Churchill Downs CEO: ‘That land will have a higher and bet­ter pur­pose’

Chicago Sun-Times - - TOP NEWS - BY MITCHELL ARMENTROUT, STAFF RE­PORTER mar­men­trout@sun­ | @mitchtrout

The horses re­turned to Arlington Park last week, but all bets are off when it comes to how long they’ll keep rac­ing there.

Af­ter the coro­n­avirus nixed the start of the sea­son — and con­tract ne­go­ti­a­tions with the state’s horse train­ers de­layed it fur­ther till July 23 — the chief ex­ec­u­tive of the sto­ried north­west sub­ur­ban race­track’s cor­po­rate owner sug­gested to share­hold­ers Thurs­day that it could be sold, say­ing “the long-term so­lu­tion is not Arlington Park.”

“That land will have a higher and bet­ter pur­pose for some­thing else at some point,” Churchill Downs Inc. CEO Bill Carstan­jen said dur­ing a quar­terly earn­ings call. “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 in Illi­nois.

“We’ve been pa­tient and thought­ful and con­struc­tive with the par­ties up in that ju­ris­dic­tion, but long term, that land gets sold, and that li­cense will need to move if it’s go­ing to con­tinue,” Carstan­jen said, adding that noth­ing is “de­fin­i­tive, but cer­tainly it’s some­thing that’s on our mind.”

The fate of the track has been up in the air since last sum­mer, when Churchill Downs first threat­ened to move Arlington’s rac­ing li­cense as it an­nounced it was pass­ing on ap­ply­ing for a casino li­cense as au­tho­rized un­der a mas­sive gam­bling ex­pan­sion law signed by Gov. J.B. Pritzker.

Train­ers rep­re­sented by the Illi­nois Thor­ough­bred Horse­men’s As­so­ci­a­tion viewed that as the ul­ti­mate stab in the back af­ter decades of lob­by­ing along­side Arlington’s own­ers in Spring­field for just such leg­is­la­tion, but the Louisville-based gam­bling cor­po­ra­tion com­plained the taxes on “ra­cino” ta­ble games and slot ma­chines are too high.

Churchill Downs hasn’t com­mit­ted to rac­ing at Arlington be­yond 2021. Af­ter months of con­tentious ne­go­ti­a­tions, the track last month reached a two-year agree­ment with the horse train­ers.

But Carstan­jen ap­peared to hedge even on that Thurs­day, say­ing the track has an agree­ment to race in 2021 “if we elect to do so. That’s not a long-term vi­able so­lu­tion for the Arlington Park li­cense.”

And af­ter Arlington pre­vi­ously ap­plied to the Illi­nois Gam­ing Board to open one of the state’s first le­gal sports­books, Carstan­jen said they’re giv­ing up that pur­suit be­cause “we’re happy to play heav­ily in Illi­nois and sports wa­ger­ing through our Rivers li­cense.”

Churchill Downs also owns nearby Rivers Casino in Des Plaines, the state’s most lu­cra­tive gam­bling mecca that has grabbed an early choke­hold on Illi­nois’ nascent sports bet­ting in­dus­try. Rivers launched the state’s first re­tail sports­book in March and then last month took the first bets through its on­line sports­book.

Rivers is sure to have a leg up for some time on the on­line mar­ket, which ac­counts for the bulk of the han­dle in other states where sports bet­ting has been le­gal­ized.

As part of his coro­n­avirus dis­as­ter procla­ma­tion, Pritzker is­sued an ex­ec­u­tive or­der last month al­low­ing for bet­tors to reg­is­ter on­line for mo­bile sports bet­ting ac­counts, as op­posed to in per­son in a casino as re­quired un­der Illi­nois’ law.

Af­ter a month of bet­tors reg­is­ter­ing on­line with Rivers, Pritzker in his lat­est dis­as­ter procla­ma­tion let that in-per­son reg­is­tra­tion sus­pen­sion ex­pire Mon­day — just as mo­bile bet­ting gi­ant DraftKings ap­peared poised to dodge the “penalty box” pe­riod baked into Illi­nois’ gam­bling law for on­line-only sports­books, and en­ter the Illi­nois mar­ket through a co-brand­ing agree­ment with the Casino Queen in down­state East St. Louis.

Pritzker’s of­fice said that be­cause “casi­nos have re­sumed in-per­son busi­ness, there is no longer a need to sus­pend pro­vi­sions of the law that re­quire in-per­son reg­is­tra­tion.”

Rivers won’t have a mo­nop­oly on the Chicago-area mar­ket much longer, though.

While Arlington’s owner floated that race­track’s even­tual de­par­ture, Chicago’s other nearby track — Hawthorne Race Course in Stick­ney — re­ceived Gam­ing Board ap­proval for its sports­book through PointsBet USA, and an ap­proval of “pre­lim­i­nary suit­abil­ity” to move for­ward with its ra­cino devel­op­ment.

“It’s re­ally hard to put into con­text what this means for the very hard­work­ing peo­ple of the Illi­nois rac­ing in­dus­try,” Hawthorne CEO Tim Carey said in a state­ment. “It means horse­men will be able to keep their busi­nesses and fam­i­lies in Illi­nois. It means show­cas­ing this his­toric sport to a new gen­er­a­tion of fans. It means cre­at­ing a truly unique, first-ofits-kind en­ter­tain­ment ex­pe­ri­ence that won’t ex­ist any­where else in Illi­nois.”

Mean­while at Churchill Downs, Carstan­jen said the cor­po­ra­tion is “op­ti­mistic” about its bid to open a new casino in Waukegan — and didn’t rule out mak­ing a run for the Chicago mega-casino.

“We’ll have to wait till the city acts,” he said, re­fer­ring to pro­pos­als Chicago of­fi­cials are ex­pected to so­licit. “But cer­tainly we have some ad­van­tages of know­ing the mar­ket and be­ing fa­mil­iar with the ju­ris­dic­tion.”


Arlington In­ter­na­tional Race­course in the north­west sub­urbs, pic­tured in Au­gust 2012.

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