CDI Seeks to Sell Arlington Land

The long-term future for Churchill Downs, Inc. (CDI) to continue racing in Illinois involves selling its Arlington International Racecourse land for another purpose and transferring the corporation's racing license to another location.

Bill Carstanjen, the chief executive officer of CDI, outlined the gaming company's desire to rid itself of Chicago's premier Thoroughbred venue in a July 30 conference call with investors. His comments came six days after Arlington's delayed 2020 season opening (because of the pandemic and a bitter contract dispute with local horse people) and one day before 2021 dates applications were due to be filed with the Illinois Racing Board.

Carstanjen was responding to a question from an investment analyst who asked about the gaming corporation's “broad Illinois strategy” with respect to Arlington.

“We reached an agreement with the horsemen [and] we're running the race meet right now,” Carstanjen said, according to an edited transcript of the call posted on Yahoo! Finance. “We'll run a 2020 race meeting. We have an agreement to run a 2021 race meet if we elect to do so. That's not a long-term viable solution for the Arlington Park license.”

Carstanjen continued: “Long-term for Arlington Park, as we've explained on these calls, and [as] we've explained to the state, it doesn't work. The economics don't work. It's not a viable solution. We'd like to give the state, given everything that's going on, an opportunity to help us find a better long-term solution. But the long-term solution is not Arlington Park. That land will have a higher and better purpose for something else at some point.

“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. But for us, 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. “And the time frame for doing that is not something I'm going to comment on this call today, and it's not definitive. But certainly, certainly, it's something that's on our mind on a week-to-week basis, if not a day-to-day basis.”

The relationship between Arlington and the horse people who race on the Illinois circuit has been contentious for several years now. The split widened considerably last August when Arlington management stunned Illinois stakeholders by intentionally missing a deadline to apply for a racino license after more than a decade of working with the Illinois Thoroughbred Horsemen's Association (ITHA) to get the Illinois Gaming Act passed as a way to boost purses via other forms of betting.

Arlington's decision not to pursue slot machines and table games at the track took on heightened controversy because Arlington's corporate parent, Churchill Downs, Inc. (CDI), has an ownership stake in a nearby competing casino and is aiming to open another near Chicago.

Horsemen have stated a belief that CDI doesn't want Arlington competing with its own (and potentially more lucrative) venues. Last summer, CDI cited the racino law's requirement of having to contribute gaming revenues to the Thoroughbred purse account as a competitive disadvantage it did not want to undertake.

The Daily Herald of suburban Chicago obtained a statement on Thursday from the ITHA that stated “For Churchill's CEO to say preposterously that Churchill has been 'patient' with other stakeholders speaks to the height of Churchill's contempt for the elected officials and working families of Illinois. The very least that Churchill could do is be honest about its true intention: the company cares only about maximizing profit and is happy to sacrifice the spirit of Illinois law and the livelihood of working Illinoisans to serve its greed.”

Carstanjen also disclosed on the call that despite applying for a sports betting license in March, Arlington no longer plans on pursuing it.

“Currently, we're not planning on doing sports wagering there through the Arlington license. We're happy to play heavily in Illinois and sports wagering through our Rivers [Casino] license.” That venue is about 10 miles from Arlington and CDI owns a 61% stake in it.

The Daily Herald quoted a rebuke from Tom Hayes, the mayor of Arlington Heights, where the track is located.

“It's very disappointing to hear,” Hayes said. “Certainly, I've never felt Churchill Downs was all that concerned about Arlington Heights and our community at all. I think they're concerned about the bottom line.”