Illinois HBPA Rejects CDI’s Bid to Operate its ADW in the State

The board of directors of the Illinois Horsemen’s Benevolent & Protective Association rejected its consent for Churchill Downs Incorporated’s TwinSpires advance-deposit wagering (ADW) betting platform to operate in the state of Illinois.

Under Illinois law, horsemen get consent rights for an ADW platform to operate in the state. State law also mandates an ADW operator must have a contract with another licensed track in the state. CDI sought such an agreement with FanDuel Sportsbook and Horse Racing at the track formerly known as Fairmount Park. That track is located in southern Illinois, 15 miles from downtown St. Louis.

The HBPA, which represents owners and trainers at the southern Illinois track, pulled no punches outlining the reason for its stance. That would be the closure of the iconic Arlington Park in September after 94 years of races. CDI owned Arlington Park, located in Chicago’s northwest suburbs. But shortly after closing the track in late September, CDI announced it was selling the land to the Chicago Bears for $197 million.

In so doing, not only did CDI close one of the largest tracks in the Midwest, it spurned a bid from a group wanting to maintain racing on the property.

Hackles are raised among the state’s horsemen

“CDI wants their cake and to eat it too,” Illinois HBPA President Jim Watkins said in release announcing the HBPA’s position. “We’re not willing to be involved in the racing, but we want to still utilize our ADW powers in Illinois.”

Watkins said in the release he wants the Illinois Racing Board to hear the case. The IRB can overrule the HBPA’s veto. But Watkins believes putting this front-and-center clearly illustrates his group’s anger at CDI’s actions.

“We just felt this was an issue the racing board should be able to weigh in on, whether TwinSpires continues to be able to operate in Illinois. That’s a big reason we withheld our consent,” he said.

Putting the ADW model on trial is a spare benefit

While he’s at it, Watkins wants another big issue brought to the forefront: the business model of ADWs. He said ADWs take an outsized share that eats into purse and brick-and-mortar tracks. Watkins cited a Thoroughbred Racing Commentary article by former New York Racing Association head Charles Hayward that illustrated how the system hurts the tracks, purses, and by extension, horsemen.

In the article, Hayward wrote, “Because of the pandemic of early 2020, Advance Deposit Wagering (ADW), Computer Robotic Wagering (CRW) and other off-track outlets handled 97 percent of the total U.S. racing handle last year. The on-track handle was the remaining 3 percent, or $333 million.”

“It’s inherently flawed, just the way it is set up,” Watkins said. “I think it’s going to be the death of horse racing if we continue to go at the rate we’re going. This was so well-said by a Chicago horseman: ‘We traded dollars for quarters when we went to simulcast wagering. Now, with the ADW wagering, we’re trading dollars and quarters for nickels.’ The recipe has to be changed if horse racing – at least for the mid-level and smaller tracks – is going to exist.”

HBPA does have ADW agreement with one entity

Interestingly, Watkins’ HBPA signed a one-year contract with TVG that gives the betting/television entity entry into Illinois. FanDuel, which owns TVG, is not a partner in the southern Illinois racetrack. But it became an equity partner to operate the sports book. It also owns branding and naming rights that includes sponsorship of the St. Louis Derby.