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Illinois HBPA Withholds Consent For TwinSpires To Operate In Illinois

The organization representing owners and trainers at FanDuel Sportsbook and Horse Racing (formerly known as Fairmount Park) is withholding consent for the TwinSpires betting platform to accept wagers from Illinois residents.

The board of the Illinois Horsemen's Benevolent & Protective Association, which represents horsemen at the southern Illinois track 15 miles from downtown St. Louis, cites the closure of suburban Chicago's industry icon Arlington Park by Churchill Downs Inc. (CDI), TwinSpires' parent corporation, as a prime motivation for withholding consent. With CDI not owning a functioning racetrack in Illinois in 2022, TwinSpires must under state law have a contract with another duly licensed track to conduct business in the state starting Jan. 1. The only remaining Prairie State horse tracks are FanDuel and Chicagoland's Hawthorne Race Course, with CDI seeking approval through the FanDuel track.

Illinois law also gives horsemen consent rights before an advance-deposit wagering (ADW) platform can enter into a relationship with an Illinois track to conduct business in the state.

Illinois HBPA president Jim Watkins said his organization's board believes the issue is of the magnitude that it should go before the Illinois Racing Board. The IRB has scheduled a hearing on Dec. 16 at 10 a.m. Central via WebEx. The racing regulators have the power to overrule the horsemen's veto if they believe the horsemen's action was unreasonable, he said.

“That's where we're at now,” Watkins said. “We just felt this was an issue the racing board should be able to weigh in on, whether TwinSpires continues to be allowed to operate in Illinois. That's a big reason we withheld our consent.”

Watkins said the horsemen are upset not just that CDI shut down Arlington Park but then would not sell to ownership wishing to maintain racing at the 94-year-old track. CDI is the majority owner of Rivers Casino Des Plaines, located 10 miles from Arlington Park. The company has an agreement to sell the Arlington Park property to pro football's Chicago Bears for a reported $197 million.

“CDI wants their cake and to eat it, too: 'We're not willing to be involved in the racing, but we want to still utilize our ADW powers in Illinois,'” Watkins said.

Beyond the situation with TwinSpires in Illinois, Watkins believes there are fundamental issues with the entire ADW model that the industry must address to maintain horse racing's viability.

“This is where the system is really flawed,” he said. “It's an agreement between three parties. In Illinois, the track and the ADW provider negotiate the contract, and the third — the horsemen — is just the consenter. There are so many questions left unanswered. Obviously with the increased numbers of people using ADWs, the horsemen and the tracks get so much less of that it could spell doom for us.

“The framers of these ADWs intended for it to basically be a third to the provider, a third to the track and a third to the horsemen. But they take out fees up front, and those fees are unspecified in purpose and amount. What is an ADW fee? What does that mean? The racetracks don't ask the ADW to pay their security payroll and the electric bill. And the horsemen don't ask the ADW company to pay the feed bill and hay bill and straw bill.”

Watkins said the Illinois HBPA also “wants to bring light to a flawed system” under which online betting platforms operate. Watkins said that the ADWs make the lion's share of the net proceeds at the expense of horsemen's purse accounts and brick-and-mortar tracks and simulcasting facilities, even as the online technology siphons off the majority of bettors.

“It's inherently flawed, just the way it is set up,” Watkins said. “I think it's going to be the death of horse racing if we continue to go at the rate we're going. This was so well-said by a Chicago horseman: 'We traded dollars for quarters when we went to simulcast wagering. Now, with the ADW wagering, we're trading dollars and quarters for nickels.' The recipe has to be changed if horse racing — at least for the mid-level and smaller tracks — is going to exist.”

Watkins points to a July 14 article by former New York Racing Association head Charles Hayward, now publisher of Thoroughbred Racing Commentary, that illustrates the inequities of the ADW splits.

“Because of the pandemic of early 2020, Advance Deposit Wagering (ADW), Computer Robotic Wagering (CRW) and other off-track outlets handled 97 percent of the total U.S. racing handle last year,” Hayward wrote. “The on-track handle was the remaining 3 percent, or $333 million.

“… Here is a model of how the racetrack and the purse account would split a million dollars bet through an ADW: The ADW operator receipts would be $70,000, or 40 percent greater than the $50,000 total proceeds to the racetrack and the purse account.”

The Illinois HBPA signed a one-year contract with TVG to operate in Illinois, Watkins said. FanDuel, part of the corporate enterprise that operates the TVG racing channel and betting platform, is the southern Illinois track's equity partner to operate the sports book. While the company is not a partner in the racetrack, it received branding and naming rights as part of a contract that includes the long-term sponsorship of the St. Louis Derby, worth $250,000 in 2021.

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The Bitter End: Arrogance Of Arlington Park Management Washes Away Memories Of A Better Time

The new millennium was not kind to horse racing in Chicagoland.

In 2000, the Bidwill family's Sportsman's Park, the bullring in the gritty south side suburb of Cicero that for years hosted both Standardbred and Thoroughbred racing, had just been transformed to an auto track that planned to continue offering Thoroughbred races on dirt spread over a concrete oval. That absurd experiment lasted a couple years. The auto track was a dud and a financial disaster. The dirt track was unsafe. Sportsman's ran its last horse race in 2002 and is now the site of several big box stores.

And 2000 was also the year Richard Duchossois merged his family-owned Arlington Park in the northwest Chicago suburb of Arlington Heights into the portfolio of the publicly traded Churchill Downs Inc. Then under the leadership of Thomas Meeker, Churchill Downs had been on something of an acquisition spree, having just purchased Calder Race Course near Miami, Fla., and Hollywood Park in Inglewood, Calif.

We know how those acquisitions have worked out for the Thoroughbred industry. Meeker left Churchill Downs in 2006, one year after Hollywood Park was sold to a land development company that would close the track in 2013 and construct an NFL football stadium in its place.

Calder's grandstand was torn down in 2015 and the racing surface and a portion of the stables were leased to The Stronach Group, owner of Gulfstream Park, to run a spectator-less meet re-branded as Gulfstream Park West. That lease expired last year and Calder/GP West is now history. So, too, are the purse supplements that came from the Calder Casino, for which horsemen helped Churchill Downs Inc. fight for approval in a 2008 referendum.

It's difficult to imagine how there is a future for Arlington Park as a racetrack after the current meet ends next month. Churchill Downs Inc. is majority owner of Rivers Casino 10 miles away and turned down the opportunity created in 2019 by gambling expansion legislation that would have permitted an on-site casino at Arlington. Illinois breeders, owners and trainers were stunned and felt betrayed when Arlington said it would not apply for a casino license and instead sell the property for development. For years, decades even, horsepeople stood side by side with Arlington representatives in the state capitol in Springfield, lobbying for legislation to permit slots or casinos at racetracks.

Arlington did not apply for 2022 racing dates and it would not be in Churchill Downs Inc's best interests as a casino company to sell the track to anyone who would offer pari-mutuel wagering on horse racing. That would be competition for the gambling dollar and conceivably could hurt Rivers Casino's business.

The Carey family's Hawthorne Race Course appears to be Illinois racing's last hope – unless you count old Fairmount Park in southern Illinois, which has been rebranded as FanDuel Sports Book and Horse Racing.

Hawthorne, which sat directly adjacent to Sportsman's Park, announced plans for a $500 million casino expansion following the 2019 gambling legislation. But construction on the casino was halted in April, with no public explanation or a timeline for completion.

Even if the Hawthorne casino is completed, the situation is far from ideal. Hawthorne is now the only track hosting Standardbred racing in the Chicago area, and this creates not only a potential conflict over racing dates between the two breeds, but future revenue from the casino earmarked for purses will have to be divided between Thoroughbreds and Standardbreds. The 2019 legislation permitted a new harness track/casino to be built in an area south of Chicago, but to date neither a suitable investor or property has been approved.

Arlington's racing days are dwindling down to a precious few, The palatial grandstand remains one of the great wonders of the North American racing world, though it's obvious the once pristine aesthetics and maintenance standards set by the very hands-on Richard Duchossois have fallen considerably as he approaches the century mark in years. Unsightly weeds growing throughout the plant are just one of the eyesores that wouldn't have been there a decade ago. In fact, back then, Duchossois himself might have grabbed a weed wacker to show the maintenance crew how it's done, just as he took control of traffic flow into the parking lot one Arlington Million day not that many years ago.

Speaking of Arlington Million Day, or whatever it was called this year after the signature race's purse was slashed and renamed the Mr. D. Stakes in honor of Duchossois, how about that Tony Petrillo, the track's president?

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Based on reporting by Jim O'Donnell in the Daily Herald (apparently the only Chicago-area newspaper to cover this year's three Grade 1 races, with both the Chicago Tribune and Sun-Times ignoring them), Petrillo had quite the meltdown, lashing out at media members who did come to cover the races. According to O'Donnell and confirmed by several writers and photographers from horse racing publications, Petrillo would not allow photographers, other than the track photographer, to get in position to photograph any of the big turf races.

After the day's final race was run, buoyed with members of the security staff, Petrillo cleared out the press box while those same writers and photographers were trying to finish their assignments and send their stories and pictures to their respective publications. Petrillo even told one photographer who happened to be on assignment for a Churchill Downs Inc. subsidiary, that she was “banned for life” from Arlington Park.

It's the same treatment owners and trainers have been receiving from Arlington management in recent years.

There was a time when Arlington Park's press box was as welcoming and friendly as any track in the country. It wasn't just the comfortable accommodations or the excellent meals that were served to grateful writers and photographers. More importantly, Richard Duchossois would walk through the press box and thank each member of the media individually for coming to Arlington Park, asking them if there's anything they needed.

How times have changed.

My gut feeling is that this is the end of the road for Arlington Park, the track where I fell in love with racing in the 1970s. It's been a long, slow and painful death to observe since Duchossois relinquished complete control of Arlington in 2000. I may not agree with them, but I understand business decisions and fiduciary responsibilities that drive publicly traded companies like Churchill Downs Inc. What I don't understand is the arrogance and nastiness from Arlington's management that has accompanied the track's tragic fall.

I had always thought the final days of Arlington Park would be bittersweet, a mix of sorrow with the great memories furnished by the horses and people who put on the show for so many decades. But the architects of what seems destined to be this wonderful track's final chapter seem hell bent on making sure it's a bitter end.

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Illinois Horsemen Urge Antitrust Investigation Over Alleged Arlington Park-Rivers Casino Link

The following statement was issued by the Illinois Thoroughbred Horsemen's Association:

The Illinois attorney general's office has been urged to investigate whether Churchill Downs Inc. committed state or federal antitrust violations when it took a series of steps to preclude casino gaming and diminish pari-mutuel wagering at a site in close proximity to its Rivers Casino in Des Plaines, Ill.

Churchill spent two decades pursuing the authority to operate a casino at the Arlington Park racetrack in Arlington Heights, but, after purchasing the majority stake in Rivers, maneuvered to end gaming at the nearby track. Churchill abruptly abandoned its Arlington casino plan and, in moving to sell the property, insisted the site's future use would be “higher and better” than horse racing – effectively ending the continuation of meaningful pari-mutuel wagering activity. All the while, Churchill executives were careful in their public comments to avoid stipulating any motive on their part to suppress competition facing Rivers, their highly successful casino.

Also established is that Churchill contradicted the intent of a 2019 Illinois law that authorized a casino license for Arlington – the privilege that Churchill had sought before purchasing its stake in Rivers. Churchill's decision to forgo the option to open a casino at Arlington surprised Illinois elected officials who backed the 2019 law; the Arlington casino was intended by state officials to generate new tax revenue for the state and local governments, boost pari-mutuel wagering, enhance the racing program at the track, and create scores of new racing-related jobs.

But unclear is whether Churchill's steps rose to violations of state or federal antitrust laws. In a letter to the Illinois attorney general's office, Mike Campbell, president of the Illinois Thoroughbred Horsemen's Association, described a pattern of deceit by Churchill executives and argued that the publicly available evidence supports the launch of an antitrust investigation.

“Churchill executives evidently engaged in a campaign to block current and future gaming scenarios at Arlington while telegraphing messages to deflect public attention from its actual intent: shielding Rivers from a major gaming competitor in close proximity,” Campbell wrote in the letter, which also was forwarded to the U.S. Justice Department. A PDF of the letter is available here.

Arlington is just a 12-mile drive from Rivers; a reinvigorated horse racing program at Arlington, particularly as part of a casino entertainment complex, would become the closest major gaming competitor to Rivers. In February, Arlington Heights Mayor Thomas Hayes told ABC7/WLS-TV in Chicago what others had privately concluded. “I think it's clear why they did not choose to open a casino at the racetrack property – because it would directly compete with their majority interest in the Rivers Casino,” he said of Churchill.

Churchill plans to accept bids for the purchase of Arlington in mid-June. Amid widespread concern that Churchill might be angling to preclude a future owner of Arlington from engaging in forms of gaming, the Arlington Heights village board in early May approved an ordinance intended to prohibit Churchill from placing certain restrictions – specifically, those that would prevent future gaming – on the property.

Campbell noted in the letter to the Illinois attorney general's office that the ITHA brought to the attention of Illinois racing regulators a reported offer in 2019 by a group of prospective owners to purchase Arlington from Churchill with the intent of continuing racing, and developing a casino, at that site. Churchill reportedly refused but never publicly noted any such offer.

“It's unfortunate that Churchill Downs, once a stalwart of thoroughbred racing, appears now to care solely about corporate profit. But Illinois isn't Churchill's trough – our state doesn't exist to feed Churchill's greed,” Campbell said. “A gaming license such as the one granted to Rivers Casino is a privilege. It means Churchill has a responsibility to follow the law, particularly when the law is aimed at serving the best interests of Illinois taxpayers.”

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Illinois Racing Board Member Criticizes Churchill For ‘Shortsighted,’ ‘Self-Defeating’ Decision To Sell Arlington

One member of the Illinois Racing Board, author and journalist Alan Henry, had a lot to say about Churchill Downs Inc.'s decision to put Arlington Park up for sale at the monthly board meeting. According to the Chicago Daily-Herald, Henry called CDI's refusal to sell the property to another racing entity “a shortsighted and self-defeating posture” that would irreparably tarnish the company's brand.

“While CDI's stock is currently riding high, the corporate graveyard is full of companies whose leaders lost sight of their brand and in doing so lost the loyalty of their customers,” Henry said. “In the long run, the company that trumpets its bond to horse racing and wants to keep the brand in good standing across all its platforms has to respect current horseplayers and keep attracting new ones. To do that, you've got to honor the horse and the horsemen and mean it, and that starts by keeping tracks open, not closing them down.”

Henry referenced CDI's shut downs of California's Hollywood Park and Florida's Calder Race Course, adding that CDI now sees Arlington as “disposable” in an effort to protect the nearby CDI-owned Rivers Casino.

CDI announced the sale of Arlington on Feb. 23, 2021, indicating that it would host live racing at the Illinois track through the 2021 season, which is scheduled to end on Sept. 25.

Read more at the Chicago Daily-Herald.

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