Illinois Harness Horsemen's Association (4/9/13)
A New Gaming Bill and a New Problem
With spring comes warmer temps and yet another gaming bill in the state legislature. The latest bill is SB1739. We are told this bill will fix some of the problems (not horse racing related) that the governor had with previous bills. The good part of SB1739 is that the racino part of the bill is essentially the same as the racino part of the two previous bills that passed both the House and the Senate but were vetoed by Governor Quinn. The bad part of this new bill and the reason for this correspondence is that it legalizes Internet Gaming (I-Gaming) and gives the racetracks and the current ADW license’s an option to attain an Internet gaming license. Why is that bad? Because Illinois horsemen are not included in any potential future revenues from the internet gaming piece of this new bill. What appears crystal clear to us is that the only reason why racetracks and ADW companies exist in Illinois today is because of their relationship with horse racing. The idea that they are being considered for an I-Gaming license without sharing revenue with horsemen is unfathomable. The IHHA and the ITHA (Thoroughbred Association) believe that SB 1739 as is currently written regarding Internet Gaming has the potential to kill horse racing. Yes, you read that right. Without significant change, it potentially could end horse racing in Illinois.
We think the brick and mortar “racino” model that is in SB1739 and took months and months of intense negotiations will be destroyed by SB1739. Consider the following current options handed to racetracks in this new bill. On the one hand, racetracks would have to spend upwards of a hundred million dollars to build a brick and mortar racino, pay tens of millions of dollars to license and purchase the slot machines, pay tens of millions more in gambling taxes, and then share the profits of that revenue stream from those slot machines with horsemen. Additionally, recapture would end with the first dollar generated from slot machines at tracks. On the other hand, in this current proposed SB1739, racetracks can spend a fraction of the racino cost and own an internet casino. Racetracks (internet gaming licensees) would only be required to pay $20 million of their future taxes up front. They would not have to spend hundreds of millions to build brick and mortar racino facilities. They would pay less in taxes on internet wagers than they would on racino wagers. They would not have to share any portion of their revenues with horsemen, nor would they have to guarantee that racing continue, nor would they have to end their purse crippling practice of taking money away from horsemen in the form of recapture. Simply stated, the current version of SB1739 is the death of horse racing in Illinois.
If horsemen are expected to support this legislation then we will insist on the same benefits from an internet casino as we would from a brick and mortar casino. In fact, because the entry point into internet gaming is so much less than the brick and mortar cost, we believe that our revenue share should see a substantial increase in percentage.
In a letter to his membership, Illinois Thoroughbred Horsemen’s Association President Mike Campbell wrote, "Unless SB 1739 is amended to require Arlington to share (I-gaming) revenue with purses, the proposal threatens to radically diminish Illinois horseracing and, in the process, cost thousands of middle class and lower-income workers their jobs, harming the best interests of the state of Illinois and its taxpayers."
The IHHA agrees with Mike Campbell. So, what is it that we want? SB1739 needs to be changed. Either the Internet Gaming language needs to be completely taken out of the bill or it needs to be changed to accommodate horsemen. Over the next few weeks, our two organizations will work arm in arm to have the I-gaming part of the bill changed; if it does not get fixed, horsemen cannot sit idly by and witness another recapture-type effort pass under our noses.
As we get closer to the end of the legislative session (May 31), we will provide regular updates. Please stay informed.