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Author Topic: Wonder what will happen now......  (Read 4325 times)
Jim C
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« on: July 09, 2006, 11:43:42 PM »

Interesting development racing fans, from what I understand CDI/AP has bought the note Sportsmans had outstanding. This would now mean the Sportsman's owners owe CDI/AP all outstanding debt and technically would make CDI the owners until the debts are paid off.

This could get VERY interesting when dates are applied for in Sept. Look again for AP to ask for 4 days a week until July then go to 5 days through Aug then back to 4 until closing the end of Sept. Maybe even Sports/Haw. will run 3 days a week at the start and then go to 4 or 5 through May. Wonder who will be doing the dates app. for Sportsmans....that will be the question as CDI could always call in the note if they do not like the dates that Sports/haw is going for. And then there were 2.......
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Valuist
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« Reply #1 on: July 10, 2006, 07:56:27 AM »

Now if only Sportsman's can go back to a 5/8ths oval.  Everybody loved that track.  Worst thing they ever did was make it a 7f track that looked like a stretched out rubber band; 2 hairpin turns and straightaways that were too long.
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big wally
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« Reply #2 on: July 10, 2006, 08:38:21 AM »

Was Sportman"s Debt public Debt? What are the terms of debt and were there side agreements on this purchase? When CDI issues their financials we may have a better idea want is going on.  These tracks owners cant  get along with themselves, consolidation of dates and track owners is on its way.
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Sir Blockheadd
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« Reply #3 on: July 10, 2006, 09:10:13 AM »

debt does not equal ownership, it equals creditor.

equity, stock = ownership.

the note cannot be called unless it is callable.
most debentures have due dates.
the note could be refinanced by the equity holders by obtaining a new note to pay of the old one.
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big wally
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« Reply #4 on: July 10, 2006, 10:48:48 AM »

If the debt is callable and the NJC cant pay... I think their are two options Options 1 declare bankruptcy and if this happens no way will the racing board issue them dates.... Option 2- Give the debt holders an equity interest and if this happens AP/CDI could become the majority owner... Bidwell still owns a small amount of CDI Stock.... So, if JIM C is correct CDI will have to make the debt purchase public... Interesting if Jim C has his facts straight .. another option is to negotiate new terms on the note, thinking about it more there could be many more options since they are merged with Hawthorne
« Last Edit: July 10, 2006, 02:51:47 PM by big wally » Report to moderator   Logged
Sir Blockheadd
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« Reply #5 on: July 10, 2006, 12:11:23 PM »

If the debt is callable and the NJC cant pay... I think their are two options Options 1 declare bankruptcy and if this happens no way will the racing board issue them dates.... Option 2- Give the debt holders an equity interest and if this happens AP/CDI could become the majority owner... Bidwell still owns a small amount of CDI Stock.... So, if JIM C is correct CDI will have to make the debt purchase public... Interesting if Jim C has his facts straight .. another option is to negotiate new terms on the note, thinking about it more their could be many more options since they are merged with Hawthorne

you forgot option three,

refinance the old note with a new lender, and repay the old note.
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big wally
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« Reply #6 on: July 10, 2006, 12:35:34 PM »

you forgot option three,

refinance the old note with a new lender, and repay the old note.

yes, another possiblity. My guess, the new lender would want a  much higher interest rate...
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Trackman
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« Reply #7 on: July 10, 2006, 01:00:51 PM »

Wow! This not a knocking post--I'm impressed with the business knowledge. Will one of you guys handle my 401K investments?
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BeauNarro
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« Reply #8 on: July 10, 2006, 02:45:13 PM »

From my understanding (and I was still working at Hawthorne) of the merger with Hawthorne and NJC - the approximately $35,000,000.00  at 10% interest that they still owed after selling the property to Cicero - was a seperate entity to the merger details which created Hawthorne National LLC (the umbrella management company).
So, if in fact CDI/AP bought the note and NJC defaults on their payments and they are deemed insolvent by a court - then they by Illinois law could not get racing dates. Also, in the contract with Hawthorne I believe there is a clause which stipulates that if NJC can't get dates the merger contract can be voided immediately. That would be the best thing that could happen to Hawthorne. Since the merger they have steadily gone further and further down hill in attendance, handle and service for ALL areas. They also still have well over 25 more people on the payroll since before the merger - some making quite a lot of compensation.
Jim C. - where did you hear this? Was it in print or verbal?
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RunSuckerRun
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« Reply #9 on: July 10, 2006, 02:57:05 PM »

Since everyone is getting Machiavellian here....

What if Hawthorne is orchestrating all of this?  Maybe they've set things up to get their partners out of the business since NJC complained about how much money Hawthorne spent to improve the facility.  Hawthorne doesn't give a damn about how many days per week AP runs over the summer.

-RSR
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BeauNarro
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« Reply #10 on: July 10, 2006, 03:45:46 PM »

After talking with an old friend from Hawthorne - here's another scenario - CDI/AP demands that NJC race their dates at AP instead of Hawthorne. That would void the merger. Now Arlington could run less races/days per week beginning in early/mid April and then extending to late October. This of course would devestate Hawthorne, but who cares - they don't anymore...
« Last Edit: July 10, 2006, 03:58:07 PM by BeauNarro » Report to moderator   Logged
BeauNarro
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« Reply #11 on: July 10, 2006, 04:01:52 PM »

Ahhh..perhaps that's part of the master plan. The Carey heirs get bought out by AP/CDI because they are tired of all the hassles since Tom Senior stepped down. The family gets a big slice of pie for each beneficiary who can invest/spend as they want, and AP/CDI would manage/race the southwest track on dates they don't want, and would also have the power to persuade the racing board to give them more harness dates over the summer.
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David
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« Reply #12 on: July 10, 2006, 05:54:27 PM »

The last post of Beau makes the most sense, but I wonder if Churchill would even want to run any t-bred dates at Hawthorne, perhaps just making that harness might make the most sense that would allow purses to get built up with less racing which might be a good thing for all considered.

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BeauNarro
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« Reply #13 on: July 10, 2006, 05:59:24 PM »

I heard that Tim Carey and Mr D. had a closed door private meeting for over 4 hours a month ago...interesting....
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big wally
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« Reply #14 on: July 10, 2006, 07:49:53 PM »

Why even Keep Hawthorne  Open for Harness all you gonna get is three months..Close it down and use it to Stable all the t-breds..DD could sell part of the stable area and training track he still owns to free up money for his heirs.. AP could still have some barns open for the out of town trainers they covet and some of better locals and have the rest of them Full time at HAwthorne.... Another question what happens to the OTB's owner by Intertrack Partners
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Jim C
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« Reply #15 on: July 10, 2006, 10:44:16 PM »

Well first of all you cannot own an OTB if you do not have a track so after 2 years Sportsmans would be out. You still have Hawthorne and the harness guys so not sure if AP would get a piece of the deal or not.
But now it is starting to make sense why AP may not apply for the Derby weekend if they are in on Sportsmans.
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David
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« Reply #16 on: July 11, 2006, 01:25:58 AM »

Well first of all you cannot own an OTB if you do not have a track so after 2 years Sportsmans would be out. You still have Hawthorne and the harness guys so not sure if AP would get a piece of the deal or not.
But now it is starting to make sense why AP may not apply for the Derby weekend if they are in on Sportsmans.

Quad City Downs exception?
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big wally
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« Reply #17 on: July 11, 2006, 05:25:41 AM »

Quad City Downs exception?

I think the IRB considers QCD a race track.
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BeauNarro
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« Reply #18 on: July 11, 2006, 07:22:46 AM »

Isn't QCD still owned by Mr D???

Here is a scenario- NJC disolves, Maywood converts to a large posch OTB/Entertainment Center (hey sell all excess land where barns, race oval and outer parking once were).
The Johnson family buys Hawthorne property. They convert the turf course back to a 5/8 oval as it was until 20 years ago, but also convert it to a harness surface. Now there would be a long and short track at one venue. That would make the harness community estactic because some horses do prefer a shorter track, and most prefer a mile track. All harness racing would be conducted year round at Hawthorne. Balmoral would only race t-breds in early spring and late fall when Arlington wants to be closed. Maybe 4 day or 3 day race weeks.
The Carey family would pay "rent" to the Johnsons to run at either Balmoral or Hawthorne thus being able to keep their shares of the OTB's. Or they can sell all out to the highest bidder and get out of the game.
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David
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« Reply #19 on: July 11, 2006, 07:30:23 AM »

I would assume QCD would be owned by Chuchill, I would assume it was part of the AP sale, they do use Churchill branding of Trackside OTB and stuff that they have going there now.

Beau's whole scenario makes very good sense, I'm not into harness but I know that the harness guys absolutley love Hawthorne as it is and with dual tracks that would even make it more attractive
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big wally
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« Reply #20 on: July 11, 2006, 07:36:28 AM »

Harness guys would love it. But, why in the Hell would we want t-breds dates at Balmoral.. Nobody would want race  tothere.. on-track handle as poor as is would plummet at Balmoral
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David
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« Reply #21 on: July 11, 2006, 07:41:37 AM »

Not my idea but what envisioned was a lower key meet, basically just a local outlet for the times AP didn't want to race to keep the local horsemen happy.
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BeauNarro
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« Reply #22 on: July 11, 2006, 07:42:50 AM »

wally,

In this scenario it would only be to keep the Illinois horsemen here in Illinois. Balmoral did have T-breds for decades until somewhere around the 1980's (can't remember when t-breds left there). And believe me, if thare was t-bred racing 3 or 4 days a week in spring and fall - they would have good fields there.
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jimk
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« Reply #23 on: July 11, 2006, 08:03:47 AM »

You guys might be correct in part or in whole between all of the different visions for the future of Il. racing. I honestly see it a little differently. I think the only reason AP hangs around at all is for the prospect of getting their foot in the door for slots. I don't say slots for the sake of racing, I say slots for the sake of slots. The racing at AP now can't finnancially support the cost of running that place one end of the year to the other. The racing produt and thus the handle and attendance are not heading in the direction that they need to forcast future growth and stabillity. If we all take a step back and look at AP and what it offers today and what it offered just ten or fifteen years ago we can't help but to see a decline to where the racing product has declined to the point where it would take a miracle to turn it around under current ownership,one that has it's flagship operation only three hundred miles to the south and just sunk a ton of money in to it to modernize for well into the future. This is just my opinion and not meant to insult those of you who like the product here or who have invested large sums of money into racing here.
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big wally
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« Reply #24 on: July 11, 2006, 08:15:33 AM »

Beau, I know Balmoral had T-Bred dates, it stopped when DD complained they were taking away horses from AP. Everything wer are talking about is pure speculation... All we know NJC at Hawthorne might be no more.... The wild card to  Illinois racing is Hawthorne.. What are they going to do?  It looks like AP is here to stay

Jimk, I dont disagree but a $20 million purchase of NJC debt says to me AP wont go away even if the slot or casino issue is not settled favorably to the tracks... Last week I would have agreed 100% with you..

AP Figures to date (may be off but very little)
ON Track $465,263
OFF Track $2,878, 090
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jimk
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« Reply #25 on: July 11, 2006, 08:21:29 AM »

Wally I kind of thought maybe AP did that to be able to take Spts. share of slots if it ever happens.
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big wally
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« Reply #26 on: July 11, 2006, 08:33:28 AM »

Wally I kind of thought maybe AP did that to be able to take Spts. share of slots if it ever happens.

Could be but $20 million or less(he likely bouhgt it at a discount)  is a lot of cash for BIG IF....
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David
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« Reply #27 on: July 11, 2006, 09:11:09 AM »

http://www.suntimes.com/output/news/cst-nws-race11.html

article
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David
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« Reply #28 on: July 11, 2006, 09:14:57 AM »

I guess Mr. D bought it personally, or one of his companies anyways.

If my memory serves me right, this is the same way that Churchill got control of Fairgrounds, by buying it's huge debt (which was basically due to a lost lawsuit with the horsemens group over video poker revenue).
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BeauNarro
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« Reply #29 on: July 11, 2006, 11:46:26 AM »

It will be interesting what the BUZZ was at and after the racing board meeting this afternoon. Anyone who has any news - please share it....
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Jim C
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« Reply #30 on: July 11, 2006, 12:14:00 PM »

I think I have said this before, but I will say it once again. AP does NOT want slots. They would much rather have the 3%. Ask Mr D himself if you want, he will tell you they do not want slots as the cost will be too high and there would not be as much left for purses as we all think due to what the costs would be and what the state would take. The 3% is much cleaner and a much easier sell to the casinos. I do not think they would kill a slots deal, but given a choice they would take the 3% over slots.

 Mr D will also tell you that he feels the off shore betting and rebate houses are the real problem for racing and is much more of an issue for racing's future than slots are. That is where the big drain for our purses is today and it will only continue to grow until we find a way to get a fair share of all that betting money into the purse accounts. Slots or no slots money bet on our product MUST come back into the system. Otherwise no matter what other money is added to purses, money will continue to flow out of the system.

As far as the Sportsmans deal, I think you will see a strong push for 3 days a week for the Sportsmans meet until Fairgrounds closes, then go to 4 days a week. Then AP would open running 4 days a week until CD closes and move to 5 days a week until Labor Day, then go back to 4 days a week. During those 3 and 4 days a week they would card 10 races a day. This would add a few more dark days to increase purses plus provide for more full fields. I would also expect attendance to increase as well. Its basic marketing really, to increase demand you limit supply.
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Round Table
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« Reply #31 on: July 11, 2006, 12:21:51 PM »

Wouldn't you love knowing who really has their finger in the offshore pie? I mean, I'm not pointing fingers cause I have NO idea, but I want seeing  the books, the equity side.

I mean, there is so much money just FLOATING AROUND out there that if you horsemen aren't getting more any, there's something wrong.
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They ought to return to Tampa and fix the mistake they made.
big wally
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« Reply #32 on: July 11, 2006, 12:37:40 PM »

If Off Shore is the problem as an industry shut them out... the tracks know who they are and simply put do not  take their bets... but all the major tracks must do it and there can be no rogue tracks... the tracks are scared if they do cut them off... wagering will drop and I guarantee you many big players will not bet as much and some will leave the game all together(without rebates)... 
« Last Edit: July 11, 2006, 01:57:49 PM by big wally » Report to moderator   Logged
Round Table
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« Reply #33 on: July 11, 2006, 12:44:23 PM »

BW, you have no idea how much of the wealthiest Americans are again moving equity offshore, once more in droves and in literally staggering amounts, while the Treasury and Justice Departments turn a blind eye.

It's the small businessman getting burned  over the $10,000 "three strikes you're out freeze your funds wire transfer" while the wealthiest BILLIONS exit unchallenged.
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They ought to return to Tampa and fix the mistake they made.
big wally
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« Reply #34 on: July 11, 2006, 12:55:26 PM »

BW, you have no idea how much of the wealthiest Americans are again moving equity offshore, once more in droves and in literally staggering amounts, while the Treasury and Justice Departments turn a blind eye.

It's the small businessman getting burned over the $10,000 "three strikes you're out freeze your funds wire transfer" while the wealthiest BILLIONS exit unchallenged.

Become an FBI Agent or an IRS agent and track them down
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Round Table
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« Reply #35 on: July 11, 2006, 12:58:57 PM »

Wally, I quit the boy scouts a long time ago.
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They ought to return to Tampa and fix the mistake they made.
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« Reply #36 on: July 11, 2006, 01:53:42 PM »

Jim C I know you said it before and I know you are saying again, that AP does not want slots. You are missing the point of what I said about AP wanting slots for the sake of slots and not for the sake of racing. You have your beliefs and I have mine. I think if AP ever got it's foot in the door and got slots thier future would be slots and thier rearview mirror would be racing. That is what I'm talking about when I say AP is hanging on for slots. Get thier foot in the door, realize the huge profits with no muss no fuss and racing won't get any more attention than what the legislation would dictate. The focus would then change to how to get a bigger piece of that casino style dough. T he days of worrying about five horse fields and hundred and fifty thousand dollar on track handles would be behind them. Remember Jim just my opinion, but I think CDI would then be focussing on keeping CD one of the few longterm surviving tracks in the country where simulcasting and Derby Day will still keep very profitable. And still LOCATED in horse country. IMHO
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« Reply #37 on: July 11, 2006, 03:26:43 PM »

Maybe Arlington will switch the Jockey Club meet to Arlington Park?
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« Reply #38 on: July 11, 2006, 03:50:17 PM »

Maybe, but more likely to extinguish NJC and then to become the new 50% partner of Hawthorne National LLC. Imagine the heated arguments over EVERYTHING..gawd--what a mess the Carey Heirs have gotten themselves into.
I and a very few others tried to convince Tom Senior and Tom Junior that it was a MAJOR mistake, but Junior was trying to save his business life and thought that he would be protected under the Haw/Nat umbrella from his family members that wanted him out. They were still successful in dumping him, but now they are still left tied to the foot of NJC - sinking..sinking
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Jim C
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« Reply #39 on: July 11, 2006, 11:23:19 PM »

Jim K
I understand it is your opinion, but I am just telling you what I have been told by DD himself a number of times. Given a choice HE DOES NOT WANT SLOTS. The 3% is much more realistic and costs them NOTHING. Slots would cost CDI/AP over 100 million just to get started, then there is the legal issue with Arlington Heights and the city board being against slots at AP. It could very well be just like Florida where they approved slots but the state took so much in taxes and fees that it left very little for the tracks or horsemen. Why would they want to get into that mess if they can get 3% from the top casinos FOR NOTHING? And dont forget there will be sooner or later a casino in Chicago which would boost that 3% amount much higher then what is forecast now.

On a personal side of DD, as long as he is around racing will always be first for him. Hre is a guy who owns a multi BILLION dollar business that is privately held and relatively debt free.....he can travel where ever he wants, do whatever he wants, who whomever he wants at anytime he wants and yet where does he go just about every single day of his life? Not his business office, but Arlington Park and its not because he might get slots someday. He owns what may be the best Thoroughbred farm in northern Illinois, buys, sells and breeds horses and as we all know is the major stockholder of CDI. Now with all of that investment in racing do you really think his interest would suddenly turn to slots? If that were the case he could have bought the Casino Queen from Bidwills or who knows how many other casinos that have been for sale from time to time. Racing is in his blood and its what he enjoys.
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jimk
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« Reply #40 on: July 12, 2006, 05:32:35 AM »

Jim C I think for people like RLD it all comes down to three letters ROI period.
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