What led to horse racing’s ultimate demise in the Chicago region? Fiscal irresponsibility and mismanagement.
Now that Chicago-area horse racing has been pronounced dead, the time has come to perform an autopsy.
The fiscal irresponsibility and mismanagement of bankrupt Hawthorne Race Course President Tim Carey was the immediate cause of death.
But in the wake of the impending sale of the 135-year-old track to the Delaware shell corporation Allimac 23 LLC, which intends to develop the 119-acre property for real estate purposes, it must be said that in the past 28 years, other racetrack owners made decisions that were significant factors in Chicagoland racing’s ultimate demise.
They are Sportsman’s Park’s president of thoroughbred racing, Charles Bidwill III, and his right-hand man, the late Ed Duffy; the late Arlington International Racecourse owner Dick Duchossois; and Churchill Downs Inc., which merged with Arlington in 2000.
In 1998, Bidwill and Duffy terminated the popular harness meeting controlled by the Johnston family, a minority owner of Sportsman’s, and converted the Cicero track into a thoroughbred and auto racing venue, Chicago Motor Speedway. In the process, seating was increased enormously, radically transforming what had once been cozy confines.
The Johnstons moved the harness meeting and its nationally renowned American-National series of races to Balmoral Park, the Crete track they owned.
Even though Chicago Motor Speedway received an enormous amount of publicity, it turned out to be an abysmal failure and was shut down in 2002, leaving Sportsman’s with $54 million of debt.
Sportsman’s National Jockey Club attempted to regroup by making a lease agreement with Hawthorne one block to the south, and the new entity, Hawthorne-National, planned to apply for thoroughbred dates for Feb. 23-May 6, 2007.
But that plan was thwarted in the summer of 2006 when Duchossois Industries, the family-owned company headed by Dick Duchossois, bought the National Jockey Club’s $28 million loan from Harris Bank and called in the loan for repayment.
Not only did this make Hawthorne-National unable to meet the statutory financial requirements necessary to conduct the contemplated meeting, but it also deprived Hawthorne of what was anticipated to be an important source of new revenue. Duchossois Industries also forced Hawthorne to pay for the backstretch barns and off-track facilities the National Jockey Club had built.
In 2012 Hawthorne took another hit when Churchill Downs — controlled by Arlington’s parent company — instituted a points-based qualifying race system for the Kentucky Derby. The list excluded the Illinois Derby, the Chicago circuit’s most prestigious prep race, while including such hitherto inconsequential races as the Sunland Derby in New Mexico and the Sam Davis at Tampa Bay Downs.
The next blow to Chicagoland racing came in the fall of 2014 after the state legislature passed a renewal of the impact fee levied against the area’s riverboat casinos for all of the tracks to use for purse money. As of that December, then-Gov. Rod Blagojevich had delayed signing it.
Balmoral President John Johnston made a “What’s holding this up?” call to an aide to Blagojevich’s chief of state, Lon Monk, and the aide mentioned that Balmoral and its sister track, Maywood Park, hadn’t made the requested campaign contributions to the governor.
Johnston said something to the effect of: “Don’t worry, it’s coming, but tell him we need him to sign that bill!”
Unknown to Johnston, the FBI was wiretapping the call. Even though Johnston never made the contribution, Blagojevich signed the bill.
But that didn’t matter. When the phone conversation was divulged during the criminal case that sent Blagojevich to prison, Johnston was found guilty of bribery, and Balmoral and Maywood in 2014 were ordered by the U.S. Court of Appeals to pay the casinos $77.8 million in restitution.
The amount was later reduced to $25.9 million, Johnston was granted immunity from prosecution for testifying against the governor and Balmoral and Maywood were able to race in 2015 as scheduled.
The reprieve was short-lived. At the Illinois Racing Board hearings for 2016 dates, Arlington and Hawthorne announced they were making a joint request: Hawthorne’s Suburban Downs would bring back harness racing for the first time since 2008 and hold 128 programs in addition to 65 thoroughbred programs, while Arlington would have 74 thoroughbred dates. With Balmoral and Maywood off the Illinois racing map, Arlington and Hawthorne would divide the simulcast betting pie.
It was a curious alliance in view of the fact that over the years Arlington and Churchill Downs Inc. had repeatedly attempted to undermine Hawthorne. Be that as it may, the racing board gave its blessings to the proposal that consolidated Chicagoland racing at Arlington and Hawthorne.
The end of racing at Balmoral and Maywood also marked the end of the American-Nationals at Balmoral and the lucrative and prestigious Windy City Pace and Galt Trot at Maywood. As a consequence, Chicagoland no longer had any races luring the best horses in North America, a major blow to the prestige of the circuit.
While several other states — most notably next-door Indiana — legalized adding casinos at racetracks, making them into “racinos,” the Illinois legislature dawdled.
Racinos weren’t introduced to make casino gamblers into horseplayers. Instead, the objective is to funnel a portion of the adjusted gross revenue into the purse account, improving the quality of competition and thereby making the product more attractive to bettors at the track and at out-of-state simulcast outlets.
For almost two decades, the Chicagoland tracks lobbied for racinos. Churchill Downs Inc. even had a provision in the Arlington merger that awarded Duchossois more stock if a racino became reality. Then in 2018, Churchill Downs Inc. bought a reported 62% share in Rivers Casino in Des Plaines, the state’s most profitable casino.
Meanwhile, the Duchossois family had been significantly reducing its 31.8% interest in the Kentucky gambling conglomerate as part of the patriarch’s estate planning. Churchill Downs Inc. responded by gutting the Arlington marketing department and eliminating customer perks that had made the track a Chicagoland entertainment destination.
In 2019, state lawmakers authorized a massive expansion of gambling. The bill allowed racetracks to add the casino component, six new casinos to be constructed, sports betting to be introduced and video gambling to be expanded.
Churchill Downs Inc. did a shocking about-face, announcing that it would reject the racino it had long sought, permanently shut down racing at tradition-rich and nationally renowned Arlington after the 2021 meeting and sell the property.
It was an overt attempt to eliminate competition for nearby Rivers Casino because sale terms stipulated there be no casino gambling, horse racing, simulcast wagering or sports betting on the property.
The Chicago Bears agreed to buy the property for $197.2 million in September 2021, and to reduce its property tax bill, the NFL team tore down what Architectural Digest had once hailed as “the world’s most beautiful racetrack.”
Arlington’s untimely exit left Hawthorne and Fairmount Park, a thoroughbred venue across the Mississippi River from St. Louis, as the state’s only racetracks.
When the 2019 bill was passed, both immediately announced plans to become racinos. Carey said Hawthorne would have a state-of-the-art $40 million casino, and its grandstand was partially demolished to launch the project. Carey told the racing board he was on the verge of finding a partner and an announcement would be forthcoming in the near future.
It was something Carey and his lieutenants would assure the board time and again during the years that followed. But while the other track in Illinois became Fairmount Park Casino & Racing, all that Hawthorne would do was acquire more creditors and sink deeper into debt.
After obtaining racino approval from the Illinois Gaming Board in the summer of 2020, many in the racing community suggested that Carey put up a temporary facility as the Waukegan licensee, Bally’s in Chicago and others have done. This not only would have been a revenue source for Hawthorne, but also would have put money in purses, enhancing the financial well-being of the people racing at the track and the quality of the racing product.
The track’s Gold Cup Room, which was its dining area, and The Turf Club, an upscale party room, seemed like ideal locations for temporary facilities, but Carey steadfastly refused, arguing that some fans might be turned off and wouldn’t return when the lavish $40 million racino with a racing motif became a reality.
He was living in a dream world. As time went on, inflation and President Donald Trump’s tariffs increased the amount of money needed for the project, and at the same time more competitors had begun operating, suggesting that the Chicagoland gambling market might soon be saturated.
All of the above probably discouraged prospective buyers who would have sought to continue racing and add a casino after Hawthorne declared Chapter 11 bankruptcy protection on Feb. 27.
Allimac’s $90 million bid in late June was the only offer for Hawthorne, which reportedly owes at least $238 million to 250 or more creditors.
So for the first time since 1921 — when a ban on racing that dated to 1905 was in its last year — there will be no racing of any kind in the Chicago area next year.
Parimutuel harness racing — born in Illinois at Maywood in 1946 — theoretically stayed alive after Hawthorne’s 14 Suburban Downs programs scheduled for January and February were canceled because a Nov. 6-Dec. 27 fall/winter meeting was scheduled, but it was taken off life support recently when it was announced that Allimac would close on Sept. 1 or 2.
Thus, Chicagoland racing passed away July 19 with the final program of a thoroughbred meeting that was originally scheduled to continue through Nov. 1.
“Racing people already knew all they need to know, the writing that’s been on the wall for years,” Marcus Hersh wrote in Daily Racing Form. “The Chicago circuit is finished.”