Is the casino “band-aid” falling off? - Casinos at racetracks were always seen as a temporary fix to racing’s massive problem of not doing enough business to survive.
/By Bill Heller
The danger signs are everywhere.
Casinos at racetracks were always seen as a band-aid—a temporary fix to horse racing’s massive problem of not doing enough business to survive, let alone prosper.
What happens when the band-aid falls off?
In Illinois, where horsemen battled for nearly 10 years to finally get casinos approved at its racetracks, Churchill Downs’ decision not to pursue a casino at Arlington Park has left the future of this international-caliber, iconic Chicago racetrack in dire doubt.
In Florida, another Churchill Downs’ racetrack—Calder Raceway—which has operated as Gulfstream Park West on a lease agreement with Gulfstream Park, sought and received legislative approval to keep its casino open with jai alai replacing horse racing. This year’s Gulfstream Park West meeting is its last, with horsemen having to remove their horses by April 15. In the interim, horsemen are hopeful that an appeal and two lawsuits will change that reality.
The governor in Pennsylvania in February called for revenue from casinos legislatively targeted to racetracks be used instead to offer free college education. And that was before the coronavirus pandemic made every state in America revenue strapped. Pennsylvania horsemen are hoping they’ll be protected under existing legislation.
The sky is falling.
“Frankly, not everyone is going to survive,” trainer John Servis, a board member of the Pennsylvania Thoroughbred Horsemen Association, said. “We all knew this was going to come. We need to be able to stand on our own two feet. We have to stop relying on the casinos.”
Can they?
The plight of Illinois horsemen is downright depressing. “The thing that strikes me is that Illinois never had the band-aid of the racino,” said Dave McCaffrey, a long-time harness racing trainer who was president of the Illinois Harness Horsemen for eight years and is now the executive director of the Illinois Thoroughbred Horsemen’s Association. “At least Delaware, New York and Pennsylvania had this nice run of 10 or 15 or 20 years of dramatically increased purses and increased racing dates because of casino revenue.”
A native of Iowa who went to college in Minnesota and fell in love with Quad City Downs—a harness track in Illinois—chronicled the decade-long battle to get slots approved at racetracks. It began while McCaffrey was the head of harness horsemen. It began with a typical, historic cooperation between the state’s Thoroughbred and harness horsemen. “The harness and Thoroughbred horsemen, typically in the country, do not agree on much,” McCaffrey said.
McCaffrey and Thoroughbred trainer Mike Campbell, who was president of the Illinois Thoroughbred Horsemen Association, had met at the University of Arizona Racing Symposium in 2009. The following year, they decided to work together. “Both breeds were in such dire straits we figured we were stronger together,” McCaffrey said. “What’s good for us is good for you. We hooked up in a great alliance, and in three months we crafted a bill that I think is the best racino deal in the country. It would have produced 15 percent of adjusted gross revenue to purses. In other states, the casino revenue goes from the racetrack to the state to the purses. In Illinois, it would go straight from the track to purses—a huge difference. When other states are strapped, they don’t want to pay that money for purses. In Illinois, they never get their hands on it.”
Neither have Illinois horsemen because there are still no racinos at Illinois racetracks a decade later. What wet wrong? McCaffrey provided the two-word answer: “Illinois politics.”
In various stages, the racino bill was a victim of the city of Chicago wanting its own casino; the governor vetoing the bill; one house passing the bill but the other house declining to do so; a governor who couldn’t get anything through because both houses were of the other party. “They fought like cats and dogs for four years,” McCaffrey said. “The bill didn’t even get to the floor.”
Right before the election of a new governor, Jay “J.B.” Pritzker, who supported the gaming bill, in 2018, Churchill Downs, bought a 60 percent interest in the Rivers casino, 13 miles from Arlington. “I remember it being Halloween when that deal was announced,” McCaffrey said. “There was all this optimism that the damn gaming bill might finally be passed in 2019.”
Prtizker took office in January 2019. The gaming bill passed both houses and was indeed signed into law on June 27, 2019, authorizing Illinois’ three remaining racetracks: Arlington Park, Fairmount Park and Hawthorne to build racinos. But Churchill Downs didn’t even apply for a racino license. “Churchill Downs decided this gaming bill doesn’t work for them and were not going to apply for the racino license at Arlington despite the fact that they were screaming for the bill to get passed for 10 years,” McCaffrey said.
It got worse. The coronavirus pandemic struck this spring, and Arlington’s already reduced meeting of 70 days were slashed to 30 minus Arlington’s signature races including the Arlington Million.
On July 31, according to a story in Chicago’s Daily Herald, Churchill Downs Inc. CEO Bill Carstanjen, on a quarterly earnings call with investors, said, “The long-term solution is not Arlington Park. That land will have a higher and better purpose for something else at some point. But we want to work constructively with all of the constituencies in the market to see if there’s an opportunity to move the license or otherwise change the circumstances so that racing can continue to Illinois. For us, we’ve been patient and thoughtful and constructive with the parties up in that jurisdiction, but long term, that land gets sold.”
Mike Campbell is buying none of that. “I’ve repeatedly said I’ve had conversations with several gaming companies to buy Arlington Park—three gaming companies and a very wealthy horse owner all made inquiries to Churchill Downs. Churchill Downs said, `Not interested.’ They’re just not interested. Carstanjen said, `a higher use than a racetrack. Who the hell is he to say it’s suited for a better purpose? There are thousands of jobs involved. I think that what’s going to happen at Arlington is that in the middle of the night they’re going to come in and excavate that track in a manner that it can’t be fixed. Just do it and don’t ask questions.”
“It’s exasperating,” Campbell said. “I’ve been president of the horsemen for 10 years. I’m all in for my horsemen. I told my board I’ll do everything I can to step in front of the train to slow it down. But money always wins. I’m the first to recognize it.”
Phone calls to Churchill Downs, Inc. requesting a comment were not returned. …
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