinois depends on how much of that money actually flows to the IRB. Because of the uncertainty the board approved four possible schedules.

In the best-case scenario, Schedule 1, the legislature would approve supplemental funding and extend the account-wagering law. That would trigger a schedule similar to this year’s: Arlington would have 89 races days, from April 28 to Sept. 30, and 90 days where they’re the dark-day simulcast host, reaping the benefits of local players betting distant signals. Hawthorne would have 100 race days – Feb. 21 to April 27 in the spring, and Oct. 1 to Dec 31 in the fall and winter – and 86 dark-host days. Downstate Fairmount Park would race 52 days.

Schedule 2 is triggered if the legislature extends account wagering but does not approve a supplemental payment. This scenario would alter Hawthorne’s season: The track would go dark from Nov. 16 to Dec. 12, reducing their race days to 81 and increasing their dark-host days to 110. Arlington’s season would remain similar – 89 live days and 85 dark-host – and Fairmount would run 52 cards.

Schedule 3, triggered if the state approves a supplemental payment but account wagering is not renewed, would lead to major changes: Arlington would race 68 days, running three-day weeks from May through September while Hawthorne would have only 50 racing days, and Fairmount 19.

Schedule 4 would be applied if there is no supplemental payment to the board and the account-wagering law isn’t renewed, and this would all but crush Illinois racing. Arlington would have only a 49-day meet, ending Aug. 20; Hawthorne would race only 15 days, Fairmount 10 days. There would be only 13 days of harness racing anywhere in Chicago.

On the face of things, it seems highly unlikely the legislature would allow such massive change to take place, but the political landscape in Illinois is volatile and complicated. Legislation that would permit tracks to operate slot parlors stalled again this year in the legislature, and last winter, many thought the government wouldn’t allow the account-wagering law to expire.

Part of the reason account wagering ceased this year is competing visions of the law. Arlington Park is part of Churchill Downs Inc., which has its own account-wagering platform. Arlington likes the current law and would like to see it enacted “in perpetuity,” according to general manager Tony Petrillo. Hawthorne, harness-track owners, and the state’s horsemen have lobbied to change the law to distribute money taken from account-wagering handle in a manner more beneficial to them.

“I don’t think we’ll see one of the worst-case scenarios,” Hawthorne president Tim Carey said. “At a minimum, we’re going to get [account wagering] done in the fall.”

Arlington, however, is unhappy even with the best-case scenario. The track lost 17 dark-host days from 2012 to 2013 and will gain none of them back in 2014 regardless of which schedule is employed.

“I don’t know how long we can keep coming to our board and asking to keep operating this property,” Petrillo said. “We’re not seeing the revenue opportunities come back to us.”

The passage of legislation permitting racetrack slot machines would instantly salve all these wounds, but the legislature and Gov. Pat Quinn have insisted gambling expansion won’t go anywhere until the incredibly thorny issue of pension reform is resolved.

“Everything’s in the hands of the legislature now,” Petrillo said, though one can bet that legislators will be hearing plenty from racing interests this fall.