Sunday, July 04, 2010

Pity Flu Invades Illinois

(CHICAGO, IL – July 5, 2010) Pity flu has invaded the bloodstream of Illinois horse racing. The symptoms come on strong so there’s no mistaking the diagnosis. The chronic disease begins with a shortage of horses that makes races not bet-able, moves into a stage where the grandstands are empty and handle is down, and then bursts forth in full fury when lobbyists remind horsemen that legislators are ready for proposals and campaign donations.

The Illinois strain of pity flu appears less virulent than the New York and Kentucky strains. This might be because Midwesterners, by nature, are easygoing – Second City people – while New Yorkers – “You can Make it Anywhere” creatures - are quick to speak out and Kentuckians – polite Southern gentlemen and ladies - tend to say what they feel by saying the opposite. In any case, the Illinois horse racing industry is threatening its own suicide. This is the same tactic that other jurisdictions have implemented in order to get state governments to help them raise revenues.

Ironically, Robert L. Evans, the CEO of Churchill Downs Inc., parent company of Arlington Park, may be partially responsible for producing the petri dish that incubated the new outbreak. Evans reported to the CDI board of directors at its June 17 meeting that he was confident Calder Race Course and Fair Grounds, two CDI properties with added gaming, could fare well and he noted that Churchill Downs with the Kentucky Derby had the operational bandwidth to prosper. Yet, he wouldn’t promise the same rosy outlook for Arlington.

“The future of racing at any track without added gaming is going to be in question,” Evans said to the Thoroughbred Times several weeks ago. “If you think it’s bad now, wait and see in a few years,” he predicted, even though Arlington Park, sans the slot machines, was down less than one percent in pari-mutuel revenues in 2009. “If we get to the point where you know ‘not racing’ is the best answer, well, that’s the best answer,” he told Gregory A. Hall of the Louisville Courier-Journal.

Evans’s abandonment of horse racing isn’t the first time that Arlington Park has quit in the face of competition. In 1998, before Richard L. Duchossois sold the track to Churchill Downs in a transaction that made him its largest shareholder, Arlington Park shut down completely for two years. And how did that all work out? Not so special.

In a move that proved subsequently damaging, Duchossois told the State that he wouldn’t present racing again until something was done to counteract unfair riverboat casino competition. The State yawned, Arlington closed, and Hawthorne Racecourse, Sportsman’s Park and even Balmoral took up Arlington’s prized summer dates, producing slightly-below comparable handle. Consequently, business at the posh suburban track has never rebounded from its ill-advised sabbatical.

Horse racing fans have to go back decades to recall racing in the Land of Lincoln at its peak. In 1996, Cigar ran his undefeated streak to 16 in the Arlington Citation Challenge. In 1981, Arlington staged the first Million – a pioneer horse race with seven-figure purses. In 1973, Secretariat thrilled a packed house with an easy victory in the Arlington Invitational. Dr. Fager, carrying 134 pounds, ran a mile in 1:32 1/5 in the 1968 Washington Park Handicap. In 1955, Nashua beat Swaps in a match race at Washington Park before 35,262 fans. Chicago racetracks represented the epitome of summer thoroughbred racing before then. How far off the map they have fallen.

Despite its history, Mike Campbell, president of the Illinois Thoroughbred Horsemen's Association, told FOX Chicago News, “I believe it could all go away if we don’t get help from legislation.” A vote for racinos will come up in the fall, he predicted. But, in the meantime, Campbell is keeping the pressure on by reminding everyone how bad things have gotten. For example, 20 years ago, Illinois purses approached $100 million. Today, they amount to only $73 million.

Alas, racino advocates have projected that installing video poker and slot machines at the tracks will cause a rebirth. They claim the move will allow them to raise purses, add 1500 jobs and contribute as much as $300 million to the state’s annual tax fund. The Illinois budget is facing a $5.8 billion deficit. As for thoroughbred racing, it’s averaged $670 million in handle over the last 20 years. Yet, it’s averaged only $598 million the last five.

Regardless of the promises, Tom Swoik, a representative of the Illinois Casino and Gaming Commission, is leading a well-funded lobbying effort to block the racinos. “The gains will not offset the losses that will occur at casinos,” Swoik warned legislators. He has criticized the horse industry for overstating the facts, pointing specifically to one claim that’s irrefutable. Initially, the horse racing industry claimed that about 15,000 jobs were in jeopardy if horse racing ended. Now their forecast is 40,000 – a total not in the least bit surprising, considering that pity flu gets worse before getting better.

Evans, too, is not wrong in saying that horse tracks will perform better financially with income streams from complementary gaming. But he may be speaking on behalf of only one or two constituencies – his very own and the breeders who can’t sell their products unless there are places to store them.

To the pure fans of horse racing - a group that Churchill Downs seems interested in only tangentially, the placement of casinos on horse racing’s turf seems a little like filling the undercard of a championship boxing bout with mixed martial arts matches so that people will come for the sideshow. Employing a cure such as this may cause pity flu to subside. But a more dangerous, incurable disease might set in.

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