Horsemen Asking Illinois to Reimburse 'Recapture' Funds

Illinois Horsemen are appealing for industry-wide support of an effort to recover millions of dollars in purse money lost annually because of apparently unenforceable provisions of state law.

Executives of the state's three tracks and the chairman of the Illinois Racing Board all agreed at a Jan. 15 IRB meeting to cooperate in the effort. But none expressed much hope of success.

At issue, as it is every year, is "recapture." That provision of state law is designed to shield tracks from financial loss resulting from the advent of full-card simulcasting in the mid-1990s. It awards tracks compensation—taken from purse accounts. The "recapture" amount transferred from purse accounts to the tracks is based on the difference between handle on races run in Illinois in 1994 and any given subsequent year.

As part of the "recapture" rule, the Illinois General Assembly is supposed to reimburse the money taken from the purse accounts by the tracks.

According to figures compiled by the Illinois Thoroughbred Horsemen's Association, the total amount "recaptured" from purse accounts since the advent of the provision now stands at more than $295 million. The 2018 amount approved by the IRB was $11,414,167.

The ITHA in the past has tried several legal tactics to block the tracks' recapture of money from purse accounts, none of which has proved successful. The new appeal is to enforce another provision of the same law, which requires the legislature to replace the "recaptured" money into purse accounts from the state's General Revenue Fund.

Section 26(g)(13) of the Illinois Horse Racing Act provides:

"Annually, the General Assembly shall appropriate sufficient funds from the General Revenue Fund to the Department of Agriculture for payment into the Thoroughbred and Standardbred horse racing purse accounts at Illinois pari-mutuel tracks. The amount paid to each purse account shall be the amount certified by the Illinois Racing Board in January to be transferred from each account to each eligible racing facility in accordance with the provisions of this Section."

But there is no mechanism to enforce that provision and reimbursement has been made, according to the ITHA, only for 1999, 2000, and part of 2001.

"It should be no surprise to you that we continue to be upset by recapture," ITHA executive director David McCaffrey told the IRB. "But we do ask for some cooperation about getting recapture reimbursed. We are hoping to get the racing board and the tracks, if they are so inclined, working with horsemen to get reimbursement."

Racing board chairman Jeffrey Brincat said he has worked during his tenure to remind the Department of Agriculture and legislature of their statutory obligation.

"I have been active in reaching out to the Ag people in hope of getting this into the budget," he said. "We welcome the chance to be part of the solution."

Representatives of Arlington International Racecourse, Hawthorne Race Course and Fairmount Park all said they support reimbursement and all pledged to cooperate in a joint effort to reach out to the administration of Gov. J.B. Pritzker, who was sworn into office Jan. 14.

"A more concerted effort, asking for it, can't hurt," said commissioner Thomas McCauley.

Optimism was tempered, however, by the realization the state of Illinois has a backlog of unpaid day-to-day bills totaling more than $7 billion and that Pritzker will struggle to balance the budget—as he has promised to do—without substantial new taxes.

A more realistic hope for new revenue is passage of legislation expanding gaming throughout Illinois, including authorization for casinos at the tracks. Prizger has discussed gaming expansion as a potential non-tax revenue source.

Failing that, the IRB is moving forward with rules that would allow "Historical Horse Racing" terminals at the tracks—a move that has produced substantial purse increases for Oaklawn Park in Arkansas and Kentucky Downs and Churchill Downs in Kentucky.