Illinois horsemen, Arlington management still at loggerheads

CHICAGO – Tuesday’s tumultuous January meeting of the Illinois Racing Board had an appropriate site - the James Thompson Center in Chicago. A movement is afoot to raze the architecturally significant and historic Thompson Center for retail or commercial development. The dark mood pervading Tuesday’s meeting expressed the widespread concerns that something similar could happen at historic Arlington International Racecourse.

A large chunk of the 3 ½-hour meeting centered on a contract dispute between Arlington and the Illinois Thoroughbred Horsemen’s Association. The Illinois Horseracing Act was revised last year with the passage of gambling expansion to require racetrack operators and a representative horsemen’s group to sign a contract by the beginning of a calendar year in which a race meeting will be conducted. The contract stipulates that at least 5 percent of revenue earned for purses will be diverted to fund the horsemen’s group, which then partners with the track to conduct the meet.

Contract negotiations between the ITHA and Arlington hit an impasse before the end of 2019 with the horsemen asking Arlington to pay $200,000 in overnight purses per day in 2020. Overnight purses were about $151,000 per day in 2019 but the ITHA projects overnight purses this year will be $125,000 to $130,000 per day. Arlington president Tony Petrillo said Arlington projects it will pay $142,000 per day in overnight purses during 2020, but even that is below what the ITHA says is required to maintain a viable racing product.

Illinois purses right now are generated through betting handle, and Arlington testified Tuesday it will pay what is statutorily required, but the ITHA wants Arlington to find a way to come up with more money for overnight purses, focusing particularly on the Arlington Million card. The Million, Beverly D., and Secretariat paid out $2.1 million in purses in 2019, nearly all of which left with out-of-state trainers and owners, and the ITHA maintains Arlington’s focus during such a precarious time should be on local horsemen.

“The Million was what we looked forward to, to watch those quality horses run,” trainer, owner, and breeder Chris Block said during the ITHA presentation regarding the contract impasse. “In this day and age right now, in 2020, this industry cannot afford that big of a day.”

The ITHA said it is open to other solutions for increasing overnight purses. Representatives for Arlington and CDI countered that the ITHA had no basis for demanding what they termed “purse guarantees.”

“We’re not asking for a guarantee,” ITHA president Mike Campbell countered. “This is an apportionment issue. We can meet in the middle somewhere.”

The legislation is unclear about penalties for missing the Jan. 1 contractual deadline, but none so far have been imposed. If a contract isn’t signed within 90 days of a race meet, the IRB is required to provide mediation.

Purse levels would not be such a pressing issue had Arlington’s parent company, Churchill Downs Inc., elected to open a casino at the track, as it was permitted following the 2019 gambling expansion legislation. Late last summer, CDI announced it wouldn’t apply for an Arlington casino license.

Other entities might want to own Arlington and operate a casino there, and IRB chairman Jeff Brincat confronted ITHA president Mike Campbell about that very question. Campbell told local media outlets last week he had been approached by two entities that had expressed interest in acquiring Arlington. Petrillo said he knew of no offers that had been presented to Arlington, and Brincat said he’d contacted CDI president Bill Mudd after reading the reports and was told CDI “had never seen an offer.”

CDI owns a majority stake in Rivers Casino, the largest in Illinois, which is situated about 13 miles from Arlington. In a release announcing its intention not to pursue an Arlington casino, CDI expressed a verbal commitment to race at Arlington through 2021. Horsemen feel betrayed by CDI’s decision after years of lobbying, including from Arlington, for Illinois gambling expansion that would permit on-track casinos.

Hawthorne and Fairmount Park applied for casino licenses, the latest round of which is expected to be issued imminently. Hawthorne has begun the early phases of construction to accommodate its casino and because of the project won’t host a winter-spring Thoroughbred meet this year. Arlington’s meet, which begins in early May, is the first chance Illinois horsemen have to race outside Fairmount this year.

Arlington recently released a 2020 stakes schedule that has yet to be approved by the IRB and obviously will be a point of heated contention if the contract dispute persists.

The board voted unanimously Tuesday to certify $11,514,943 worth of recapture for 2019, money that is deducted from purse accounts and returned to Illinois track operators, with Arlington the greatest beneficiary, receiving more than $4.5 million from 2019. Recapture was made law in 1994 when track owners insisted on compensation for the introduction of full-card simulcasting. Bets placed at the track on live races return a greater percentage to track operator than on-track bets on simulcast races, and the law allowed tracks to “recapture” lost revenue from betting handle that migrated to out-of-state tracks.

The recapture certification hit a considerable point of contention when David McCaffrey, ITHA executive director, told the board he’d discovered Sunday, while at an off-track betting parlor with a friend, that the amount of recapture being certified might be incorrect. McCaffrey quoted the Horseracing Act, which says that “any advanced deposit wager placed in person at a wagering facility shall be deemed to be placed at that facility.” McCaffrey said the downloaded version of the Twin Spires application, CDI’s account-wagering platform, had no location services, meaning there was no way to track the account-wagering bets being placed at racetracks. The inclusion of such bets would increase the amount of recorded on-track handle and thus decrease the amount of recapture a track earned, since that formula is based on the difference between on-track handle on live races in 1994 and current levels.

McCaffrey’s presentation appeared to catch everyone off guard, and the board took a 15-minute break to discuss the possibility that in certifying the recapture amount it might be contravening the horseracing act. McCaffrey proposed escrowing the recapture amount until the on-track account wagering situation could be properly parsed, but the board, in the end, went ahead with its standard certification.

The meeting also included an agenda item regarding the use of crops in both Standardbred and Thoroughbred racing. The proposed rule on the Thoroughbred side would have permitted the use of the crop in races only to ensure the safety of horse and rider, not for a jockey to encourage his or her mount, a position no North American jurisdiction has yet adopted. Jim Miller, from Hawthorne Racecourse, Campbell, and Jockeys’ Guild representative Jeff Johnston all spoke against the potential rule, and with no one arguing for it, the measure was unanimously tabled by the board.