ITHA LEGISLATIVE REPORT LAST MINUTE EFFORT BY ARLINGTON TO GO AROUND INDUSTRY AGREEMENT Posted On:Oct 28, 2011 | Posted By:Glen
OCTOBER 27, 2011
A.Lead-Up To Veto Session
During the final week of the 2011 spring session, the General Assembly passed a gaming expansion measure -- SB 744 (Link/Lang) – that includes “slots-at-tracks” language agreed upon by ITHA and all Illinois horse racing stakeholders.That bill has not yet been sent to the Governor because Senate President Cullerton filed a “motion to reconsider” on SB 744, effectively freezing the bill in the Senate chamber until the motion is either withdrawn or defeated.Cullerton’s motion was filed to allow Governor Quinn additional time to review the matter without prompting a veto (given Quinn’s public statements of opposition to SB 744 as “top heavy”), with the hope that the Governor might identify specific changes to SB 744 that, if passed as simultaneous “trailer legislation,” could allow Quinn to sign both SB 744 and the trailer bill.This unusual process reflects Cullerton’s assessment that any gaming expansion measure that could successfully pass the General Assembly represents a delicate balance of interests, and simply “starting over” would be unwise.
Throughout the summer and early fall months, the Governor held a variety of meetings with various gaming stakeholders, including ITHA.While the Governor continued to make public statements about his concerns over SB 744 – calling it “top heavy” and deriding what he felt was its reduced regulatory oversight of gaming – Quinn did not articulate what type of gaming expansion he could support until last week.Just prior to the commencement of the 2011 veto session, Quinn unveiled his “acceptable gaming expansion framework” at a press conference on October 17, 2011 (the full presentation can be found at the link at the end of this report). His framework included (among other things):
·Five new casinos to be located in Chicago, Lake County, South Suburban Chicago, Danville and Rockford;
·IL Gaming Board maintaining final decision on where to locate the new casinos; and
·Enhanced regulatory oversight by IL Gaming Board.
Unfortunately, the Governor specifically excluded slots-at-tracks as part of his “framework,” expressing concerns about “over saturation” of gaming, and instead proposed that the horse racing industry receive substantial additional funding through a new impact fee imposed on the new casino licensees.While the Governor proposed a “framework” that could lead to his support and approval of a gaming expansion proposal, he did not offer up legislative language.
B.Veto Session Begins
The first week of the 2011 veto session began this week on Tuesday, October 25 and ended on Thursday, October 27.The second week of the veto session runs from Tuesday, November 8, through Thursday, November 10.After November 10, there are no other scheduled session dates for the remainder of 2011.
C.What Happened This Week
Very little formal action took place on gaming during the first week of the veto session.At the outset of the week, the Senate President’s staff developed draft legislation that they believed reflected the Governor’s “framework” for viable and acceptable gaming expansion, and filed it as Senate Amendment #1 to HB 747 (Link).Reflecting their continuing detachment from the legislative process surrounding gaming, the Governor’s office advised ITHA and others that Governor Quinn did not play any role in developing the amendment, and would not claim any ownership over the language. In short, any effort to test the political viability of Quinn’s “framework” would not enjoy involvement by the Governor or his staff.
Ultimately, Senate Amendment #1 to SB 747 (Link) was posted for a “subject matter hearing” before the Senate Executive Committee, which heard limited testimony on the measure and took novote on it.
Throughout the week, there was a general expectation that a Senate floor vote would occur on the Governor’s “framework” proposal.It was expected that the draft bill would fail, reflecting that the Governor’s “framework” does not represent a politically viable gaming expansion option.After that “framework” proposal failed, it was further expected that a new measure might emerge that included much of the “framework,” but also added back slots-at-tracks.In short, all involved legislators and stakeholders recognize that slots-at-tracks is an essential ingredient to any gaming expansion bill that can pass the legislature.
Despite these expectations, no committee or floor votes occurred this week on gaming expansion.Nonetheless, the non-viable nature of excluding slots-at-tracks remains evident to all.Senate President Cullerton ended the first week of the veto session with the expressed intent to meet with Governor Quinn next week, in his continuing effort to directly engage the Governor in developing a politically viable gaming expansion formula.
D.Subsidies Versus Slots-At-Tracks
The proposed alternative to slots-at-tracks -- a state subsidy through the imposition of an impact fee on the new casinos – has been flatly rejected by the horse racing industry in favor of a long-term solution (slots-at-tracks) to allow the industry to be self-sufficient.As ITHA members know, slots-at-tracks is the successful formula other states have used to ensure the long-term viability of horse racing. Any subsidy option would not represent a long-term solution, and would be fraught with the uncertainties of protracted litigation and the annual appropriations process.
E.Industry Agreement Faces Last-Minute Challenge By Arlington
For the past 18 months, the entire Illinois horse racing industry has had a firm commitment to a gaming expansion bill that includes three critical components related to horse racing: (a) agreed rates for purses out of AGR from slots-at-tracks; (b) elimination of recapture; and (c) guaranteed live racingopportunities.ITHA President Campbell refers to these elements as the “three Rs.”The industry has stayed true to those principles with signed agreements by all parties (all the tracks and all the horsemen organizations).Those principles are fully reflected in SB 744, which passed both chambers of the General Assembly.
This week in Springfield, Arlington Park Racetrack took unilateral action in contradiction of this agreement, while all other stakeholders reaffirmed their commitment to these principles.Arlington sought to eliminate the live racing guarantees – the “third R” -- applicable to itself.ITHA and all other horse racing interests (all the other tracks, and all horsemen groups) objected to this Arlington effort, and presently ITHA and Arlington are in discussions to resolve this matter.ITHA will keep the membership informed on this important, and unfortunate, development.
As all horsemen know, slots-at-tracks is meritorious only as a means to protect and promote Illinois horse racing, Illinois horse breeding and related Illinois agri-business.It was never intended to allow any track to primarily become a casino, with limited and incidental horse racing.Live racing guarantees are essential to protect that intent, shared by most every supportive legislator, and ITHA will remain vigilant in this regard.ITHA will only support a slots-at-tracks proposal that includes the “3 R’s”: (a) agreed rates; (b) elimination of recapture; and (c) live racingguarantees that have been agreed upon.ITHA will aggressivelyopposeany slots-at-tracks measure that does not include these measures.
