Illinois harness horsepeople cautiously optimistic as legislature enters final weekend of spring session
by Neil Milbert
After seeing some progress in pursuit of their objectives, members of the Illinois Harness Horsemen’s Association (IHHA) were cautiously optimistic going into the final weekend of the spring session of the state legislature that will end on Sunday (May 31).
The IHHA website reports that on May 26 the organization’s executive committee members testified on the merits of the new House Bill 5369 sponsored by Representative Bob Rita and emphasized the need for the proposed racino in downstate Decatur, a quicker path to another racino in Chicago’s south suburbs and an end to the 1995 “recapture” provision in the racing statute.
According to the website: “This bill appears to become the larger anticipated gaming bill. We expect to see amendments added.”
A similar bill passed the Illinois Senate 49-8 last fall.
Amid the upheaval created by Hawthorne Race Course’s debt crisis and subsequent bankruptcy, there has been virtually no discussion of the much-maligned “recapture” law that allows Illinois racetracks to recoup losses on live handle as a consequence of the authorization of full-card simulcasting of races from other states. The recapture amount is 2 per cent of the decrease of Illinois handle on Illinois races in 1994 before enactment of full-card simulcasting.
Since then, recapture has escalated and over the past 30 years has cost harness and thoroughbred owners a small fortune.
While members of the IHHA have fixated on developments at the state capital in Springfield, in Chicago on May 27 there were two developments in the Hawthorne bankruptcy case:
1. U.S. Bankruptcy Judge Timothy Barnes has granted a request from the financially besieged track that conducts both thoroughbred and harness racing to investigate its allegations that the Illinois Department of Agriculture and its director, Jerry Costello, improperly diverted state funds from the track to benefit Fairmount Park Casino and Racing.
Hawthorne is asserting that Jerry Costello has a conflict of interest because his brother, John, is a lobbyist for the Horsemen’s Benevolent and Protective Association (HBPA) that represents owners and trainers at Fairmount.
2. Hawthorne’s court filing also alleged that Fairmount — which is located across the Mississippi River from St. Louis about 275 miles south of Hawthorne — is undermining its ability to conduct thoroughbred racing and hurting its chances of emerging from bankruptcy as an ongoing racetrack operation.
The crux of the argument is that Fairmount is doing this by sending text messages to trainers barring them from the grounds if they take horses for races elsewhere when similar races are in the Fairmount condition book during the approximate same time frame.
Fairmount also has doubled purse supplements for some of its races from $10,000 to $20,000 and raised its minimum purse from $4,000 to $10,000.
In a text message to members of the HBPA, Fairmount took a shot at Hawthorne by stating: “Unlike other racetracks that are in serious and possible fatal declines, Fairmount Park is on a definite upward swing that will continue to improve. Come race with us where the future is bright.”
Hawthorne and Fairmount are the only remaining tracks in Illinois. Unlike Hawthorne, Fairmount is limited to thoroughbred racing and has an onsite casino.
Currently, Hawthorne is holding twice-weekly thoroughbred programs during a meeting that began on April 19 — three weeks later than originally scheduled — and racing is scheduled to continue through Nov. 1.
The Suburban Downs harness meeting is scheduled to restart Nov. 6 and continue through Dec. 27 with programs on Friday, Saturday and Sunday in November and Saturday and Sunday in December.
But, given Hawthorne’s dire and uncertain financial situation, many doubt that the harness meeting will be held.
All 14 of Hawthorne’s Suburban Downs harness dates in January and February were canceled because of the track’s inability to pay its mountain of bills and its Suburban Downs license was suspended by the Illinois Racing Board on Jan. 26.
Then came the Chapter 11 bankruptcy filing on Feb. 27. Under Chapter 11, the target date for a sale is July 13.
Tim Carey, president of family-owned Hawthorne, said in a statement he is considering offers not only from prospective buyers who want to continue racing and add the casino component that 2019 gaming expansion legislation entitles the track to incorporate but also those who would tear down the track and develop the real estate.
In a May 26 story, the Chicago Tribune conservatively estimated that Hawthorne owes more than $100 million. Its more than 200 creditors include simulcast outlets, contractors who did interior demolition work in preparation for the racino that has never materialized, vendors, and the IHHA.
The May 27 ruling by Judge Barnes authorized Hawthorne and a committee of unsecured creditors to subpoena records from Fairmount, the Illinois Department of Agriculture, its director Jerry Costello, and his HBPA lobbyist brother, John.
Hawthorne alleges that under the direction of Jerry Costello, the Department cut its funding by $316,895 and terminated its grant agreement and the track points to “troubling connections” between Jerry and John as the reason.
John has called the allegations false and defamatory and said they will be addressed in court.
