Illinois Racing Board rejects Churchill Downs Inc. bid to continue operating OTBS
The Illinois Racing Board on Thursday narrowly voted to reject plans by Churchill Downs Inc. to continue operating off-track betting parlors in the state despite the cessation of racing at the company’s Arlington Park in the northwest suburbs of Chicago.
The vote, 5-5, failed because a majority was required for approval. The vote was taken after several commissioners directed harsh rebukes at Churchill for its decision to cease racing at Arlington next year. Earlier this year, Churchill Downs announced that it had reached an agreement to sell the 325-acre Arlington property to the Chicago Bears, though that sale is not scheduled to close until early in 2023, according to CDI officials.
“To be clear, this is not about looking backward in anger,” said commissioner Alan Henry, in telling his fellow commissioners that he planned to reject Churchill’s application to operate the OTBs. “This is about looking forward in confidence that the racing industry is not going to be blindsided by a corporation driven by objectives that are not compatible with the best interests of this state’s racing industry.”
Arlington operates nine OTBs in the state, and those OTBs are now expected to close at the first of the year. Hawthorne Racecourse operates its own OTB network, and it has opened four additional OTBs over the past month, according to track president Tom Carey, but state law limits any one license holder to 16 total locations.
Bill Mudd, the chief operating officer of Churchill Downs Inc., urged the commission to approve the license application, saying that Churchill remains interested in live racing in the state, just not at Arlington, which he said had a “higher and better use” as a property than as a racetrack.
“We’re looking to keep the OTB network operating because we are looking for an alternate racing solution in Illinois,” Mudd said. “We don’t want to have to recreate that OTB network if and when the opportunity arises.”
Separately, Mudd said that Churchill is lobbying state legislators to change a casino law passed in 2019 that would be more favorable to racetracks. He said any racetrack that the company would build would need to have a “full entertainment offering to include a casino.”
The casino law passed in 2019 would have allowed Churchill to apply for a casino license at Arlington. Though Mudd acknowledged that the company lobbied for an opportunity to build a casino there, the company declined to pursue a license because of the high costs required to maintain the license, plus uncertainty over where a casino in Chicago would ultimately be located. Churchill also owns a majority interest in the largest casino in Illinois, which is located 15 miles from Arlington.
Questioned by commissioners about where exactly Churchill was looking to build a racetrack, Mudd declined to give details, citing “competitive information.” But he said that it should be apparent that Churchill is still exploring its options.
“If we knew we couldn’t find a solution, we’d turn in our license today,” Mudd said.
The IRB agenda also included an item to approve a license for Churchill’s account-wagering company, twinspires.com, and the board overwhelmingly approved the license. It was announced at the start of the discussion that horsemen at FanDuel Sportsbook and Horse Racing (formerly known as Fairmount Park) in southern Illinois had given their consent for twinspires.com to operate in the state, a requirement under state law.
Bill Berry, a former Illinois Racing Board president who represents FanDuel, told commissioners that approval of the license would lead to greater horseracing handle in the state, an argument that held sway with a number of commissioners who voted to reject Churchill’s OTB application.
“As you know we don’t have some of the benefits downstate that you have upstate,” Berry said. “This is a means of facilitating and increasing our handle down here.”
Arlington’s horsemen had objected to twinspires.com being allowed to continue to operate in the state, citing Churchill’s decision to cease live racing next year.