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Gaming Board should play hardball with Arlington owner Churchill Downs
5th October, 05:58Churchill should divest Arlington to an owner that will operate the racetrack as a racino. If Churchill refuses, the state should take these steps to force its hand.
A casino at Arlington Park would dramatically enhance the venue's entertainment appeal, bolster live racing by driving more dollars into purses, and support the interests of taxpayers by growing jobs and generating more revenue for the state.
If only track owner Churchill Downs had followed the plan, detailed in the state's new gaming law, for Arlington to become a racino. Churchill snubbed that law -- as well as the governor and legislators who voted to grant Arlington the racino it had for more than a decade requested -- by refusing to apply for a racino license. Churchill owns the majority stake in Rivers Casino, just a 12-mile drive from Arlington, and opted not to elevate its own competition.
But padding the profits of an out-of-state corporation is not Illinois gaming law's purpose. The goal is to maximize competition and economic benefits for the state. With respect to horse racing, the point is to create jobs both at tracks and throughout agribusiness downstate. Racing supports jobs -- from veterinarians and blacksmiths to hay and feed suppliers -- that other forms of gaming don't.
Churchill should divest Arlington to a qualified owner that will operate the racetrack as a racino. If Churchill refuses, the Illinois Gaming Board could hold the company accountable by denying its request for a sports betting license -- our association has urged the board, which will soon evaluate license applications, to do just that -- and by blocking it from a financial interest in the expansion casinos.
Through its continued control of Arlington, Churchill is poised for a distinct advantage over other casinos in the sports betting arena. Each casino can use its single location to operate sports betting and also register individuals planning to engage in sports betting via mobile. Arlington and the state's other two tracks, however, can each utilize four locations -- the track and three inter-track wagering locations -- for those purposes. Churchill's sports betting reach, therefore, could extend well beyond Rivers.
Churchill also stands to take advantage of an antiquated statute permitting a track to take dollars from horsemen's purses to subsidize its own operations. This taking -- called "recapture" and unique to Illinois -- depletes purses and undercuts our industry's ability to compete with other states' tracks. The new gaming law is designed to end recapture but only after a track becomes a racino. Churchill, by opting against a racino, could claim those funds indefinitely. In 2019, Arlington reaped $4.47 million from recapture.
Most important, Churchill's grasp on Arlington means another operator has no chance to realize that spectacular facility's full potential. Surely, the Gaming Board won't allow a single company operating in bad faith to stifle the growth of Illinois horse racing, reduce its own competition, exploit state law to dramatically expand its sports betting footprint, and continue to drain purses through the practice of recapture that the governor and legislature, acting on the belief that Churchill would develop a racino at Arlington, moved to abolish.
Michael Campbell is president of the Illinois Thoroughbred Horsemen's Association in North Riverside.