Churchill Downs Not High On Its Future At Arlington International Racecourse

Posted on August 7, 2020 - Last Updated on August 16, 2020

The writing that’s been on the wall for months regarding the Arlington racetrack sale has a voice behind it finally. It’s more certain now than ever that if Churchill Downs is to operate a “racino” in Illinois, it won’t be in Arlington Heights.

Churchill Downs CEO Bill Carstanjen is that voice. Precisely what Arlington International Racecourse‘s fate will be, however, is still unknown.

What Carstanjen said about a possible Arlington racetrack sale

On a recent company earnings call, Carstanjen confirmed what many had suspected. Churchill Downs doesn’t have grand designs for its future at the racecourse. Carstanjen said:

“That land will have a higher and better purpose for something else at some point. But we want to work constructively with all of the constituencies in the market to see if there’s an opportunity to move the license or, otherwise, change the circumstances so that racing can continue in Illinois. We’ve been patient and thoughtful and constructive with the parties up in that jurisdiction, but long term, that land gets sold and that license will need to move if it’s going to continue.”

It seems it’s only a matter of time until Churchill Downs gallops away from the property. Indicators showing that would be the case arose last September.

It was then that Churchill Downs announced it would not seek a license for casino gaming at Arlington. That was a stunning reversal, especially after Churchill Downs’ decades of lobbying for that exact privilege.

At the time, Carstanjen cited the tax rate for poker, slots and table games. He expressed doubt that a racino would generate enough revenue to cover expenses, much less show a profit.

The more recent Carstanjen quote affirms that Churchill Downs is looking elsewhere. While there’s an obvious alternative, it’s not entirely up to Churchill Downs.

State, city governments yet to weigh in

Churchill Downs has its eyes on another IL city, Waukegan. It was one of three license applicants for casino gaming there, which the city forwarded to the Illinois Gaming Board (IGB) for consideration.

The board can only approve one license there, however. There’s no guarantee that Churchill Downs will be the IGB’s selection. Additionally, there’s no clear timeline for that decision.

The other two applicants are Full House Resorts and North Point Casino.

Rush Street Gaming CEO Neil Bluhm, whose company owns Rivers Casino in Des Plaines, is a party to Churchill Downs’ bid as well.

Then there’s the matter of whether the horse racing operations would move to Waukegan. Churchill Downs has a license for that with the state it can move, so that’s not an issue.

What may be an issue, however, is Waukegan itself. Mayor Sam Cunningham says his office hasn’t had any discussions about horse racing in his city. Cunningham said:

“In any economic times, we’d be foolish not to listen to any proposal by a credible developer. But a racino? Right now, our top priority is to get our citizens through these times and then, hopefully, look forward to a new casino opening sometime late next year.”

It’s uncertain whether Churchill Downs would sell the Arlington property before getting all its “ducks in a row” for Waukegan. Right now, what it might do if the IGB grants the license to a competitor is also a matter of speculation.

If Waukegan doesn’t work out, then what?

In January, two parties reportedly showed interest in the Arlington racecourse. The reports went on to state that Churchill Downs rebuffed those inquiries, however.

The reason for that disinterest should be obvious. It’s impossible to offer horse racing without the proper facility. That, in turn, could affect Churchill Downs’ ability to move its racing license to Waukegan.

So far, Waukegan is the only place where Churchill Downs has applied for a gaming license. Although the latest round of gambling expansion authorized six new casinos in different parts of IL, it’s late in the game to file the paperwork elsewhere.

All of Churchill Downs’ money appears to be on Waukegan. If that “horse” doesn’t run, the company could be left with a situation it clearly has no desire to be in.

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Derek Helling

Derek Helling is a freelance journalist who resides in Kansas City, Mo. He is a 2013 graduate of the University of Iowa and covers the intersections of sports with business and the law.

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