CDI Mum On Next Move, But Illinois Horsemen Have Ideas to Preserve Arlington Dates

[Wandering Eyes]

In the aftermath of the Illinois Racing Board (IRB)’s verbal grilling of a Churchill Downs, Inc. (CDI) executive Tuesday over the company’s decision not to seek racino licensure at Arlington Park, the Illinois Thoroughbred Horsemen’s Association (ITHA) is floating several proposals that could help the corporation that owns the suburban Chicago track demonstrate its commitment to racing in order to secure race dates there in 2020.

The mandate that CDI must show a racing-centric commitment was part of an IRB resolution voted on at Tuesday’s annual dates hearing that also included moving back the state’s awarding of race dates to Sept. 24.

The one-week delay was deemed necessary by the IRB because of CDI’s controversial and stunning decision last month to intentionally miss a deadline to apply for slot machines and table games at the track. CDI said it would apply for 2020 Arlington dates, plus sports betting, but made no commitment of any kind beyond 2021.

In late August, CDI cited the requirement of having to contribute gaming revenues to the Thoroughbred purse account as a competitive disadvantage it did not want to undertake by applying for Arlington’s gaming licensure.

But the simmering subplot over the past three weeks has centered around CDI’s ownership stake in a nearby casino and its stated intent to open another, fueling accusations that the corporation used the horsemen’s support to get gaming legislation passed but is now abandoning the idea of operating a racino at Arlington.

At Tuesday’s meeting, IRB commissioner Thomas McCauley chastised CDI for lacking “any regard for social responsibility whatsoever” and suggested that the company’s decision not to apply for gaming licensure was a ploy to gain leverage over state lawmakers in negotiations for more a more favorable gaming tax structure, according to the Chicago Sun-Times.

“I’ve been going to dates hearings for probably 20 years, and I don’t ever remember one that went quite like that one,” David McCaffrey, the executive director of the ITHA, told TDN via phone Wednesday. “In fact, I would have given out high odds going into the meeting that it would have ended the way that it did.

“Essentially, the way I understand it, they gave Arlington a week to come back and show how they are dedicated to the sport of racing in Illinois,” McCaffrey continued. “In all of the questions that board members asked, the root of them all was, ‘What is Arlington’s dedication to racing?'”

According to the Sun-Times, the IRB’s McCauley was so incensed over alleged political gamesmanship and CDI’s previous declaration in a press release that it would move its Arlington license to some other location that he rhetorically demanded of Arlington president Tony Petrillo, “Does Churchill think that it owns this [racing] license? Because if they do, I’d encourage you to call them up and let them know that the state of Illinois owns that license, and we as the agents of the state of Illinois have the authority and responsibility to grant a privilege to those who earn it.”

Petrillo, at Tuesday’s IRB meeting, mainly toed the corporation’s line (high taxes, a saturated gambling market) in answering queries about what was driving its decision to bail out of the gaming bill it crafted and chaperoned through the state legislature over the past 12 years. According to the Sun-Times, Petrillo testified that Arlington’s profit margin is just 3.6% right now.

R. Alex Rankin, the chairman of the board of directors for CDI, did not return a Wednesday voicemail message prior to deadline for this story requesting clarification on CDI’s intentions in Illinois. He has also not answered previous queries by TDN seeking comment on the subject, so right now it is anyone’s guess what CDI’s proposal will be next week when the IRB reconvenes to decide Arlington’s fate.

Absent any publicly-stated input from CDI, the ITHA’s McCaffrey has several ideas on how the corporation could attempt to save racing at Arlington for 2020.

“Short of somehow figuring out how to re-apply for the gaming and to commit to it–and that’s fraught with problems–they could commit to giving half of the proceeds from sports betting to the purse account,” McCaffrey said.

“Tellingly, the sports betting bill gives nothing to purses,” McCaffrey added. The other thing they could do is forego their ‘recapture’ that is due [to] them next year. Recapture is this thing in the law that allows a racetrack to dip into the purse account and take money out to transfer it to their side of the ledger. Over the years, Arlington has taken out over $100 million. And next year that payment will be somewhere in the neighborhood of $4.5 million. If they were to forego that and leave it in the purse account, that would certainly be a demonstration of them showing dedication to racing. That would be huge.”

When asked if he thinks that CDI might actually want the IRB not to grant it 2020 race dates so the corporation can get out of the Illinois racing business altogether and reap the profits from selling Arlington to developers while still operating nearby casinos, McCaffrey said he doesn’t think that is CDI’s intent.

“I’ve heard that. That’s not from out of left field,” McCaffrey said. “But if that was their intention, then why did they apply for dates? They could have not applied to race in 2020 and just said ‘See ya!'”

At Tuesday’s meeting, McCaffrey said, the horsemen “tried to portray a willingness to participate in any way, shape, or form that we can to come up with a good solution.”

But the reality is, he added, that unless CDI contacts the ITHA to ask for help in presenting a unified plan before Sept. 24, all the Illinois horsemen can do is wait.

“The gaming bill was the long-term solution to bring back Illinois racing,” McCaffrey summed up. “And the craziest part of this whole story is that it was a gaming bill that Arlington helped craft and negotiate. Three years ago it was Arlington that wanted the bill changed to include table games, and they got it. Then they rejected it by not going after their license. That is a real affront to racing, and that is what the racing board called them on at Tuesday’s meeting.”

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