Churchill Downs CEO floats possible sale of Arlington Park: ‘That land will have a higher and better purpose’

Arlington International Racecourse, pictured in August 2012. | Sun-Times file

As Hawthorne Race Course moved forward with plans for a sportsbook and “racino,” the corporate owner of the Chicago area’s other racetrack cast its future further in doubt.

The horses returned to Arlington Park last week, but all bets are off when it comes to how long they’ll keep racing there.

After the coronavirus nixed the start of the season — and contract negotiations with the state’s horse trainers delayed it further till July 23 — the chief executive of the storied northwest suburban racetrack’s corporate owner suggested to shareholders Thursday that it could be sold, saying “the long-term solution is not Arlington Park.”

“That land will have a higher and better purpose for something else at some point,” Churchill Downs Inc. CEO Bill Carstanjen said during a quarterly earnings call. “But we want to work constructively with all of the constituencies in the market to see if there’s an opportunity to move the license or otherwise change the circumstances so that racing can continue in Illinois.

“We’ve been patient and thoughtful and constructive with the parties up in that jurisdiction, but long term, that land gets sold, and that license will need to move if it’s going to continue,” Carstanjen said, adding that nothing is “definitive, but certainly it’s something that’s on our mind.”

The fate of the track has been up in the air since last summer, when Churchill Downs first threatened to move Arlington’s racing license as it announced it was passing on applying for a casino license as authorized under a massive gambling expansion law signed by Gov. J.B. Pritzker.

Trainers represented by the Illinois Thoroughbred Horsemen’s Association viewed that as the ultimate stab in the back after decades of lobbying alongside Arlington’s owners in Springfield for just such legislation, but the Louisville-based gambling corporation complained the taxes on “racino” table games and slot machines are too high.

Churchill Downs hasn’t committed to racing at Arlington beyond 2021. After months of contentious negotiations, the track last month reached a two-year agreement with the horse trainers.

But Carstanjen appeared to hedge even on that Thursday, saying the track has an agreement to race in 2021 “if we elect to do so. That’s not a long-term viable solution for the Arlington Park license.”

And after Arlington previously applied to the Illinois Gaming Board to open one of the state’s first legal sportsbooks, Carstanjen said they’re giving up that pursuit because “we’re happy to play heavily in Illinois and sports wagering through our Rivers license.”

Ashlee Rezin Garcia/Sun-Times

Churchill Downs also owns nearby Rivers Casino in Des Plaines, the state’s most lucrative gambling mecca that has grabbed an early chokehold on Illinois’ nascent sports betting industry. Rivers launched the state’s first retail sportsbook in March — just days before the COVID-19 pandemic gripped the state — and then last month took the first bets through its online sportsbook.

Rivers is sure to have a leg up for some time on the online market, which accounts for the bulk of the handle in other states where sports betting has been legalized.

As part of his coronavirus disaster proclamation, Pritzker issued an executive order last month allowing for bettors to register online for mobile sports betting accounts, as opposed to in person in a casino as required under Illinois’ law.

After a month of bettors registering online with Rivers, Pritzker in his latest disaster proclamation let that in-person registration suspension expire Monday — just as mobile betting giant DraftKings appeared poised to dodge the “penalty box” period baked into Illinois’ gambling law for online-only sportsbooks, and enter the Illinois market through a co-branding agreement with the Casino Queen in downstate East St. Louis.

Pritzker’s office said that because “casinos have resumed in-person business, there is no longer a need to suspend provisions of the law that require in-person registration.”

Rivers won’t have a monopoly on the Chicago-area market much longer, though.

While Arlington’s owner floated that racetrack’s eventual departure, Chicago’s other nearby track — Hawthorne Race Course in Stickney — received Gaming Board approval for its sportsbook through PointsBet USA, and an approval of “preliminary suitability” to move forward with its racino development.

“It’s really hard to put into context what this means for the very hardworking people of the Illinois racing industry,” Hawthorne CEO Tim Carey said in a statement. “It means horsemen will be able to keep their businesses and families in Illinois. It means showcasing this historic sport to a new generation of fans. It means creating a truly unique, first-of-its-kind entertainment experience that won’t exist anywhere else in Illinois.”

Meanwhile at Churchill Downs, Carstanjen said the corporation is “optimistic” about its bid to open a new casino in Waukegan — and didn’t rule out making a run for the Chicago mega-casino that’s also part of Illinois’ gaming expansion.

“We’ll have to wait till the city acts,” he said, referring to proposals Chicago officials are expected to solicit. “But certainly we have some advantages of knowing the market and being familiar with the jurisdiction.”