Hours after the Illinois Racing Board denied bankrupt Hawthorne Race Course a racing license and racing dates for 2027, the IRB and the Illinois Gaming Board asked Judge Timothy Barnes to authorize termination of the track's current racing and sports betting licenses.
The motions were filed shortly before the close of business Sept. 16. The Racing Board earlier in the day announced Hawthorne's 2027 applications were deficient and rejected them out of hand.
Hawthorne's property was sold for redevelopment after a bankruptcy auction. That deal closed Sept. 1.
Both state regulatory agencies had been silent observers of the court proceedings as Hawthorne continued to hold valid licenses for 2026. They also were restrained by an "automatic stay" of disciplinary actions against entities in bankruptcy. The motions asked Barnes to rule the stay does not apply in Hawthorne's case.
The Racing Board did not disclose at its dates allocation hearing what deficiencies were involved in Hawthorne's application. It elaborated in the motion submitted to the bankruptcy court hours later, indicating its intention to revoke the current license. The IRB said Hawthorne was "critically noncompliant with (the) Racing Act as they are no longer in possession of a finished race track nor do Debtors have a contract or lease for a finished race track ..."
The Board also cited Hawthorne's failure to pay a legally mandated $720,000 assessment to fund medical services, counseling, and other charitable works for backstretch workers; failure to provide advance notice before closing one of its off-track betting parlors; and long delay in payment of purse money to horsemen; coupled with missing weekly bookkeeper reports.
"Given the regulatory nature of the proceedings that need to be initiated, and due to the Racing Board's police and regulatory powers ... the Board has a fundamental right to initiate administrative proceedings to revoke Debtors' organization license," the motion said.
The document also noted that without an organization license, Hawthorne cannot hold OTB or advance-deposit wagering licenses.
"Given the substantive violations Debtor has incurred with respect to its organization license, the Racing Board similarly must take regulatory action with respect to Debtors' derivative licenses," it concluded.
The Gaming Board, in a separate motion, said revocation of the organization license also would make Hawthorne ineligible to hold a sports betting license.
There are some complications for the bankruptcy court to sort out, likely starting at a hearing Sept. 23.
The court and creditors have questioned what Hawthorne has done with money earned from the OTB operations since the sale was approved and criticized the lack of clear accounting by track management.
Shutting down the Chicago-area OTBs could hurt wagering on races at the lone remaining Illinois trackÆFairmount Park in Collinsville, near St. Louis Mo. Fairmount general manager Vince Gebbart raised that issue at the Racing Board meeting, estimating the potential loss at $2.5 million or more. Fairmount can conduct OTB operations only within a 150-mile radius of its base and legislation would be required to lift that restriction.
Another issue left unresolved is the status of a long-delayed Standardbred track and racino intended for the south Chicago suburbs. Legislation passed in 2019 authorized a track within a closely defined geographic area but, remarkably, gave Hawthorne veto power over the award of an organizational license. Racing Board officials previously said the veto power would disappear if Hawthorne lost its own license but the issue was not addressed by the board or in the motions presented to the court.
There has been no Standardbred racing in the state since Hawthorne's license for that breed was suspended at the first of the year.
