Churchill Downs Incorporated (CDI) has confirmed that its Arlington International Racecourse facility in Arlington Heights did not apply to the Illinois Gaming Board for a slot machine and table game license under the recently enacted Illinois Gaming Act. 

The announcement was met with a critical riposte from the Illinois Thoroughbred Horsemen’s Association (ITHA) which said it was disappointed and astounded at the decision. But according to CDI, the returns from slot and table gaming simply do not justify moving ahead with a license under current economic conditions. 

CEO Bill Carstanjen explained: “Notwithstanding our steadfast commitment to the Illinois Thoroughbred racing industry and despite the good faith intentions of everyone involved in the passage of the Illinois Gaming Act, the economic terms under which Arlington would be granted a casino gaming license do not provide an acceptable financial return and we cannot responsibly proceed.”

He added: “The Chicagoland market has seen a significant proliferation of video gaming terminals over the last several years and now faces the potential introduction of five new gaming facilities as well as increased gaming positions at existing casinos and video gaming outlets. 

“Arlington would enter this market with an effective tax rate that would be approximately 17.5% – 20% higher than the existing Chicagoland casinos due to contributions to the Thoroughbred purse account. 

“This disadvantage in a hyper-competitive gaming market, coupled with substantial licensing and reconciliation fees and new, unviable horse racing requirements in the Illinois Gaming Act, makes construction of a casino at Arlington financially untenable. It is with a heavy heart that we conclude that we can’t make this work.”

CDI noted, however, that Arlington will conduct horse racing in 2020 and 2021 and apply for a sports betting license while longer-term alternatives are explored. “CDI and the team at Arlington will continue to work with legislative and community stakeholders, as well as Arlington’s customers, employees and horsemen to find a solution that takes into account the many constituents across the State of Illinois who depend on horse racing for their livelihoods,” said the firm. 

All options will be considered, it added, including moving the racing license to another community in the Chicagoland area or elsewhere in the state.

A statement issued by ITHA in response read: “We are stunned and profoundly disappointed by Churchill Downs’ decision not to pursue supplemental gaming at Arlington Park in order to do its part to grow jobs and economic opportunity for thousands of Illinois men and women both at the track and throughout the state’s agribusiness community.

“For more than a decade, Arlington has lobbied Illinois governors and legislators for permission to offer casino-style games as a means to boost revenue at the track and generate funds to significantly improve the quality of horsemen’s purses. Indeed, Arlington in recent years elevated its lobbying push by insisting that the track be granted the authority to offer table games – in addition to slots – to ensure its racino would be economically feasible.

“Yet now that it is finally poised to operate both slots and table games, as a direct result of the gaming law recently approved, Arlington’s parent Churchill Downs has, astoundingly, declined to apply for the license necessary to operate a racino. The company evidently plans to instead abandon its commitment to racing in Illinois and focus solely on its stake in the Rivers Casino and potentially other Illinois casinos not yet developed.” 

“As a consequence of its abrupt change in course to the detriment of this state and its taxpayers, Churchill immediately should be denied the enormous financial advantages it enjoys by virtue of its now-annulled commitment to Illinois racing.

“Those include Arlington’s considerable property tax break ($2.47m this year), the track’s recapture subsidy ($4.47m in 2019 alone, straight from horsemen’s purses), and the chance to apply for a sports betting license linked to Arlington (a form of gaming that will do nothing to benefit purses).”