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Fairmount Park hopes for edge in fight for local gambling dollars

Different streams of revenue may start flowing into Fairmount Park and help Illinois' lone downstate horse-racing venue compete with the growing number of casinos.

The Collinsville horse-racing track has been entrenched in a fight for local gambling dollars since 1993 as riverboat casinos have taken root and posed stiff competition on both sides of the river. This has taken away from the Fairmount Park purses, which have decreased in recent years.

Illinois does not allow tracks to have slot machines to help supplement prize winnings. As a result, purses at the state's five horse tracks have been lower than those awarded at tracks in surrounding states that allow on-site gaming. And horse owners and trainers have been leaving Illinois tracks for higher prize-winning races in states such as Indiana and Iowa.

The state's horse racing industry has been pushing for in-track gaming, but to no avail.

Lanny Brooks, executive director of the Illinois Horseman's Benevolent and Protective Association in Collinsville, said he and his group have lobbied for gaming for the past six years. But he believes that the state will relent and permit in-track gaming.

"I think eventually there will be for two reasons," he said. "One, we will continue to impress on them that every state around us now, Indiana, Kansas, Iowa, all of those states have electronic gaming and more active horse racing, which is a huge boon for horse racing and agriculture that is important to the state. And it gives so much money in tax revenues to the state and Illinois, which is in such financial dire straits now. I think that they will pass one sooner or later. When, I don't know."

In the meantime, the racing season has been getting shorter at Fairmount Park. The recently completed season was cut to 57 dates. By comparison, the 2008 season had 60 dates and the 2007 season had 90 races.

On Sept. 24, the state racing board approved fewer race dates at each of the state's five horse-racing tracks for 2010. Fairmount Park has been cleared for 52 dates next year.

However, the season could be limited to as few as three dates unless the General Assembly raises Fairmount Park's "privilege tax" from 0.25 percent to 0.75 percent during the upcoming veto session and that members of the American Federation of State, County and Municipal Employees Local 1805 union employed at the track work 130 days, per an arbitrator's recent decision.

"We obviously want to go to more race dates," Fairmount Park President Brian Zander said. "Under most circumstances, going to 52 days is a tough pill to swallow."

"Next year will be a transition," Brooks said. "Sure, I am not happy with 52 days. Of course not. I want to race 152 dates. But this year we are securing advance deposit wagering for next year."

Advance deposit wagering, or ADW, could open the gate for placing bets on horse races online and that would bring more money to Illinois tracks. The Illinois General Assembly approved the move earlier this year.

Fairmount Park also has established an affiliation with online wagering site tvg.com. This means that Fairmount Park will receive a cut of the profits from any bet placed in Illinois through the company's Web site.

The racing board will meet and review this proposal on Oct. 13. If the board certifies the move, then bets placed on TVG's Web site beginning Oct. 14 will start bringing revenue to the metro-east track. The money the track receives will be split between the track and the horse owners.

Illinois Racing Board Projects Manager Mickey Ezzo said that he does not anticipate the board will block this move since it already has debated the issue and rules.

"I don't think there will be a debate on ADW per se," Ezzo said. "The agenda item will be simply to look at the items submitted by the ADW companies and examine the exhibits they were required to have, like financial and state policies and procedures, those kinds of things in respect to how they conduct ADW."

Zander said he could not estimate just how much extra revenue this could bring to the Illinois horse-racing industry but has heard some lawmakers say that the windfall could be as much as $100 million to $200 million a year.

He also said that TVG has broadcast deals with 35 cable companies, and the Internet gambler is in the process of working out another with metro-east cable provider, St. Louis-based Charter Communications.

"We were put on an even playing field, so to speak, with Chicago-area tracks," Zander said. "In the past, that has not been true."

Prior, the state's other tracks monopolized "host" status on simulcast races, which Fairmount Park broadcasts year-round. Brooks said that before, other Illinois tracks like Arlington Park and Hawthorne Race Course received money from wagers placed at off-track betting sites, including Fairmount Park, because the state's horse racing law awarded the Chicago-area tracks Illinois' broadcast transmission signal. The Chicago tracks had an advantage, Brooks said, but advance deposit wagering will change all of that, and that money will go to Fairmount Park where it belongs.

Each of the state's other tracks --Arlington Park, Hawthorne Race Course, Balmoral Park and Maywood Park -- are each affiliated with other online wagering sites, such as TwinSpires and YouBet.

"It should give the racing industry a boost," Ezzo said. "It will increase wagering with benefit to state horsemen and race tracks."

More revenue sharing also is expected when a new casino opens in the Chicagoland area in a couple years. In December, the state's 10th gambling license was awarded to Des Plaines, where a new riverboat casino is planned. Brooks said the casino will bring in adjusted gross receipts, of which 15 percent will go to the Horse Equity Fund to support the state's horse tracks.

Also hanging in the balance is an escrow account created from the Horse Racing Equity Trust Fund law, which the General Assembly passed in May 2006. Since then, the account has collected about $76 million --3 percent in revenue sharing from the state's five wealthiest casinos located upstate. The casinos have challenged the move in the Illinois and U.S. Supreme Court. Fairmount Park's share is an estimated $6.4 million, of which about half would go to the track's horse owners.

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