Even After COVID-19 Restrictions Are Lifted, Illinois Racing Will Have A Mountain To Climb For Survival

In a meeting held via teleconference on Friday, the Illinois Racing Board approved a request to postpone the start of Arlington Park’s summer meet, which was originally set to begin next week. No specific date was set for the meet’s return, and Arlington officials appearing on the teleconference declined to name a target start date or a deadline by which they would decide if a meet will take place at all.

Arlington was granted host track status until the Board’s next meeting May 22, meaning it will be the recipient of proceeds from OTBs if they reopen during that time.

On Thursday, Illinois Gov. J.B. Pritzker extended stay-at-home orders for the state through the end of May.

The status of a 2020 meet at Arlington Park is more complicated than when COVID-19 restrictions will be lifted, however. Even before the coronavirus pandemic, the track and horsemen had been unable to reach a final agreement on what the 2020 meet should look like. The crux of the disagreement had been the desire of Churchill Downs, Inc., owner of Arlington Park, to allocate more money to stakes races on Arlington Million day and the horsemen’s desire to devote more to the overnight purse account.

David McCaffrey, executive director of the Illinois Thoroughbred Horsemen’s Association, said it had seemed they may have been rounding the corner on that issue before COVID-19 broke out, although there were still details to be worked out about the length of the 2020 meet. There was also the matter of CDI wanting a two-year agreement between the two groups, which ITHA was not comfortable with.

Tony Petrillo, president of Arlington Park, said it’s possible the track could push for a shorter, month-long race meet and that management has considered how it could host live racing without spectators.

Now, the ITHA says, even if they could work out terms with Arlington, the point is moot – the purse accounts are depleted.

Purse accounts in Illinois have been subject to a practice called recapture since the 1990s. A wagering dollar spent in an Illinois OTB versus on-track is allocated slightly differently, and track ownership gets a smaller piece of the dollar when the money is bet off track. When simulcasting was first permitted in Illinois in the mid-1990s, tracks got a provision written into state law that they may “recapture” a portion of the money deposited into the purse account from simulcast wagering to offset this difference.

The amount of recapture that the track is owed is based on the total simulcast wagering from the previous calendar year.

McCaffrey told racing board members Friday that Arlington is owed about $4.5 million in recapture based on last year’s wagering figures. The amount in the Arlington purse account now is $4.1 million. McCaffrey estimates that by the time a meet could likely start, that figure may be up to $4.5 million – and Arlington would be within its rights to take the lot, starting a meet off with zero purse funds.

Things are worse for the Hawthorne meet later this year. Arlington had host track status, meaning the racetrack portion of takeout from OTB wagers went to Arlington from January to early March. Hawthorne took over host track status in March, just before the OTBs shut down due to COVID-19 – so for most of the time its purse account should have been building up money, there was nothing coming in from OTBs. This means the Hawthorne purse account is lower than it normally would be – and even optimistic projections suggest it will contain less than the recapture it owes to the track by the start of its Thoroughbred meet in the fall.

In the meantime, Tim Carey, president and CEO of Hawthorne, said the track is losing money as it remains open for training for both Thoroughbreds and harness horses. Arlington’s backstretch has not been reopened, so there’s little chance of Hawthorne shipping those Thoroughbreds out.

Carey estimated Hawthorne has lost 41 host days, 17 of which were meant to be live meet dates. That’s cost $1.1 million on commissions and $2 million that should have gone to Thoroughbred purses so far this year.

“No other racetrack in the country has that situation other than us,” Carey said.

Carey also expressed concern that with over 400 people on the backstretch caring for horses, the track could attract attention and concern about their ability to maintain social distancing and prevent a coronavirus outbreak.

Even after stay-at-home orders are lifted, Carey is worried some OTBs may not reopen if they can’t afford to continue paying overhead during the closure. If the state loses live race dates, he questioned what financial impact that could have on the racing board.

Hawthorne management had requested the racing board establish a “working equalization group” to troubleshoot its dire financial situation and change the allocation of host track dates, presumably giving more to Hawthorne to make up for its losses. The board unanimously agreed to look into creating such a working group and provide a report in May.

The post Even After COVID-19 Restrictions Are Lifted, Illinois Racing Will Have A Mountain To Climb For Survival appeared first on Horse Racing News | Paulick Report.

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