After two days of lengthy meetings, members of the Illinois Harness Horsemen’s Association (IHHA) and the management of Balmoral and Maywood Parks have reached an impasse.
"Right now, we have no contract for 2011, and this is a real concern," said IHHA executive director Tony Somone. "The tracks gave us an ultimatum saying they want twenty percent more in recapture money for 2011."
Annually, the IHHA has been paying just 30 percent in recapture money to Illinois’ two harness venues, and deferring 70 percent. The racetracks now want that amount split 50-50. Every 10 percent increase in recapture amounts to $450,000, Somone noted.
"That means that an extra 20 percent is $900,000 that the horsemen have to give to the tracks," Somone explained. "The tracks believe that because the horsemen did the fiscally right thing and paid them back the recapture and took a forty-five percent purse cut in 2010, that we can exist like that again in 2011. They think we should be able to keep purses where they are and survive, and many of our horsemen just can’t do that. So many are just hanging on by a string as it is."
Somone said the tracks would agree to let the horsemen continue to pay 30 percent in recapture for 2011, with the stipulation that there would be no purse increases next year, no matter how much money is in the purse account.
"We would have to agree to no purse increases in 2011 and I just don’t see that happening," Somone said. "The racetracks are just the custodians of our purse account and they shouldn’t be able to use our money to pay their bills. Right now our purse account is a $220,000 to the good. We’ll lose a little bit of that money in the next three weeks because of what is being paid out to purses."
December is traditionally a weak wagering month, Somone added, and said he expects the purse account to be at an estimated $150,000 by Dec. 31, 2010.
"However, on Jan. 1, 2011, our purse account will receive the ‘outs’ money," he noted.
The "outs" monies are those left from uncashed mutuel tickets from 2009, as patrons are given one year to cash their tickets. That money, usually totaling close to $1 million is then divided equally between the tracks and the horsemen.
"That ‘outs’ number is estimated to be about $450,000 to horsemen (a total of $900,000)," Somone said. "The first week of January our purse account will be $600,000 to the good. Traditionally, for the last 20 years, we have had it written in our contract that if the purse account reaches plus $300,000 or negative $300,000 there is to be a purse increase or a purse decrease. So we’re due for an increase that is probably around five percent, and the tracks are arguing that they can’t afford to do that.
"Traditionally, we (the horsemen) usually do pretty well in January and February," Somone continued. "But if we take the deal the tracks are offering to keep paying only thirty percent in recapture without a purse increase, it makes no sense. There could be $1million sitting in our purse account and we won’t be able to touch it, if we agree to that. The tracks tell us that they don’t have money to pay their bills and they need our money."
As a result of this deadlock, the IHHA and racetrack management will meet with the Illinois Racing Board (IRB) on Tuesday, Dec. 21.
"The IRB has been made aware of our situation and the next move is to take direction from them," Somone said. "My guess is that the IRB will make some type of compromise. The IRB can force us to pay that recapture if they want to.
"If that’s the case, and we have to pay 50 percent in recapture, then the horsemen are going to have to take a few weeks off to build up our purse account," Somone stressed. "Without that, we’re looking at another substantial purse cut, and the horsemen can’t afford to do that right now without taking time off."
If favorable legislation passes the Illinois House and is signed into law by the Governor when the Illinois legislature reconvenes on Jan. 3, 2011, the horsemen wouldn’t see any of those revenues until 2012.
"In the short term, having our legislation passed wouldn’t help us at all in 2011," Somone said. "We’d still be paying recapture—no matter what the percentage—in 2011. However, if it is passed, then 2012 will be a great year for us, and once that first quarter drops into the first slot machine, recapture is history." (by Kim Rinker)