Illinois breeders group joins horsemen’s recapture lawsuit

By: Tom LaMarra

April 22, 2018

The Illinois Thoroughbred Breeders and Owners Foundation has joined a lawsuit filed in Cook County Circuit Cook that argues the state by law must replenish purse accounts drained by a statutory process called recapture.

The suit was filed earlier by the Illinois Thoroughbred Horsemen’s Association in conjunction with the Illinois Harness Horsemen’s Association and the Illinois Horsemen’s Benevolent and Protective Association. ITHA President Mike Campbell, in his role as an owner, is a plaintiff.

Recapture came about when the Illinois legislature authorized full-card simulcasts. It awards racetracks compensation—taken from purse accounts—for revenue lost via the decline in live pari-mutuel handle. For more than 17 years, hundreds of millions of dollars have been taken via recapture and not replaced.

The ITHA in an April 20 release reiterated that state law requires the Illinois General Assembly to “appropriate sufficient funds” for payment to purse accounts in amounts equal to those that the Illinois Racing Board permits tracks to take away via the recapture provision, but the state has failed to follow the law.

“Our litigation is aimed at holding the purse accounts harmless from the effect of recapture—as the law intends—so that purse levels reflect the percentage of handle they have earned,” the ITHA said.

Statistics from the latest IRB annual report show that recapture amounted to $273 million from 1995-2016. Recapture at Arlington Park and Hawthorne Race Course, where horsemen are represented by the ITHA, totaled more than $122 million during the period. In 2017 recapture at all meets totaled about $11 million, according to the IRB annual report.

The same report shows that Illinois handle on in-state races was $872 million in 1995 versus $61.6 million in 2016—a drop of almost 93%.

Purses, meanwhile, haven’t fared well during the period, either. Thoroughbred purses “distributed” in 1995 totaled $49.3 million but increased to a period high $65.9 million (excluding the year Arlington hosted the Breeders’ Cup) in 2000.

In 2016 Thoroughbred purses distributed totaled $23.8 million, down 51.7% from 1995 and 63.8% since 2000. Standardbred purses dropped 73.1% from 1995 to 2016, and three harness tracks have closed in the Chicago metro area.

“Recapture has sucked the life out of Illinois horse racing,” ITBOF President John Haran said. “We obviously need other gaming options at the tracks to supplement purses, and we continue to lobby state lawmakers for that. But in the meantime, we absolutely must counter the crushing blow of recapture. Our lawsuit is geared to do just that.”

The ITHA said the groups said they hoped the ITB would file a “friend of the court” brief “to share its expert opinion on the implications of recapture and the state’s failure to follow the law.” The regulatory agency in March considered a request to pursue an amicus brief, but the vote was 5-3 against the action; three members of the board were absent.

“The IRB rolls out the red carpet for the tracks, but not so much for horse owners and the workers of racing,” Campbell said. “It’s live racing and overnight purses that support owners and breeders and the jobs of trainers, hay and feed suppliers, veterinarians, blacksmiths, backstretch workers and countless others at the tracks and throughout agribusiness. The IRB’s responsibility to stand up for the stakeholders of this industry doesn’t begin and end with ensuring that tracks can take the maximum amount of recapture from horsemen’s purses each year.”

The ITHA in its release further stated the position supported by owners, trainers and breeders:

“Illinois horsemen and breeders remain committed to winning passage of legislation that will permit other gaming options at tracks for the express purpose of generating revenue to boost purses (as other leading racing jurisdictions already have done), and abolish the practice of recapture. We will not halt the exodus of racing jobs from our state, preserve what remains of breeding, attract additional bettors, and, ultimately, grow field size and handle until overnight purses in Illinois racing are substantially improved. But absent an act by legislators to end recapture, or a move by regulators or tracks to halt the practice, enforcing the law and requiring the state to replenish the purse accounts will, at least in the short term, help stabilize this industry.

“Tracks rely on the statute when they annually take dollars from the horsemen’s purse accounts. Horsemen and breeders are simply asking a court to ensure that the state also honors the law by making those accounts whole. The ITHA, IHHA, ILHBPA and ITBOF believe it is past time for the state to follow the law.”

(Hawthorne photo courtesy of ITHA)