Hawthorne Race Course filed for Chapter 11 bankruptcy Friday in an attempt to restructure its debt, attract a new investor and ultimately save the struggling horse racing industry in Illinois.
The filing comes a month after the Illinois Racing Board suspended the 134-year-old Stickney track’s harness racing license because of financial strains. Horse owners, trainers and breeders have gone unpaid since August, with more than 65 horse owners showing at least $580,000 in bounced checks from Hawthorne since then, according to the Illinois Harness Horsemen’s Association.
“This is a difficult day for Hawthorne and for my family which has owned Hawthorne for four generations over 117 years, but filing for reorganization is the right thing to do for the Illinois horsemen and for our employees and their families,” said Tim Carey, president and CEO of Hawthorne Race Course.
The reorganization plan intends to preserve 250 track workers’ jobs and it will prioritize paying the accrued purses to horse owners, the race course said.
Illinois’ gambling expansion law that passed in 2019 allowed Hawthorne Race Course to add casino games to help boost the flailing horse racing industry. But the race course has struggled to secure financing to ramp up its racino since then, putting the track in a financial crisis. Hawthorne is one of two horse race tracks left in Illinois, the other being in downstate Collinsville.
“The Debtors have faced substantial financial hardship in recent years,” Carey said, “driven by challenges affecting the horse racing industry in Illinois, initially due to the expansion of casino gaming and later compounded by an increasingly competitive sports betting market, as well as other industry-wide issues, including rising costs and increased regulatory fees related to simultaneously running a troubled business and building a new business.”
At last month’s Illinois Racing Board meeting, Hawthorne general manager John Walsh said the track had been working with a new financial partner and said they would “have something in place” within a month from then that would have had the track ready for thoroughbred racing in March.
Thoroughbred racing was scheduled to begin March 29.
The racing board had already canceled Jan. 3 and 4 harness races at the track for Hawthorne’s failure to submit required surety bonds. Other harness races in February were also canceled.
Carey said the bankruptcy filing became necessary after Hawthorne’s relationship with its lender and other creditors deteriorated. Other setbacks included Hawthorne’s sports wagering partner canceling its online and mobile sports betting and the discontinuation of some simulcast wagering at horse tracks across the country that resulted in judgments against debtors.
Hawthorne is working with the financial advisor Getzler Henrich & Associates to request a federal court approval of debtor-in-possession financing to fund its restructuring.
The bankruptcy declaration indicates a “substantial interest” from buyers and recapitalization partners in Hawthorne’s opportunity to build out its racino, the race course said.
