Future of Arlington International Racecourse in question after decision to not pursue gambling

The parent company of Arlington International Racecourse on Wednesday announced that it wouldn’t pursue a gambling license for the facility and may have to move it elsewhere entirely.

Churchill Downs Inc. CEO Bill Carstanjen said in a statement that Arlington didn't apply for a slot machine and table game license under the recently enacted Illinois Gaming Act. He said that it wouldn't be financially feasible because of an oversaturation of gambling in Illinois and the high tax rate the racecourse would bear.

"The economic terms under which Arlington would be granted a casino gaming license do not provide an acceptable financial return, and we cannot responsibly proceed," Carstanjen said. "The [Chicago area] market has seen a significant proliferation of video gaming terminals over the last several years and now faces the potential introduction of five new gaming facilities as well as increased gaming positions at existing casinos and video gaming outlets."

Arlington would enter the market with an effective tax rate between 17.5% to 20% higher than existing Chicago-area casinos because of its contributions to the Thoroughbred purse account, he said.

“This disadvantage in a hyper-competitive gaming market, coupled with substantial licensing and reconciliation fees and new, unviable horse racing requirements in the Illinois Gaming Act, makes construction of a casino at Arlington financially untenable,” he said. “It is with a heavy heart that we conclude that we can’t make this work.”

Arlington will continue to conduct horse racing in 2020 and 2021 and apply for a sports betting license while “longer-term alternatives are explored,” he said.

“All options will be considered, including moving the racing license to another community in the [Chicago area] or elsewhere in the state,” he said.

The Illinois Thoroughbred Horsemen’s Association called the decision both stunning and disappointing, particularly because Arlington has lobbied for permission to offer casino-style games for more than a decade.

The gaming would be a way to boost revenue at the track and generate funds that would improve the quality of horsemen’s purses, ITHA officials said.

“The company evidently plans to instead abandon its commitment to racing in Illinois and focus solely on its stake in the Rivers Casino and potentially other Illinois casinos not yet developed,” ITHA officials said in a statement. “Churchill has snubbed not only the working men and women of thoroughbred horse racing whose collective livelihood depends on live racing, but also all of the elected officials it has so intensely lobbied over the last decade.”