Legislative update — State of the State

A couple of items to watch for today:

ADW – My understanding is the House and Senate may vote today on advanced deposit wagering legislation, extending ADW for the horse racing industry before a key deadline later this week. State Rep. Bob Rita is working on that issue in the House. He sponsored Senate Bill 66 in early December to push forward the agreement reached by the various horse racing groups. So if a bill moves today, it could be on that bill or it could be on a House Bill in the Senate. Either way, both chambers would need to act on the new version of a bill today.

Here’s the link to SB 66 — http://www.ilga.gov/legislation/BillStatus.asp?DocNum=66&GAID=12&DocTypeID=SB&LegId=69164&SessionID=85&GA=98

Below and attached is a fact sheet from the industry agreement. There may be changes in whatever advances today but this should give you the basic outline of what’s being considered. I’m glad to connect you with Bob to talk more as the day develops.

State of the State react – I’d be glad to connect you with any of my legislative clients – state Reps. Rita, Elaine Nekritz or Mike Zalewski – after the speech for reaction if needed. But if the governor discusses a new capital bill today, I’d offer response from the Transportation for Illinois Coalition, the umbrella organization of business, labor and construction groups pushing for infrastructure funding. We might have a statement in response, and TFIC Co-Chair and Illinois Chamber of Commerce CEO Doug Whitley will be at the Capitol today as well and could talk.

Ryan

SUPPORT EXTENSION OF ADW LAW AND FUNDING FOR RACING BOARD OPERATIONS

HORSE RACING INDUSTRY AGREEMENT OF NOVEMBER 19, 2013

SYNOPSIS:

An agreement by the Horse Racing Industry would extend the “Advanced Deposit Wagering” law from its current sunset of January 31, 2014 to February 1, 2017. It also funds the Illinois Racing Board and provides for quarter horse purses through a new temporary surcharge of .2% on winning pari-mutuel wagers. Also included is a temporary permissive .5% surcharge on winning wagers by individual tracks to support their operations and purses, and the re-activation of 6 OTB licenses that existed before Sportsman’s Park closed. Those OTB’s would be operated by the 3 Cook County tracks.

DISCUSSION:

The Advanced Deposit Wagering (“ADW”) law was enacted in 2009 to regulate and tax pari-mutuel wagering on horse races conducted over the telephone or Internet. Prior to that law, this activity was conducted outside of regulation. The activity now is permitted only through ADW companies that are licensed by the Illinois Racing Board. These wagers ($122M in 2012) are taxed, with revenues supporting the operation of the Illinois Racing Board. This $122M is 18% of all pari-mutuel wagering in Illinois.

Monies from ADW, after taxes, are split between the “host” track (which contracts with the ADW company) and the associated horsemen purse account. More than $3.3M was generated by ADW to support horsemen purses in 2012.

Due to the loss of ADW tax revenues during the first 6 months of 2013, when the previous ADW law expired, the Racing Board is currently operating at a deficit. In September 2013, the Racing Board issued four different racing dates schedules for 2014, which varied with the possible reauthorization of ADW and obtaining supplemental funding. The worst schedule (if ADW is not reauthorized and no additional funding obtained) would result in Arlington Park’s regular race meet cut to be in half, Hawthorne’s meet going from over 100 days to just 15 days, Fairmount Park going down to 10 days, Balmoral going down to 13 days, and Maywood Park having no racing. This last schedule will result in massive loss of jobs at these racetracks, decimation of the Illinois breeding industry, loss of state tax revenues, and horsemen taking their business to out-of-state racetracks. The industry agreement would provide the supplemental funding needed by the Racing Board to oversee a full racing schedule in 2014, as well as continuation of ADW tax revenues to prevent this from happening in 2015 and 2016.

SUPPORTED BY:

Illinois Thoroughbred Horsemen’s Association

Illinois Harness Horsemen’s Association

Illinois Quarter Horse Association

Illinois Horsemen’s Benevolent Protection Association

Arlington Park Racecourse

Balmoral Park

Fairmount Park

Hawthorne Racecourse

Maywood Park

Twinspires.com

TVG

Betzotic

XpressBet

ADW Law Extension- Horse Racing Industry Agreement- (SB66 Claybourne Madigan)- Support.doc

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