Illinois Board Axes Arlington OTB Licenses

The Illinois Racing Board Dec. 16 rejected a request by Arlington International Racecourse to continue operating its off-track betting parlors despite the closure and planned sale of the track.

A motion to allow the OTBs to continue under Arlington and its parent, Churchill Downs Inc., failed on a 5-5 tie vote amid harsh criticism of CDI's record in Illinois.

The board did, however, grant CDI's request to continue operating its advance-deposit wagering platform, TwinSpires, through a new agreement with FanDuel Sportsbook and Horse Racing, formerly known as Fairmount Park.

CDI acquired Arlington through a merger in 2000. In 2019, the corporation shocked the Illinois racing community by declining the long-pursued opportunity to add a casino to the suburban Chicago location—a decision that cost horsemen millions of dollars in potential purse money annually.

CDI then put the Arlington property up for sale and declined to apply for 2022 racing dates, leaving Hawthorne Race Course as the only active track in the Chicago area. The NFL's Chicago Bears signed a purchase agreement this fall to acquire the Arlington property with the intention to build a football stadium there.

Bill Mudd, president and chief operating officer of CDI, argued in a remote presentation to the IRB that Arlington needs to maintain an OTB system while the corporation seeks a location for a potential new racetrack somewhere else in Illinois.

CDI has said for more than two years it is interested in a new site for an Illinois track but has provided no specifics. Mudd's renewal of that suggestion was met with skepticism on the part of commissioners upset with the company's recent actions.

"What's to convince us that you are looking for something?" commissioner Ben Reyes asked Mudd. "I don't think that you are. Not in the state of Illinois. I'll tell you that much. If your business is flipping real estate like you guys brag in your corporate report and making money in that way, I don't see why we should be convinced that you're seriously looking for a site in Illinois."

Mudd noted Illinois law permits granting Arlington a license to operate OTBs for up to two years without actually running races "and we hope to operate them for two years while we're looking for an alternate solution. If we knew we couldn't find a solution, then we would turn the license in today."

IRB Chairman Daniel Beiser noted one of the reasons CDI cited for Arlington's closure was "the antiquated and archaic laws in Illinois that haven't been changed in 30 years. How could you be profitable with a new facility if they're antiquated now and does that mean you're going to try to change the laws? And, if so, how are you going to change them?"

"There are things that do need to change legislatively," Mudd said. "Part of that would certainly be the option to have a casino at that location."

Beiser expressed doubts any such changes could be effected in any timely fashion.

"Unless you're really got something up your sleeve that nobody's aware of, legislation usually doesn't move that fast," he said.

David McCaffrey, executive director of the Illinois Thoroughbred Horsemen's Association, said the decision to ax CDI's OTB license should be easy after consideration of the record.

"On what planet does a racing corporation that lobbied for years and years to get a gaming bill, that chose not to pursue the gaming bill, then chose to sell the property to a non-racing interest when those racing interests had submitted bids to buy the property, and essentially harm the game beyond repair ... On what planet is Arlington Park being held accountable?" McCaffrey said.

Commissioner Alan Henry said he would vote against giving CDI an OTB license, "looking forward in confidence that the racing industry is not going to once again be blindsided by a corporation driven by objectives that are not compatible with a healthy racing industry."

Hawthorne Race Course president Tim Carey said his track already has taken over operation of four OTBs Arlington closed and expressed willingness to add others from the Arlington roster. Under current law, Hawthorne is entitled to add only one more OTB to its license but Carey said the track could shuffle the roster to favor operation of more profitable parlors while seeking legislation to raise the limit.

Henry was the only "no" vote on a motion to approve a contract between CDI and Fairmount that enables Illinois operation for TwinSpires, arguing that deal will siphon purse money from Hawthorne to the horsemen's account at Fairmount.

Bill Berry, former chairman of the Illinois Racing Board and now an attorney for Fairmount, argued the added revenue is vital for that track.

"I think to take the view that the platform should be denied entirely in the state of Illinois ignores how important it is to Fairmount's continued operation and expansion downstate and the advantage to the horsemen that are operating and training right now there."

The board approved the agreement on a vote of 9-1.

In other action, Ed Martin, president of the Association of Racing Commissioners International, briefed the IRB on efforts to interface with the new federal authority slated to take over administration of racing in 2022.

Martin said the biggest problem for the Horseracing Integrity and Safety Authority is "they lack somebody who understands the ins and outs of what states need to know in order to operate and ensure they work with them."

The HISA will have to contract with states to set a procedure for drug testing, compliance, and other issues. And those negotiations, Martin said, will have to take into account the often contentious relationship between state racing commissions and legislatures about funding.

"The detail that is not known today," he said, "is what is this going to cost everybody?"