Will Arlington Park get to keep OTBs? State panel hasn't made a decision yet

This story has been corrected with the estimated amount of net profit Churchill Downs Inc. would stand to gain by keeping open its network of off-track betting parlors.

With their racetrack shuttered, Arlington Park management's bid to keep open their network of off-track betting parlors hit a snag Thursday amid tough questioning and skepticism by state regulators.

Arlington (and owner Churchill Downs Inc.) has applied for intertrack wagering location licenses that would maintain as many as six Trackside OTBs throughout 2022: on the racecourse property at Euclid Avenue and Wilke Road in Arlington Heights, on Weed Street in Chicago, and in Green Oaks, Hodgkins, Rockford and Villa Park.

But there's disagreement about whether such a move is legal under state law, considering Arlington Park is closed and officials didn't apply for live race dates in 2022.

The OTB application is opposed by horse owners and trainers represented by the Illinois Thoroughbred Horsemen's Association, who have been harsh critics of the Louisville, Kentucky-based Churchill Downs. Also lodging opposition is management of Hawthorne Race Course in Cicero - the lone-remaining Chicago-area track, which is picking up Arlington's parlors in Aurora, Hoffman Estates and McHenry, but needs state lawmakers' approval to acquire more.

On Thursday morning, members of the Illinois Racing Board seemed sympathetic to many of the opponents' arguments, and agreed to delay a decision until next month.

"I just have a concern as a board member in terms of how we've been treated by Churchill Downs," said Commissioner Benjamin Reyes. "They could've kept Arlington Park. If they were going to sell this thing they could've sold it to the (Chicago) Bears quietly. They could've had a few years to negotiate whatever it is that they had to negotiate. We could've seen racing up at Arlington for another year or two. But I don't get the sense that I can trust what Churchill has to say when they do the things that they do."

Arlington Park President Tony Petrillo said the company's pursuit of OTB licenses demonstrates its "continued commitment" to Illinois horse racing, while reiterating Thursday an ongoing pursuit to continue live racing at a new location elsewhere in the state.

Petrillo said Churchill would send Hawthorne $8 million in commissions and purses generated by Arlington's OTBs when the Cicero track's host time status kicks in next year. Churchill would stand to gain an estimated $250,000 to $300,000 in net profit, he said.

"We feel it is in best interest of the state to be able to continue to generate revenues for the state to be able to regulate racing. It is in best interest of the public to have these locations they're accustomed to going to. It is in the best interest of the state as well for the jobs," said Petrillo, noting that 80 to 100 people are employed at Arlington OTBs.

Board members peppered Petrillo with questions during the virtual meeting, in what was a rare public grilling following Arlington Park's Sept. 25 closure and pending $197.2 million sale to the Bears.

"Mr. Petrillo, I've heard you reference the loss of jobs several times in your presentation today," said Commissioner Beth Doria. "But I'm just wondering where that concern was when you actually closed the racetrack itself."

Petrillo said there's hope some of those jobs come back when Churchill finds a new live racing location.

"With any close of business, there are certain negative outcomes from that," he said.

Later, Petrillo told Reyes it was a "heartaching decision" for Churchill Downs CEO Bill Carstanjen to close and sell the racetrack.

"But in a public company, sometimes those decisions are hard," Petrillo said.

John Gay, the racing board's general counsel, recommended approval of the OTB licenses. He said the law provides that anyone with operating control of a racing facility who has held a race meeting for at least 60 days the previous year can submit an application to be considered by the board.

The issue has come up before, like in 1998, when then-owner Richard Duchossois temporarily shut down the track amid a dispute with state lawmakers. But the OTBs stayed open.

Daniel Albers, the horsemen group's attorney, disagreed, arguing that the "plain language" of the state statute is clear: since Arlington will not run live races in 2022, it should be ineligible to operate OTBs.

"This is a privilege, not a right," Albers said. "(Arlington) has walked away from Illinois racing."

The board meets again Dec. 16, when it also is expected to take up Churchill's application to maintain its TwinSpires mobile betting license in Illinois, under a proposed partnership with Fairmount Park in downstate Collinsville. The horsemen's group at that track, the Illinois Horsemen's Benevolent and Protective Association, is contesting that bid.

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