In deciding Monday to close Arlington International Racecourse for 1995, multimillionaire Richard Duchossois is admitting that his track, considered one of the best in the world, can’t compete head-to-head against casino-style gambling.
Duchossois is saying that the historic Arlington-called “the Taj Mahal of horse racing” by Forbes magazine-is so outclassed by a newly opened riverboat casino in nearby Elgin that its only salvation is a riverboat of its own.
In a statement issued Monday, Duchossois described horse racing and breeding in Illinois as “an endangered industry” and said, “We put forward a plan to save quality racing in Illinois, but it was ignored.”
The move to close the track and the weeks of negotiations that led up to that decision were an attempt by Duchossois, a major Republican contributor who counts Gov. Jim Edgar among his friends, to force Illinois officials into giving him what they’ve already once refused him.
Last year, he failed to win the state’s final riverboat license on the Fox River in Elgin. Instead, the Illinois Gaming Board selected another gambling concern that opened the state’s largest boat, the Grand Victoria, in October.
“The wagering dollars being siphoned off by the Elgin riverboat casino,” Duchossois said in his statement, “would so greatly reduce the size of purses (prize money) that it would mean the demise of world-class racing in Illinois.”
The Duchossois drama of recent weeks has highlighted important public-policy questions with great significance throughout Illinois:
– Should a wealthy, influential citizen be permitted to pressure officials into a move that would push the state to a new level of gambling?
– And if horse racing, at its best, isn’t viable on its own, why should the state prop it up even more than it already does?
No one is sure if Duchossois’ decision will be permanent, but if it is, it would bring a sudden conclusion to the 67-year-old track’s long and sometimes stormy history as a major social and economic instutition in the state.
In 1973-the same year Secretariat raced at the track-Arlington was the undoing of former Gov. Otto Kerner, convicted of giving then-owner Marjorie Everett favorable racing dates in return for bargain-basement racetrack stock.
The track was later obtained by Gulf & Western Corp., which sold it to Duchossois and four partners in 1983. He now owns it alone.
Duchossois says he can save Arlington if he’s given permission to float a casino on a pond at the track, the so-called “boat-in-a-moat” plan.
But to give Duchossois such a boat-the closest thing to a land-based casino without being one-the legislature would have to increase the number of riverboat licenses in Illinois, something Chicago Mayor Richard Daley has been trying to do for more than a year without success.
This would open the door for dozens, if not hundreds, of requests for licenses from entrepreneurs in the metropolitan region and from around the state. And it would certainly re-ignite proposals to broaden state law to permit still another new level of gambling: casinos that are completely on land.
The tax breaks, state subsidies and the casino demanded by Duchossois would be the latest in a long line of support provided to the horse racing industry by Illinois government.
For example, Arlington and the other tracks paid $47 million in taxes to the state last year, but just over half of that amount was funneled back into programs to fund track improvements, buttress horse breeders and otherwise promote the racing industry.
By contrast, the riverboats, after just over two years in operation, provided the state with $102 million in taxes. And none of that money came back to the riverboats.
In the late 1980s, Duchossois sought to increase the amount of state support to Arlington.
He unleashed a full squad of lobbyists and publicists on the General Assembly in an effort to win enough financial help to build an “equine center,” complete with hotel, convention center, amusement park and golf course, on 350 acres in northern Lake County.
While he failed to get everything he sought, he still won enough concessions to go ahead with a rebuilding of Arlington, destroyed in a 1985 fire, at its original site.
Those concessions, which benefited all the tracks in the state, included the approval of track-owned off-track betting, a cut of as much as 77 percent in the state tax on on-track bets, and an even deeper cut in the tax on off-track bets.
The result was a drop in state revenues. In 1980, the state had gotten about 7 cents from every dollar bet. By 1993, it was reaping only 3.5 cents per dollar.
But even with those concessions, the horse racing industry in Illinois has still been staggered by the proliferation of competing forms of gambling and entertainment and hamstrung by its inability to leave behind the 1930s and repackage itself for the 1990s.
This isn’t a local phenomenon. Throughout the U.S., horse racing has been in a sharp decline for more than two decades. In inflation-adjusted dollars, the total amount bet on races, known as the handle, fell from nearly $22 billion in 1970 to $14 billion in 1989, a drop of 36 percent.
In Illinois, the handle peaked in 1976 at nearly $2.4 billion, despite competition from the 2-year-old state lottery. Last year, less than $1.3 billion was bet, a decline of 46 percent.
The story has been much different for the state’s still-fledgling fleet of riverboat casinos.
Last year, nine riverboat operations-none of which was open before September 1991-had a handle of $6 billion. In other words, for every one dollar wagered on a horse race, $4.66 was bet last year at a floating gambling hall.
There are good reasons for that discrepency.
Betting on the horses is a cerebral sort of wagering. It’s a bet of skill-high skill, the pony players will tell you. It’s hard work.
A horse gambler can win and even win consistently, but only by devoting the time and energy necessary to study such arcania as track conditions, previous performances and the vagaries of horseflesh. And the bettor has to be smart or have a knack.
None of this applies to the vast majority of games offered on a riverboat casino.
Slot machines, which account for two of every three wagers on Illinois boats, feature a game of pure luck. Horse players sneer at slot machines as an empty-headed form of gambling, but, in fact, the slots are a cheap form of entertainment.
“For just a few dollars, anybody . . . even relatively poor people, can spend a few hours working a slot machine-renting it-buying the services it provides,” wrote sociologist Robert D. Herman.
“Such a person cannot afford to see his or her stake disappear too quickly. The slot machine accommodates by prolonging the game, accepting very small bets, and paying back a large number of them.”
Horse players have to wait about a half an hour between each race, but after each pull, the slot player can throw in coins all but instantaneously. Racetracks pay out about 80 percent of the money bet on a race, but with slot machines, as much as 95 percent is given back to bettors.
The tracks are only open for a few hours each day and for only a portion of the year-131 dates in the case of Arlington. By contrast, riverboat casinos are available to the bettor virtually around the clock each day of the year.
That’s been one of Duchossois’ complaints. On average, he has said, Arlington is open just 4 hours and 18 minutes per racing day. Arlington’s full season, he has argued, is the equivalent of just 22 full days of operation for a riverboat.
In addition, unlike the floating casinos, the racetracks are required to kick in money each year for philanthropic programs such as health insurance and substance-abuse counseling for racetrack workers. In 1993, the tracks provided $750,000, of which $257,000 came from Arlington.
Leaving aside the state tax money used to beef up the horse racing industry, the taxes paid last year by the tracks came to about 1.8 percent of the total amount bet. For the riverboats, it was about 1.7 percent.
Duchossois argues that the main issue in his demands for a casino and other subsidies is the need to save jobs at Arlington and throughout the rest of the state’s horse racing industry.
In his statement, Duchossois contended that in the debate over his demand for a casino, “Almost everyone missed the point: real people with real jobs in an endangered industry.”
But in Illinois, companies go out of business each day, resulting in a loss of jobs. And new companies are started, offering new jobs.
That has been the case with gambling in the state: The racetracks face the loss of jobs, the riverboats face the likelihood of adding even more workers.
Illinois citizens have voted with their money on their favorite form of gambling.
The riverboats have won the gamble.
