Churchill Downs Inc., the owner of Churchill Downs racetrack, has cast doubt on the future of horse racing in Illinois. Late last month, the company decided not to ask for a casino license for its premier track, Arlington International Racecourse. The company’s decision not to apply for a license sends a troubling signal for the future of Illinois horse racing.
The Fall of Horse Racing in Illinois
At one time, horse racing was the only form of legal gambling in Illinois. Thousands of people used to flock to racetracks to watch the horses run. Horse racing used to be the sport for the rich and going to the tracks was something people aspired to. Millions of people turned on their televisions to see horses run in derbies, stakes races, and Triple Crown races. Now, horse racing is facing a crisis. First, it’s an expensive sport to maintain. Thoroughbred horses are expensive to buy, and their upkeep is costly. Owners have to pay the jockeys and the trainers. When the money was flowing in, it was easy to maintain the racetracks and offer big purses to the victors.
However, fewer and fewer people are going to racetracks. Instead, people are visiting casinos, placing bets on sportsbooks or gambling online. Horse racing is no longer prestigious unless it’s a Triple Crown race. With fewer people going to the racetrack, the prize money, or purse, becomes smaller or smaller. Smaller purses lead to smaller crowds.
Another problem with Illinois’ racetracks is that many people don’t believe that horse racing is humane. People have protested the treatment of the horses at racetracks. People also don’t agree with horse racing as a sport. All these factors have contributed to its decline.
Churchill Downs Inc.
Churchill Downs Inc. (CDI) began as a single racetrack in Kentucky, the home of the Kentucky Derby. Churchill Downs owns 10 gaming properties in the Midwest and Mid-South region. Many of the properties the company owns are racinos. Racinos are horse racing tracks with slots and table games.
Earlier this summer, the Illinois General Assembly approved a bill that would allow six new casinos in the state. It also legalized online and on-site sportsbooks. The state also decided that racetracks could become racinos by adding slots and table games.
The Bleak Forecast
Illinois has approved licensing of racetracks for casino use. Many horse tracks in the state are hoping for casino revenue. Some states use casino money to beef up purses and boost attendance at racetracks on racing days. However, CDI said after some consideration, it has decided not to apply for a license for Arlington International Racecourse. The company said it would not apply for a casino license to install slot machines or table games. It doesn’t believe it will get a good return on its investment.
One reason the company doesn’t believe adding casino features will make the racetrack successful is the tax structure for Arlington. Because the racetrack’s revenue is already taxed by the thoroughbred purse account, it boosts the track’s tax rate. The additional tax liability pushes the tax burden to a level that is 20 percent higher than casinos. This makes it unlikely CDI will be adding slots and table games to the track.
CDI said it plans to offer horse races at Arlington in both 2020 and 2021. However, the company also said it would make no promises about horse racing opportunities at Arlington beyond 2021. The company said it knows about all the problems with horse racing. CDI said since Illinois changed its laws, making a profit from racing has become impossible. None of this sounds good for the Arlington track.
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