Gambling expansion bill, welcomed by racing interests, passes Illinois Senate

A massive gambling expansion bill that could cast a lifeline to the state’s ailing racing industry sailed through the Illinois Senate on Sunday after easily passing the House of Representatives on Saturday evening.

The bill, SB690, now goes to governor J.B. Pritzker, who has signaled a willingness to sign it into law, though it could take weeks for Pritzker to act on the legislation.

The bill would allow Arlington and Hawthorne in the Chicago area to operate up to 1,200 slot machines, to conduct table gaming, and to take bets on sporting events. Fairmount Park near St. Louis in Southern Illinois could have up to 900 gaming positions and conduct sports betting.

The legislation also would end the practice known as recapture whereby tracks deduct a considerable percentage of handle that would otherwise go to purses, a unique circumstance nationally that came into being when track operators resisted a law change that permitted full-card simulcasting in Illinois. Hawthorne and Arlington took about $7.2 million in recapture funds out of Thoroughbred purse accounts in 2018. Recapture would end the year after racetrack casinos began operating.

No revenue from sports betting would go to racing purses but the Illinois Thoroughbred Horsemen’s Association, which represents horsemen at Hawthorne and Arlington, estimated that if tracks maximize the casino opportunities offered in the legislation, purses at the Chicago-area tracks could more than double their current level and rise to $40 million or $50 million annually.

“This was a great weekend for Illinois horseracing,” said David McCaffrey, executive director of the ITHA. “It will take some time for the benefits to be realized, but the gaming bill’s passage provides the basis for a very bright future.”

The bill would also allow a new harness track to be built in one of seven townships located within Cook county, which includes Chicago and both Northern Illinois tracks. The new venue couldn’t be situated within 35 miles of either existing racing facility without the track granting permission. Two Standarbred tracks, Maywood and Balmoral, have closed in recent years and Hawthorne’s summer harness season is the only such meeting, other than fair tracks, left in Illinois.

Illinois racing interests for years have lobbied state government for a gambling expansion bill that would permit them to operate racinos and level the playing field with adjacent states that offer purses subsidized by casino revenue. Such a bill passed both legislative chambers in 2012 but was vetoed by governor Pat Quinn.

“I’m thrilled, and I think it’s been 20 years in the making,” said Hawthorne president Tim Carey. “It’s been difficult to see all the states around us build their racing industry while we were just standing on the sidelines.”

Carey said Hawthorne would apply for the maximum 1,200 gaming positions available to them in the legislation. Further, he said the law would allow Hawthorne to increase that total if Arlington declined to accept the full complement of positions. Carey said consideration had been given to razing the existing Hawthorne grandstand and constructing an entirely new building, but that approach has been rejected in favor of gut-rehabilitating Hawthorne’s current edifice Carey said Hawthorne could have sports betting ready for the 2019-20 National Football League season and some sort of casino functional by the summer of 2020.

Hawthorne sits in the village of Stickney, just southwest of Chicago proper, and is owned by the Carey family, while Arlington, in the northwest suburb of Arlington Heights, is owned by Churchill Downs Inc. CDI has a majority interest in Rivers Casino, the state’s largest casino which is situated about 13 miles away from the track, and it’s unclear how the company would react if this bill, long awaited by many, is signed into law.

“We are grateful for all the heavy lifting of all the members of the legislature to get us here,” Arlington president Tony Petrillo said in a text message. “We are in the midst of the whirlwind, combing through 900 pages of the gaming bill to understand the details and what actions to take and when.”

This bill would allow several new casinos and bring about a long-awaited major venue within Chicago city limits. Sports betting would proliferate statewide if the legislation passes.

The new legislation stipulates minimum racing dates for tracks that take on a casino license. If one casino license is issued to a Chicago track, that venue must run 110 days the year it’s awarded, 115 the following year, and 120 per year thereafter. If two casino licenses are issued to Chicago tracks those numbers rise to 139, 160, and 174. Fairmount would be required to run at least 700 races per year if it receives a gaming license. The legislation also boosts purse awards for Illinois-breds and awards paid to the state’s breeders.

Racetracks would be required to pay between 12.75 and 20.5 percent of adjusted gross receipts, depending on total revenue generated, from casino functions into purse accounts. In addition to considerable general licensing fees for applicants, fees of $30,000 inside Cook County and $17,500 outside it are required per gaming position. An entity issued a gaming license must reserve its position within 30 days of the bill’s adoption date or submit a written request seeking an extension.