No Offers in Pipeline to Buy Arlington; No Budge in Contract Stalemate

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Arlington | Coady

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Purse contract negotiations between the Illinois Thoroughbred Horsemen’s Association (ITHA) and Arlington Park remain deadlocked three weeks after missing a state-mandated deadline to have one in place for the 2020 meet.

Despite the issue taking center stage with 90 minutes of testy back-and-forth debate at Tuesday’s Illinois Racing Board (IRB) meeting, the two sides appear no closer to bridging the gap, which chiefly hinges on a daily average purse figure of $130,000 versus $200,000 for the 68-date, May-through-September meet.

IRB chairman Jeffrey Brincat did underscore on Tuesday that the horsemen and Arlington are both now considered to be in violation of a portion of the Illinois Gaming Act that passed last June, with “both potentially subject to remedies…including monetary fines for both parties.”

But Brincat added that the board will be holding off on any sanctions for the time being in light of the fact that the state-mandated deadline for having a purse contract in place is a new law that just went into effect for the 2020 season, and that the stalemate represents uncharted territory for everyone involved.

One on-the-record assertion that did get clarified is that Arlington’s parent company, the gaming firm Churchill Downs Inc. (CDI), is not in receipt of any offers by another party to purchase the track. Tony Petrillo, Arlington’s president, responded to an under-oath question about a possible sale by responding that no deal is in the pipeline.

So absent any third-party savior rushing in to smooth over the situation by buying Arlington and presumably offering the horsemen more favorable terms, the two groups will continue to fight through a contract as Opening Day looms.

“This is a private contract between these two parties…. This is the first year of the new constraints with respect to a year-end deadline for a contract,” Brincat said. “We’re [beginning the process] in January, so if we need to address this” in February or March with fines or sanctions, the IRB can.

“It’s kind of like North Korea,” Brincat added, using the analogy of that country’s complex and difficult nuclear missile diplomacy negotiations with the United States. “Nothing’s off the table.”

Although in actuality, some topics were ruled off the table by Brincat on Tuesday.

These included most references to how the snag first started last August, when CDI stunned Illinois horsemen by intentionally missing a deadline to apply for newly legalized racino licensure that would have bolstered purses at the track. That decision has taken on added controversy because CDI has an ownership stake in a nearby competing casino, and the firm has stated an intent to open another gaming facility near Chicago.

When Kerry Lavelle, an attorney for the ITHA, testified how the state’s gaming landscape changed dramatically when CDI invested in the competing casino, he was cut short by Brincat, who had said prior to taking up the agenda item that he would not be allowing that topic to be considered during the purse contract negotiation updates given by both sides.

“Sir, that’s a hypothesis,” Brincat said. “I don’t think it’s the role of the ITHA or its members to pontificate with respect to Churchill’s plans or to Arlington’s plans.”

Lavelle replied that he wasn’t hypothesizing—he was reciting facts about a relevant business decision that has already come to pass.

Again, Brincat interjected: “This is not germane to the existence of a contract. And the point is, the organizational licensee is Arlington. It has been Arlington [as opposed to CDI]. And again, to open up this avenue of questioning invites propositions that I don’t think are beneficial for any party…. I think we’re walking down a very dangerous road when we try to speak to the motivations of others.”

ITHA president Michael Campbell tried a different angle. He pointed out how the horsemen have proposed numerous ways to reach an agreement. These include 1) Arlington foregoing the “recapture” money it is allowed to reclaim from the purse account under certain circumstances related to handle; 2) Restructuring the stakes schedule so more money instead goes to overnight purses, or 3) Setting up a quasi-loan that would repay Arlington the purse money it puts up if the track changes its mind to apply for racino licensure.

“We’re not saying do away with the [GI Arlington] Million. On the contrary, we’re saying run the Million,” Campbell said. “But at the same time, we’re saying the Beverly D. [S.] and the [GI] Secretariat [S.] are [very heavily funded] races. Maybe someone ought to take a look at that and decide if the affordability [reflects the] present conditions.

“This is an apportionment issue,” Campbell continued. “That balance between a healthy stakes account and a healthy purse account. We can meet in the middle somewhere. It doesn’t have to be all one thing or all of another. Otherwise we’re definitely going to hurt the majority of horsemen that practice their trade in Illinois.”

Petrillo, Arlington’s president, had a different view of the sticking points in the negotiations.

“I’m just going to be very frank. We’ve had unreasonable demands from the ITHA,” Petrillo said, noting that the horsemen’s desire for a $200,000 daily purse average “would result in losses to Arlington. They’re unrealistic in this economic environment within our industry. It would cripple us.”

Lavelle later retorted: “Please do not buy into [Arlington’s] narrative of ‘demand, demand, demand’. They’ve used that word countless times when they’ve been before you…. We are not looking for that, and instead are looking for solutions and pathways that would not [equate to guaranteed purses].”

“There are options out there,” Lavelle said. “We spent four hours one day talking about this issue. And at the end of it, they said, ‘Here’s the offer. Let’s use last year’s contract.’ It went nowhere. That got us nowhere.”

IRB commissioner Thomas McCauley told the ITHA that “I do want to impress on you that there’s a lot of sympathy for the purse situation.” But he added that the more effective long-term plan for horsemen might be trying to get changes made at the state level instead of at the IRB level.

“I guess my main point is that if you need relief, we can only do so much,” McCauley said. “Everybody would love to see the overnight purses double or triple, and get back to the days when Illinois racing was right up there, arguably, with New York, Florida, California, Kentucky. That would be glorious, and I really thought that was going to happen, to tell you the truth, when this Gaming Act passed.

“I can’t imagine anybody’s happy with [the low purses being offered by Arlington],” McCauley continued. “So again, we’re limited in the relief that we can give…. If we could give it to you, we would. I think I can say that with confidence for the board, because there is definitely an understanding and sympathy for the dire situation.”

In other IRB business, the board unanimously voted to move ahead with rewriting state rules on whipping in harness races, but unanimously voted to table a motion to make similar restrictions to Thoroughbred whipping rules, citing a need to study the situation further.

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