Churchill Downs Announces It Will Sell Arlington Park

Churchill Downs announced Tuesday that it has launched a process to sell Arlington Park, which sits on 326 acres of real estate 30 miles northwest of downtown Chicago. The sale will be handled by CBRE Group, a full service commercial real estate firm.

Arlington's future looked bleak in September of 2019 when Churchill Downs made the surprising decision to not take the necessary steps to open a casino on the racetrack property. It is widely believed that Churchill did not want to create competition between an Arlington casino and a casino it owns near the track. Churchill owns the Rivers Casino in Des Plaines, Illinois, which is about seven miles from the Arlington.

After confirming that it did not seek a casino license for the track, Churchill said it would only commit to racing at Arlington through 2021. In Tuesday's press release, Churchill said that it would honor the commitment to hold a meet that is scheduled to begin Apr. 30 and end Sept. 25.

“On the one hand, when you hear that Churchill is going to sell Arlington Park ,your heart immediately goes into your mouth because we are planning on racing there in two months,” said David McCaffrey, the executive director of the Illinois Thoroughbred Horsemen's Association. “We are a bit relieved that at least they are committed in writing to racing this summer That's the short-term gain part but we're deeply saddened that it looks like our worst fears will come true, that Arlington Park's last ever race will be held in September.”

In Tuesday's press release, Bill Carstanjen, the CEO of Churchill Downs Incorporated, said the company will pursue opening a racetrack/casino at a new location somewhere in the state. Once Arlington closes, Hawthorne will be the only track in the Chicago area, and Hawthorne and Fairmount Park will be the only tracks left in the state. Arlington opened in 1927.

In the release, Carstanjen touted Arlington as an attractive property for development.

“Arlington's ideal location in Chicago's northwest suburbs, together with direct access to downtown Chicago via an on-site Metro rail station, presents a unique redevelopment opportunity,” he said. “We expect to see robust interest in the site and look forward to working with potential buyers, in collaboration with the Village of Arlington Heights, to transition this storied location to its next phase,” said Bill Carstanjen, CEO of CDI.

As for the potential of opening a new racetrack in the state, Carstanjen said: “We are exploring potential options with the State and other constituents and remain optimistic that we can find solutions that work for the State, local communities and the thousands of Illinoisans who make their living directly or indirectly from Thoroughbred horse racing. We are committed to the Illinois Thoroughbred racing industry and will consider all options in working toward opportunities for it to continue into the future.”

McCaffrey said there would be several obstacles standing in the way if Churchill tried to open a new track in the state.

“Moving the racing license would require an awful lot of regulatory steps and probably changes to the state statutes,” he said. “It would be much easier said than done. To us, this is not a good solution. The good solution for us was to make Arlington Park the biggest and best racino in the country, bar none. Because of its location, its history, because there is a train station right at the track, it was the perfect spot for a casino. None of those things will exist in a place built somewhere else and I can promise you it would not have the grandeur of Arlington Park.”

Finding a location in a saturated market where a casino and racetrack would thrive will not be easy. There are already 10 casinos in Illinois, which does not include the casinos that have yet to open at Hawthorne and Fairmount.

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FanDuel Announces Multimillion Dollar Investment in Fairmount Park

FanDuel Group has announced plans to make a multimillion dollar investment in Fairmount Park Racetrack in Collinsville, IL. Under the terms of the agreement, Fairmount Park Racetrack will be rebranded as FanDuel Sportsbook and Horse Racing. In addition, the company plans a full revitalization of the venue including the opening of a FanDuel Sportsbook retail location. The agreement signifies FanDuel Group’s first investment in a race track.

FanDuel Group will work with William Stiritz and Associates to revitalize the 95-year-old track including significant upgrades to the facility and the establishment of a FanDuel Sportsbook retail location pending continued licensing and regulatory approvals from the Illinois Gaming Board. FanDuel Group and TVG have also announced that the company will fund the renewal and running of the $250,000 St. Louis Derby, the track’s signature event, which has not been conducted since 2006 due to financial constraints.

“We are delighted to partner with Fairmount Park to continue bringing high quality horse racing and soon additional entertainment experiences via our sportsbook to the region,” said Matt King, Chief Executive Officer of FanDuel Group. “Fairmount is an iconic state landmark which we plan to modernize bringing innovative technology and entertainment offerings only FanDuel can deliver.”

“Fairmount Park is excited to extend our partnership with FanDuel Group to now include their sports gaming platform,” said Melissa Helton, General Manager of Fairmount Park. “This partnership will allow the park to remain an important economic driver for the surrounding communities.”

Fairmount Park Racetrack is one of three horse racing venues currently active in Illinois and the only one outside of the Chicago metro area. The track opened in 1925 and offers thoroughbred flat racing on a one-mile dirt oval. Fairmount Park has been approved to host 53 live racing days in 2021 along with daily simulcast wagering on tracks throughout the country.

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Illinois Grants 2021 Dates Amid Distrust for Arlington’s Corporate Ownership

Citing distrust in Churchill Downs, Inc. (CDI), the gaming corporation that owns Arlington International Racecourse, the leadership of the Illinois Thoroughbred Horsemen’s Association (ITHA) on Sept. 16 asked the Illinois Racing Board (IRB) to impose a condition on 2021 race dates that would withhold millions of dollars in purse fund “recapture” money from the track if it did not end up racing its applied-for 68 days next year.

The IRB, which was meeting with three newly appointed commissioners for the first time on Wednesday, probed Arlington president Tony Petrillo about CDI’s intentions for racing in suburban Chicago in 2021 and beyond.

Board members specifically wanted clarification on earnings-call comments made July 30 by Bill Carstanjen, the chief executive officer of CDI, that said the corporation will honor its 2021 race meet contract with the ITHA “if we elect to do so” and that the Arlington property “will have a higher and better purpose for something else at some point.”

But after the IRB received advice from its attorney that statutory provisions covering recapture don’t allow the attachment of such a stipulation to dates orders, board members voted 6-0 to grant Arlington’s schedule with no strings attached.

The IRB also unanimously approved 2021 racing at Hawthorne Racecourse for 50 dates. Since 2016, the two Chicago-area tracks, Arlington and Hawthorne, have presented a unified race dates and dark-day host status template for the IRB’s approval.

Fairmount Park, which is 350 miles south and not considered part of that Chicago circuit, got its requested 53 dates.

Prior to the ITHA’s request for the recapture provision, Petrillo told the IRB that Arlington anticipates “running eight races per day during those 68 days and being able to offer a purse structure that will allow us to attract a sufficient horse population to fill those races, as well as conducting a stakes schedule that is necessary to support a long race meet over five months over the most competitive time of the year.”

John Walsh, Hawthorne’s assistant general manager, said the 10-month Chicago circuit arrangement “is good for the industry. The horsemen will have a place to be, and they’ll have something to look forward to in 2022 as we hopefully finish our casino sometime toward the end of next year.”

But despite the news of apparent accord, ITHA representatives made it clear the horse community didn’t have 100% faith that CDI would follow through on its contracted commitment to 2021 racing.

ITHA executives cited last year’s stunning decision by CDI to intentionally miss a deadline to apply for newly legalized racino licensure that would have bolstered purses at the track, plus an acrimonious eight-month battle with Arlington over recently inked contracts for 2020 and 2021.

“[Arlington saying] that they’re going to run in 2021 after the difficult time with the contract we had this year, that’s purposeful. It’s meaningful. We’re grateful for that,” said ITHA president Michael Campbell. “However, Arlington is the organizational licensee. CDI is not. And CDI will do whatever is in their best interest to fulfill their [corporate] fiduciary responsibility. And that’s a problem for us given [the disconnection] that we are greatly concerned about. We cannot go through another year as horsemen [with] even the possibility that there’s going to be some disruption or the cancellation of the racing season.”

David McCaffrey, the ITHA’s executive director, then made the request for the recapture provision.

“It’s not meant to be antagonistic or provocative in any way. And there really shouldn’t be any resistance, in my judgment, on Arlington’s part if their intention is to truly race,” McCaffrey said. “Because if they race, this would be meaningless. [It] would at least give some surety to the horsemen. Or, if for some reason, the meet doesn’t happen, at least it preserves the $4.5 million in recapture that would be taken out of the purse account.”

IRB chairman Daniel Beiser asked Petrillo to clarify CDI’s intentions for 2021 and beyond. But the Arlington president’s drawn-out reply was vague and laden with corporate-speak.

“Although 2022 will be here before we know it, there is some time needed to sort this out,” Petrillo said, in part. “And I know that these conversations have come up daily within the confines of the strategic team at Churchill Downs. And I know that they are working on some solutions. What they are at this time I don’t think that anybody could comment on publicly on that right now. But we…do feel our responsibility to the industry as well as the community. And we intend to fulfill that in 2021, and beyond that when the opportunity does exist.”

Beiser, after considering the ITHA’s request to use recapture payments as a cudgel for compliance, asked if Petrillo could provide written clarification from CDI regarding the gaming corporation’s intentions for Arlington.

Petrillo replied that the IRB would get that written assurance in the form of a signed dates acceptance letter that licensees are required to submit to the commission after getting dates orders. He bristled at the proposed “unprecedented conditions” over recapture that “might cause a flurry of legal matters to arise.”

Petrillo continued: “I think we’re opening up a can of issues that then also impede upon the agreement that we have with the horsemen’s association. Again, I just want to reiterate that it is our intent to race in 2021. When that acceptance is signed, that’s written in stone. If we do not comply, the IRB has a number of mechanisms to try and enforce that acceptance or penalize Arlington if there’s a failure to fulfill those commitments.”

Beiser again told Petrillo he’d prefer a separate form of written commitment. The IRB then recessed and voted upon the slate of dates after hearing advice from the board’s attorney. It was noted that while the IRB doesn’t have the authority to attach the recapture stipulations to the dates order, it does have the power to set the recapture payment schedule, and board could consider that when it certifies recapture payment amounts in January. But that would be nearly four months before the track even opens for racing.

Next year will see the return of a spring Thoroughbred meet at Hawthorne (Mar. 6-Apr. 25), which had been cancelled this season to allow for racino construction at the property.

Arlington’s dates will span Apr. 30-Sept. 25.

Hawthorne races again in the autumn, Oct. 1-Dec. 26.

Fairmount races Apr. 27-Sept. 6.

The actual race dates were awarded in blocks. The days cited above account for the dark days at the beginnings and ends of meets that were indicated in each track’s application.

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Influential Illinois Racing Commissioner Resigns

Commissioner Thomas McCauley, who volunteered his time to play a major role in mediating the recently contentious contract negotiations between Arlington International Racecourse and the Illinois Thoroughbred Horsemen’s Association (ITHA), abruptly resigned from the Illinois Racing Board (IRB) “effective immediately” on Sep. 4.

No reason was cited for McCauley’s sudden departure, which was announced in an IRB press release late Friday afternoon on the cusp of the Labor Day holiday weekend.

McCauley, an attorney who specializes in gaming law and regulatory compliance counsel as a partner at the Chicago-based Nisen & Elliott, LLC, was frequently the only member of the IRB to ask direct, pointed questions of racing industry stakeholders at IRB meetings. He served two stints on the IRB, first in 2014 and again starting in 2017.

McCauley was especially blunt over the past year in repeatedly grilling executives from Arlington and its corporate parent, Churchill Downs, Inc., (CDI). At an IRB meeting last September, he chastised CDI for lacking “any regard for social responsibility whatsoever” after the gaming corporation intentionally missed a deadline to apply for gaming licensure after a decade of working with the ITHA to get a state law passed to attain that privilege.

IRB Chairman Dan Beiser said in the release that “The Illinois horse racing industry has benefitted immensely from Tom’s service over the years and will definitely miss his valuable input.”

Commissioner Arlene Mulder, whose term on the IRB recently expired, was not reappointed, the IRB release also noted.

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