Illinois regulatory agency moves on historical horse racing rules

Posted: Dec. 9, 2018

The Illinois Racing Board has published rules that would regulate historical horse racing machines, and the Illinois Thoroughbred Horsemen’s Association said it will outline its concerns over some of the language in the rules during a public comment period that ends Jan. 21, 2019.

The IRB, which said historical horse racing—identified as a pari-mutuel product that relies on the results of previously run races and the pooling of wagers but is presented in the form of a video lottery game—”would potentially make Illinois’ horseracing industry more competitive with surrounding states” in the absence of dedicated revenue from casino-style gaming.

After comments are received, a second notice period is held so the Joint Committee on Administrative Rules can review the document and then determine whether it objects, has no objection, or makes a recommendation. The final step would be JCAR filing a certified copy of the adopted rule with the Illinois Secretary of State.

Wagering on historical horse races would be available for tracks that were licensed in 2017 for no less than 40 days per year, or for a track that has conducted at least 40 days of live racing for two consecutive years. In the latter case, the track must conduct at least 40 days of racing per year to maintain a historical horse racing license.

The language covers Arlington Park, Hawthorne Race and Fairmount Park, the three remaining tracks in Illinois. The rules submitted by the IRB also state that in order for any track to offer historical horse racing, the number of live racing days it holds can’t be less than 85% of the number of dates conducted in 2017.

The wagering tax on historical horse races would be the same as a pari-mutuel wagering as stated in Illinois racing statute. Revenue after taxes would be split 50-50 between racing associations and purse accounts.

ITHA Executive Director David McCaffrey said the horsemen’s group isn’t opposed to historical horse racing but has concerns about language in the rules regarding the required minimum number of racing dates; expenses the tracks can take off the top before the 50-50 split kicks in; and the origin of the archived races that would be used to determine the outcome of the video games.

Regarding the origin of races, the ITHA seeks clarification in the rules because they don’t specifically state the races must originate in Illinois. That raises the following question: If out-of-state races are used, which is the case in other jurisdictions with historical race wagering, would it be treated as a simulcast wager and thus reduce the amount of revenue to purses?

Illinois continues to operate under a mid-1990s statute that authorizes “recapture,” a system whereby racetracks are able compensate for reductions in live handle caused by wagering on imported signals by taking money from purse accounts.

The historical horse racing push could dovetail with yet another effort to pass racetrack gaming during the 2019 legislative session.

(Hawthorne Race Course photo courtesy of ITHA)