Preface to Chicagoland racing shutdown?

by Neil Milbert

The handwriting is on the wall and at first glance it appears to be ominous for the Chicagoland harness and thoroughbred racing communities.

Bankrupt Hawthorne Race Course has notified the Illinois Department of Commerce and Economic Opportunity that it will terminate 290 employees if it is sold to a land developer rather than a buyer who wants to perpetuate racing.

That would leave the Chicago metropolitan area without a racetrack for the first time since betting on thoroughbred racing was resurrected by the Illinois legislature in 1923 after a hiatus of more than three decades.

In 1946 Maywood Park inaugurated pari-mutuel harness racing in the state.

The current situation isn’t quite as dire as it seems. Advance notice of potential layoffs is required by the Department of Commerce and doesn’t necessarily mean the track, which has both thoroughbred and harness racing, will go out of business and will be demolished by a land developer.

According to the Chicago Tribune, Strauss Borelli, a class action law firm in Chicago, is investigating whether Hawthorne violated federal law by filing its layoff notice less than the required 60 days before potential layoffs on July 30. If so, under Chapter 11, employees may be entitled to 60 days of severance and benefits.

“They’re only talking about jobs at the racetrack and off-track betting parlors,” said Illinois Harness Horsemen’s Association (IHHA) executive director Tony Somone. “That 290 doesn’t count horsemen. While we haven’t lost our jobs our racing opportunities are like jobs and work days. People have had to go out of state to race — we have them in Minnesota, Indiana, Ohio, and Kentucky.”

Confronted with a reported $138 million in outstanding debt owed more than 200 creditors, Tim Carey, president of the 135-year-old track — whose family ownership of dates back to 1909 — filed for Chapter 11 bankruptcy on Feb. 27.

All 14 of Hawthorne’s Suburban Downs harness dates in January and February were canceled because of its inability to pay its debts and its license was suspended by the Illinois Racing Board on Jan. 26.

If the suspension is lifted, harness racing is tentatively scheduled to resume with a Nov. 6-Dec. 27 meeting.

Meanwhile, Hawthorne is conducting an April 19-Nov. 1 thoroughbred meeting that began three weeks later than originally scheduled as a consequence of the track’s financial crisis.

At the Racing Board’s June 15 meeting, Carey reiterated that he is considering offers from both prospective buyers who want to continue racing and add the dormant casino gambling component that was legalized by the state legislature in 2019 and land developers who would demolish the track.

In the summer of 2020, the Illinois Gaming Board gave Hawthorne permission to add the racino and Carey announced it would be a $40 million project but he has been unable to secure funding after assuring the Racing Board time and again every year since then that it was imminent.

Carey said he is hoping for a buyer who will continue racing and enable him to play an active role in the restructured organization.

However, there are several things that may make a prospective racetrack buyer/casino developer think twice.

It’s doubtful that the buyer would want the individual under whose stewardship Hawthorne was overwhelmed with still unpaid debts involved in the decision-making process.

Because of President Trump’s tariffs and inflation, a racino addition will cost considerably more than it would have in 2020.

At that time Hawthorne, in near south suburban Stickney, would have gotten a head start on the casinos in Chicago and other suburbs that were made possible by the big 2019 gaming expansion law. Now, the casino gambling market may be nearing saturation.

“They’ve lost every advantage they’d have had by opening early,” said the IHHA’s Somone. “The new casino in [south suburban] Hazel Crest is doing terrifically; it’s the No. 2 grossing casino [in Illinois].”

Bally’s has a temporary casino in downtown Chicago and will have a lavish permanent location in a few years. The same holds true for Waukegan, a city just beyond the suburbs near the Wisconsin border. And Aurora, a city in the far western suburbs, is about to open an opulent land-based casino that is replacing the original riverboat casino.

“What I don’t know is if Tim Carey is able to accept a lesser offer from somebody who wants to keep Hawthorne as a racetrack and add a casino than an offer from a real estate company that is the highest bidder,” Somone said. “As long as the bid covers the debt, I think he is able to do that.

“I do know there are [racetrack/casino] people out there kicking the tires but we have not been made privy to anything. It’s difficult but not impossible for them to have a racino. We’re just crossing our fingers.”