Arlington Contract Finally Inked, New Controversy Erupts Over Hawthorne Stabling

The long-overdue contract between Arlington International Race Course and the Illinois Thoroughbred Horsemen's Association (ITHA) was inked just minutes before a 9 a.m. Monday Illinois Racing Board (IRB) meeting, enabling racing commissioners to finally approve a 30-date summer season at the suburban Chicago track that will run July 23 through Sep. 26.

Racing will be conducted Thursdays through Saturdays, with no open stakes races in 2020, including the track's signature event, the GI Arlington Million. TDN requested purse level specifics from ITHA representatives, but received no response prior to deadline for this story.

By state law, the contract was supposed to have been submitted to the IRB prior to Jan. 1. Acrimonious negotiations delayed the process for months, then the COVID-19 pandemic hit, forcing talks beyond what was supposed to have been a May 1 opening for Arlington.

In the month of June alone, the IRB met four times to vote upon the issue. But each time the agenda item had to be put on hold as the two sides squabbled over details that included how many years the agreement would be for, the daily average purse levels, projections for a 2021 meet, and what might happen in the event of another pandemic or force majeure problem that halts racing.

Monday's IRB meeting was actually a continuation of one that started last Thursday, got recessed into Friday, and then was delayed again over the weekend as the two sides scrambled to come to terms and to also resolve an editing mistake that resulted in several rounds of changes to the contract being lost.

David McCaffrey, the ITHA's  executive director, told TDN in a post-meeting email that the contract is a two-year deal covering 2020 and 2021.

“Next year, I guess, after hearing the testimony of the IRB today, is a bit up in the air,” McCaffrey wrote. “There was a presumption of 65 race days next year, but that may or may not happen. Stakes races [in 2021] will only be funded from the purse account if certain amounts of overnight purse money is generated.”

Following the unanimous vote to award the 2020 dates, IRB commissioners, an Arlington executive, and members of the ITHA took turns thanking and lauding each other for persevering to get a deal done.

“We had our bumps–more than bumps,” Arlington president Tony Petrillo acknowledged.

“If that was his definition of bumps, I'd like to know what an explosion was,” McCaffrey said during the meeting. “But all is well that ends well.”

Yet the newfound calm on the Chicago racing circuit lasted only moments before an entirely different controversy erupted.

The next item on the agenda seemed perfunctory: It was a measure to assign dark-date simulcasting host status to Arlington that had occurred as a result of the track's previous request to suspend the start of the 2020 meet.

But before commissioners could vote on that item, John Walsh, the assistant general manager of Hawthorne Racecourse, was granted time to speak. He told the IRB that in light of Hawthorne agreeing to keep its backstretch open to stable 194 horses that otherwise would have resided at Arlington, Hawthorne wanted either some form of financial compensation or the granting of dark-date simulcast hosting status until Arlington starts running live to make up for incurring that expense.

“We've had our backside open for three months while Arlington did not have theirs open, at a cost of $239,000 per month,” Walsh said. “So to start our [Oct. 2] fall meet, we've got four days of purse money that we received, and that is not enough to sustain a fall meet.”

He added that purses, based on the money that has accrued so far, could sink to as low as $60,000 daily.

“This is the last chance [for the IRB] to equalize what's happened because of COVID virus,” Walsh said.

Petrillo took umbrage with Walsh's request, and over the course of the next hour during testy back-and-forth dialogue among stakeholders, he enumerated reasons why he felt Hawthorne's request was out of line.

Petrillo cited circumstances beyond Arlington's control that prevented its own stabling area from opening, noting that Hawthorne gave those horses a home “upon their own free will.” He cited the pandemic-related stabling costs in other states incurred by Arlington's parent company, Churchill Downs Inc. (CDI), “that will eventually hit our bottom line.” He doubted the veracity of Hawthorne's financial figures, and threatened that changing host status would invite a legal challenge from CDI. And he suggested that instead of the IRB mandating a solution, the two tracks could sit down and “try to pound out a 2021 race meet agreement” to settle the stabling cost differences because “we've always been fair in that process.”

Walsh countered by saying, “I don't believe that there will be any change in next year's agreement between Arlington and Hawthorne, because I don't know that we can have an agreement after their actions this year toward the industry.”

Petrillo said “We don't need any further distractions for moving forward with racing…. Talking about repayment or reparations for damages due to the COVID-19 virus to Hawthorne is just ludicrous.”

Petrillo continued, “Any adjustments…are just going to cause a purse cut here at Arlington. We've already lost $5 million. We're already going to spend another $450,000 to open up our backstretch because of the COVID-19 pandemic….And that has shown our commitment to racing. In addition, I would bet that if you look at the bottom line of each racetrack at the end of the year, Arlington will lose more money than both meets at Hawthorne combined.”

Walsh said that if the IRB granted even 15 dark-host dates to Hawthorne instead of Arlington, the difference would be about $200,000, which he said meant more to the smaller, family-owned Hawthorne than the corporate-backed Arlington. He suggested another alternative could be for Arlington to make a similar-sized payment directly to Hawthorne as a “thank you” for stabling horses that otherwise might have left the state.

Petrillo said based on Walsh's math, that means average purses at Arlington would drop by about $7,500 per day.

“Just to all the horsemen out there, this clearly puts our meet in jeopardy,” Petrillo said. “To penalize the horsemen that are waiting at our gates, that, to me, is not in the best interest of anyone.”

Commissioners seemed to sympathize with Hawthorne's argument, but didn't know how to address it. They discussed alternate methods of funding, and there were periods of silence on the teleconference when IRB chairman Daniel Beiser asked if any board members wanted to take action on the agenda item.

“I know we don't have a pile of money that we're sitting on that we can just throw all at once,” Beiser said. “I don't think anyone would disagree that they've incurred expenses that no one could have foreseen.”

IRB commissioner Marcus Davis moved to assign 15 dates of dark-host status to Hawthorne, but the motion was not seconded.

Beiser then recessed the meeting. When it resumed 38 minutes later, additional testimony was heard. Then the board moved to award the dark-date hosting status to Arlington, as the item originally appeared on the agenda. That vote passed, 5-1.

IRB commissioner Thomas McCauley, who cast the lone dissenting vote, closed the meeting by acknowledging that Hawthorne should be due some sort of future consideration.

“In effect, they took on a burden that would have been Arlington's in both the direct cost and overhead of keeping the backstretch open, which [was a] huge benefit [to] Illinois horsemen,” McCauley said. “I'm not going to forget the contribution that Hawthorne has made. I urge that my colleagues remember it as well, and that we put our heads together with staff to figure out a way to basically honor what they did for the horsemen and other parties.”