05/10/2010 11:00PM

With slots bill pending, Arlington looks ahead


ARLINGTON HEIGHTS, Ill. - Arlington Park could continue limping forward, its future uncertain, if the Illinois state legislature doesn't pass legislation bringing electronic gaming to the state's racetracks. Or, if gaming at tracks is legalized, Arlington could become a suburban Chicago entertainment hub with a horse racing purse structure more than double that currently offered.

So said Arlington's president, Roy Arnold, this past weekend, two days after the Illinois legislature completed its regularly scheduled spring session without voting on a bill that would permit gaming at racetracks. The legislature, however, closed the session without fully addressing urgent budgetary matters, and is expected to reconvene before the end of May.

When that happens, racing interests hope that their bill, SB3146, will come up for a vote after passing out of a House executive committee late last week.

"We have the bill perfectly positioned as far as process," said Bob Molaro, a racing lobbyist who served in the Illinois House of Representatives until 2008. "We could pass this bill in two legislative days."

It's believed the gaming-at-tracks bill would pass the House, but its status in the Senate is more tenuous. Several senators whose districts have riverboat casinos oppose the bill, and leadership in that body might not allow the bill to come up for a vote.

"The rank and file understand the bill," Molaro said. "They know whether they can vote for it or not. It's a handful of senators in leadership positions looking at the political and budgetary landscape."

The bill would permit Chicago tracks to install up to 1,200 gaming positions each, and allow downstate Fairmount Park 900 machines. Racing interests are lobbying for the bill as a means of producing revenue for the cash-strapped state, claiming that up-front licensing fees could quickly generate $150 million.

Should the bill become law, Arlington would quickly act to transform its facility, Arnold said.

"Gaming itself can be successful" said Arnold, "but if we want to truly make it maximally effective competing in the marketplace, I think we're going to need a couple other components. We've been updating studies that have already been done, and they're indicating that we need to consider having some additional upscale food and beverage opportunities in addition to the traditional casino buffet. Also, we'd be considering selective retail, as well as an entertainment venue."

Arlington Park is owned by Churchill Downs Inc., which has slots at two of its other properties, Fair Grounds in New Orleans and Calder in south Florida.

Arnold said Arlington has in place "an architectural plan to renovate the second and third floor of the existing grandstand, not for gaming, but for a year-round intertrack facility." Once that work was done, the Trackside intertrack wagering venue located beyond Arlington's racing oval would be closed and remodeled as a temporary gaming facility that would probably "be up and running before opening day in 2011," Arnold said. A permanent gaming facility could be completed within 1 1/2 years.

Conservative estimates, Arnold said, suggest gaming at Arlington could produce adjusted gross revenue of $125 to $150 million annually. Using those projections, and adding money to the purse structure through the elimination of recapture - a state-sanctioned practice whereby tracks deduct money from the purse account each year - Arlington's overnight purses excluding stakes races could leap from a daily average around $205,000 to more than $450,000 per day.

Or not. Illinois racing has been down the slots-at-track path every legislative spring for several years, and no one would be surprised if the tracks are turned away again. If that's the case, Arlington, which remains a profitable business, Arnold said, won't just disappear. But a future without gaming looks much gloomier to Arlington.

"If gaming dies, my expectation is that we will lose two or three tracks in the next 24 months," he said. "I'm doubtful that the smaller tracks can survive, and I have questions about Arlington's ability to survive."