Legislative

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7-11-08

Thursday: July 10 Legislative Session:

The Senate did not call "motion to concur" on SB 2702 (3 yr extension of 3% Impact Fee) which had already "passed" in the House (and the Senate.. without the addition of some rules language) (The Senate would not accept the added "rules" language.) If called, it would have become law with the Governor's seal.

Consequently, the Senate attached language which was identical to SB 2702 to an existing "stripped" bill HB 5585, with the exception of the "rules" language being removed. It passed with a vote of 37 yes, 5 no. (SB 2702 above previously passed the House on a vote of 89 yes, 26 no.

We now have two virtually identical bills, each of which was overwhelmingly passed by each chamber, but neither can become law until accepted by the other chamber also.

There is serious concern as to whether HB 5585 will be allowed for vote in the House next week because sponsorship of the bill and the omission of "rules" language that Speaker Madigan insists be a part of all legislation; as is there concern that Senate President Jones will ever call SB 2702 for "concurrence".

Your President, Executive Director, and Legislative lobbying team will be in Springfield again next week to attempt to effect passage of SB 5585. In the meanwhile, there is continuing dialogue with members of the General Assembly in this regard.

Your IHHA President
George Bonomo

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6-30-08

Illinois Supreme Court Decision

The Illinois Riverboats did file a last minute appeal with the Illinois Supreme Court (again) regarding enforcement of HB1918. It appears that the monies which were to be released within the next few weeks will again be "held-up" pending IL. Supreme Court review. Based on the prior 7-0 decision, the belief is that there is no chance the boats will prevail; however, this will cause a delay in distribution of $$$ until action is taken by the court. They are in summer recess and will not reconvene until middle of September. They can, before then, if they choose, take action sooner. There is a feeling that this may occur within the next 3 weeks or so.......if not, then that decision will be made promptly upon their September return.

Note: There still remains the option of a "US Supreme Court" Appeal by the boats.

We will keep all advised of any developments.

Your IHHA President
George Bonomo

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Legislative Report

HB2702 ADW Legislation: There were meetings and discussions with race track management, Advance Deposit Wagering (ADW) provider, and legislators regarding proposed ADW legislation. While it was determined that the purse account would have benefited to the extent of $765,000 in the initial twelve (12) months,negotiations and discussions failed to provide results which would have provided the repeal of recapture, a directive of our Board. The IHHA was instrumental in preventing this legislation from being "called" and, accordingly it did not move forward in this session. (Note: Acceptable ADW language, including total and immediate repeal of recapture is included in all versions of the "major" gaming bill...see summary explanation re "final version" of HB2561)

HB2651 3% Impact Fee: With the help of Representative Bob Molaro, this legislation did move forward and we did testify in support of same in Executive Committee. It subsequently did pass the House with a vote of 89-26 and we were assured by Senate leadership that it would "pass" in the Senate; however, Senate leadership instead "stripped" this bill, and to use the words of House members, it was "hi-jacked" by the Senate, and replaced with language that eventually became the major gaming bill and sent back to the House for concurrence. The parliamentary "trick" by the Senate leadership ultimately destined this bill for failure. As noted, the House overwhelmingly supported this Impact Fee assistance and Representative Molaro attempted to undo the Senate's parliamentary procedure by "attaching" the Impact Fee Language to the now "stripped" HB2702. It was sent to the Senate for concurrence and it would then have become"law" since the Senate did indicate it would be accepted; however, the Senate leadership chose not to take any action and it "died" there. This legislation would have provided monies as described in "legislative synopsis" previously submitted and posted on IHHA website. The actual distribution to purse account does, though, depend upon ruling of the Illinois Supreme Court)

HB4758 "Poe's Bill"-Springfield Racing: We did offer testimony at Executive Committee hearing "in favor" of this proposed legislation. There was opposition testimony from Fairmount Park, some thoroughbred groups, and others. We did speak with Rep. Poe and he did express his thanks for our support. Feeling that they did not have adequate votes to call out of committee, action on this was deferred and it was not sent to the Senate for vote.

HB2651 "final version" Major Gaming Bill: We did review this entire bill with governor's staff and it did contain all the language we worked so very hard to incorporate in earlier versions. This provided major benefit to our industry. It is a "slots on track" bill which affords horsemen 15% Adjusted Gross Revenue (AGR) to purses, 1.46% to Breeders Funds, Protection of Live Racing, budged dollars for proper testing, improved commissions from OTB parlors, total and immediate repeal of recapture, acceptable enactment of ADW wagering.......a good bill for us. If there is any good news here, it is that despite concerted efforts by riverboats, racetracks, and some legislators to change some of the language to the detriment of horsemen, we were able to maintain our position on all those items important to us. None were allowed to be changed.

This bill was "passed" by the Senate, albeit with some amendments which made it near impossible to be enacted, and sent to the House for concurrence and vote. There was an Executive Committee meeting late Saturday evening and it passed out of that committee with a vote of 17-11 and was then sent to the House for vote. House leadership used a parliamentary maneuver to "table" the vote on this bill, thus preventing it from being presented to the members for vote. The House and Senate adjourned without taking any action on this legislation.

As noted, HB2651 "final version" is a good bill and does contain all those provisions which will provide great benefit to our industry. Some have indicated that the governor may call for a "special session" within two(2) to three(3) weeks and this legislation will be high priority for the state. The lag time here will give them time to work out some of the concerns of the City of Chicago (they expressed opposition to the HB2561 in its present form), and others. Some others have indicated we may need to wait until November before the general assembly takes any action on any issues. There is no firm opinion in this regard.

I wish to express a sincere appreciation and thanks to our lobbyists and legislative team. The final weeks were intense with long hours in Springfield meeting with and discussing issues with members of the general assembly and staff . We were extremely effective in getting our message across. That is the reason horsemen's' provisions were not disturbed in spite of extreme pressure from other segments. While I am proud of our efforts and the manner in which we comported ourselves (we continue to gain respect and consideration from all the general assembly and staff) , I am disappointed that this session did not provide the needed legislative relief for our horsemen. We will continue to apply the pressure and present the issues. We will continue to ask for your help.....we need to help ourselves.

Respectfully presented:
George Bonomo, President

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IHHA LOBBY DAY REPORT

The IHHA is happy to report that “Rally Day” in Springfield on Monday was a success. All of the horseman’s group’s were united as one and sent a strong message to our legislators that we desperately need help. A press conference was held in the afternoon, followed by a reception at night. All in attendance were supportive of our goals and said they would do all they can to help. Thanks to all who attended. You can download the video of the press conference here: http://www.advanceddigitalmedia.tv/production_work.htm
You will need to right-click on the link below "WMV web video" and choose "Save Link As" to download the file and then play it on your computer.

Also, here are just a few of several articles and newscasts that ran: (Click Here)

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Legislative Activities Report January 8, 2008

The IHHA did give testimony to the Committee of Gaming conducted by Chairman, Lou Lang and Representative Molaro and attended by key legislators including Speaker Madigan. A copy of our testimony is also on your IHHA website. (see below after legislative report)

HB4194 is good legislation. Although not yet voted on by either house, it remains the only active revenue bill in the General Assembly. It currently provides for:

Key points regarding the IHHA:

1. Total and complete repeal of recapture immediately upon commencement of slot revenues

2. Resumption of standardbred racing at Fairmount Park

3. Protection of live racing opportunities

4. Fifteen per cent (15%) of AGR (Adjusted Gross Revenues) from slots directly to purse account. (estimated to double purse account when fully implemented)

5. Additional monies for breeders’ awards and county and state fair programs. (not from horsemens’ monies)

6. Adequate funding for Illinois Dept. of Agriculture for testing programs.

7. Increased commissions from first generation OTBs resulting in estimated additional $1.4 million to standardbred purse account.

8. Even splits on breakage

9. ADW (Advance Deposit Wagering).

a) Any provider contract requires IHHA approval and consent

b) Horsemen are equal partners in all ADW commissions.

(There are some modifications as per testimony we are seeking to add.)

We have been extremely active over the past several weeks and months and will continue to work diligently towards accomplishing our goals. We have been in constant contact with key legislators, our lobbyists, and “bill writers” .. all members of the General Assembly and staff, (on a daily basis including week-ends) We are continuing with our set goal of being “pro-active”. It does appear after meeting with the committee and its members that there will be continuing discussions regarding this legislation over the next thirty (30) days and we are cautiously optimistic that positive action will follow.

George Bonomo, President - Tony Somone, Executive Director

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Illinois Harness Horsemen’s Association

Testimony

Presented to the House Committee on Gaming
By: George A. Bonomo, President
Tuesday January 8, 2008

Chairman Lang and members of the House Committee on Gaming. Good Afternoon and thank you for allowing us to present testimony on behalf the Illinois Harness Horsemen’s Association and the more than forty-thousand (40,000) persons associated with this important Illinois industry.

This has been a long, hard road and we are now at a point where there is “light at the end of tunnel”. We do appreciate the efforts on the part the sponsors, Chairman Lang and Representative Molaro , the understanding of Speaker Madigan and others, and of all contributors who have worked to bring this jobs, revenue bill to this committee for consideration.

House Bill 4194 is a good bill…..House Bill 4194 surely does address those issues important to the State, to an industry vital to the economy of our State, and to the those individuals concerned about their jobs.

The Illinois Harness Horsemen’s Association is enthusiastically supportive of this proposed good legislation which provides the needed assistance to the State and our industry. We do suggest, however, that some provisions need clarification in order to promote and preserve the legislative intent of this most important undertaking. We would like to comment concerning the key issues contained in House Bill 4194.

We are in a period of rapidly declining revenues, loss of jobs, becoming less of a contributing factor to economy of the State. We recognized the need to increase revenue for purse levels to be competitive with other venues, to stem the flight, and loss, of jobs to other states, to provide for and protect the welfare of those persons engaged in this industry. All of us worked together to achieve our goals through House Bill 4194…it is good legislation.

The IHHA believes that HB4194 will increase purse structure wherein Illinois will once again be competitive with other States who have preceded us with similar legislation. The percentage allocated for pure purses is essential to our survival. Allocations to the struggling Illinois breeding industry, Illinois Department of Agriculture, Illinois Racing Board, and other named beneficiaries from sources other than purses are necessary for this once proud Illinois industry to survive.

Protection of live racing opportunities is most important to preserving our industry. House Bill 4194 does contain that necessary protection. We would suggest some minor language modifications which are not conceptual but add to clarity.

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HB4194 “Fixes” Problems Facing Horseracing in Illinois

HB4194 Repeals Purse recapture – The IHHA had suggested the immediate repeal of purse recapture. House Bill 4194 does repeals purse recapture upon commencement of slots revenue flow. This is an acceptable compromise. While it does cost horsemen’s purses several million dollars, a concession to track operators, it is a concession that we believe is important to cause this legislation to move forward.

HB4194 Addresses Equalizing Splits on Some Wagers – HB4194 does not even splits on all wagers. It does bring horsemen and track operators closer to a true partnership. We had initially suggested a true partnering; however, this good legislation does bring us closer to this goal. Although our concession here will result in $4.5 million less purses, we are willing to compromise our position here in order that this legislation move forward.

HB4194 Evens Splits on Breakage – HB4194 gives horsemen their fair share of breakage and is another important first step in fixing some of the problems facing racing in Illinois today. This is good legislation.

HB4194 Contains No Money for Pre-race Drug Testing - The IHHA had suggested that $1.5 million of the tax revenues from slot revenues be directed to the Illinois Racing Board to conduct comprehensive testing of racehorses in order to preserve the integrity of our industry. This assistance needs to be addressed in the final version HB4194.

HB4194 Allows Advance Deposit Wagering (ADW) – IHHA supports in concept the idea of legalizing advance deposit wagering in Illinois. Millions of dollars are lost each year because Illinois does not allow ADW as do other venues. This language does need modification and clarification. We need to insure that all Illinois licensed ADW providers take and transmit Illinois live racing to Illinois residents desiring to place wagers on the Illinois product as per language proposed by the Illinois Racing Board.

HB4194 Returns Harness Racing to Fairmount Park- Harness racing currently has no downstate venue. This would appear to be contrary to good business practice and is detrimental to the standardbred industry. HB4194 creates an opportunity for standardbred racing to return to Fairmount Park and provide needed opportunities for downstate Illinois horsemen. The IHHA have agreed to a position with Fairmount Park wherein we would receive minimum of 25 racing days, again a compromise from our initial suggestions of 45-60 days, and a 57/43 split of the purses generated by slot revenues. In exchange for this concession we agreed to give up 70% of our nighttime simulcasting revenues generated through Fairmount’s system. The language is this draft does not appear to reflect this position. We would suggest that this related language be modified and clarified or at least provide for a deferral of some of this intended standardbred revenue be directed to Illinois State and County fair programs to support downstate Illinois horsemen.

Conclusion

The IHHA believes, that with a understandable modification and clarification, HB4194 will provide a stable revenue stream for horse racing in Illinois, preserve jobs, and provide benefit to the State and the more than forty-thousand (40,000) persons involved in this industry essential to the Illinois economy.

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October 19, 2007

As one of the many IHHA ongoing efforts, this letter by IHHA President George Bonomo, expresses the need for expansion in gaming. It was recently featured in the Arlington Heights Daily Herald (3rd largest paper in state and also in the Tribune's online edition. The letter will probably run in other local state papers.

To the Editor,

The recent impasse between the executive and legislative branches of state government offers a good opportunity to revisit the issue of horse racing in Illinois and the potential revenue that can be derived from this economic powerhouse.

There is financial crisis at every juncture in Illinois government. The RTA, CTA and downstate mass transit cry for new revenue. Roads are in dismal condition across the state. Schools desperately need new infrastructure and the governor has asked for more money to fund healthcare initiatives.

With no appetite for higher taxes, our elected officials are left with few options. Casino gaming at racetracks is one option that doesn't raise taxes and provides a funding mechanism to bond billions of dollars in new vital programs. Furthermore it ensures continued viability of an industry that employs 40,000 people while pumping more than $1 billion into our economy every year.

Virtually every other state that races horses has moved to this revenue enhancer. Key to our support, of course, is a fair and proper split of revenue that can improve the racing product through higher purses. If we stem the exodus of horsemen leaving Illinois for greener pastures in the East, we guarantee a bright future for the thousands who are employed in horseracing here.

The argument that some do not want an expansion of gambling doesn't work here. Wagering already takes place at all Illinois race tracks. To install other gaming options is not an expansion of gambling anymore than the adding of more positions to existing casinos. And unlike existing casinos, tracks offer new venues to attract patrons from other locales including the many who cross our border into Indiana every year.

It makes perfect sense and it goes a long way towards solving Illinois’ dire financial woes. Our lawmakers and the governor should wake up and smell the roses while we run for them.

Sincerely,

George Bonomo
President

Illinois Harness Horsemen’s Association

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HB950 SALES TAX EXEMPTION

Governor Blagojevich signed HB950 August 14, 2007. This is now prevailing law. This is a huge victory for Illinois horsemen and would not have been accomplished without the efforts of your IHHA and effective lobbying team. Without the enactment of this legislation, all horsemen would have owed the State 6.75% tax plus penalties and interest applied to the cost of all horses purchased or claimed from May 2000 forward Thanks to all who worked hard in getting this bill drafted and passed.

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IMPORTANT NEWS

Text of comments presented to Gaming Committee meeting, Rep. Lou Lang, Chairman.

ILLINOIS HARNESS HORSEMEN’S ASSOCIATION
RE: ADDITIONAL LIMITED GAMING, APRIL 13 , 2007

As need continues for new revenues to fund vital projects in Illinois, particularly education and health welfare, the Illinois Harness Horsemen’s Association believes that a viable solution is through additional limited gaming (slots) at existing facilities, either riverboats or race tracks, or both.

Electronic wagering machines, slots, are a natural outgrowth of pari-mutuel wagering that already occurs throughout Illinois.. Nearly every state in the United States that hosts horse racing also offers slots at their racetracks or, a sharing of revenues from those venues which adversely affect this important and essential agribusiness. These progressive states have reaped huge benefits for their citizens. Illinois is lagging behind in being one of the few states that has not implemented this revenue enhancer for its’ citizens and its’ important agribusiness community.

The benefits are obvious. Direct revenue for the State’s many needed programs is generated and a small portion of that revenue saves and preserves an industry vital to the agricultural economy of Illinois; from the veterinarians and caretakers who provide for these equine athletes, the farmers who grow our feed, the so many others employed in our industry, we represent the more than 40,000 legitimate business people and employees involved in various aspects of this important industry, with an investment of probably more than $5 billion dollars in the State of Illinois looking to achieve a fair and reasonable return on investment and continued job security. To place an additional burden on the State’s welfare system through allowing the steady decline of this agribusiness and its’ loss of jobs is unconscionable.

Incredibly, Illinois has continued to neglect this valuable economic engine and has caused a continuing outflow of prominent stables, horses, owners, drivers, and jockeys to those more progressive states that have recognized the importance of their agricultural industries and have implemented the plans to save an industry! These states are capturing untold hundred of millions of dollars that belong in Illinois…and that is in addition to the hundreds of millions more that could flow to state funding for other essential programs if slots on tracks were allowed or revenue sharing from existing riverboats was implemented. These other states have had the foresight to recognize that such a revenue enhancer would lead to a healthier industry and protect and provide thousands more jobs. We need to stem the building negative impact to our agricultural economy by taking the needed action NOW.! ! ! Next year will be too late… …irreparable damage will have been done and this once nationally prominent Illinois industry will not likely recover.

Since 1983, when racetracks and horsemen shared equally in revenues generated by wagering on horse races, the law has been changed several times to the sole benefit of the race tracks. Between 1983 and 2005, the race tracks received $820 million dollars more from generated handle than was allowed to the horsemen ! !

In an attempt to assist the industry, a 1995 amendment to the Horse Racing Act was enacted allowing for simulcasting of complete race programs. Along with this amendment, ‘recapture” was created to offset any diverse effects to the race tracks. Its desired effects were not realized and the race tracks have benefited by more than 130 million dollars ! ! from this provision of the law, at the expense of the horsemen . Although a 1999 amendment provided that the horsemen be held harmless for this drastic reduction in purse account revenue, and that the “General Assembly shall appropriate sufficient funds from the General Revenue Fund to the Department of Agriculture for payment…..” of monies to the racetracks, this provision of the law was ignored and horsemen have had to bear the full burden of this inequity. To date, we, the horsemen, are owed more than $100 million dollars in unappropriated recapture reimbursement by the State.

In this time of tighter and tighter revenue streams available to the State, passage of this essential and helpful legislation will enable Governor Blagojevich and our other elected officials to better serve their constituents and fill the budgetary gaps, and, preserve and protect the welfare of the more than 40,000 people involved in our industry.

Of paramount importance is, of course, the preservation of live racing in Illinois which translates in jobs, jobs, jobs, and that individual horsemen, not the wealthy track owners and entertainment corporations, derive fair and maximum benefit of any new revenue from proposed new legislation in this area.. Our members of the Illinois Harness Horsemen’s Association are the backbone of the industry. We are the trainers, breeders, drivers, caretakers…..people….in need of your understanding and help. We will not be poster children for wealthy corporations and track owners who have reaped most of the benefits in the past. We NEED our fair share through a more equitable distribution of purse monies in order that we can survive.

We urge all of our concerned elected officials to do what is necessary and right to help all Illinois citizens and to improve and prop up the financial foundations of one of Illinois most important industries. Support additional limited gaming at these existing venues, either the race tracks or riverboats, or both, along with a fair and equitable distribution of the derived benefits. Let’s not allow Illinois to be left behind those other now more visionary states.

George Bonomo, President
Illinois Harness Horsemen’s Association

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IMPORTANT NEWS

Text of comments presented to Gaming Committee meeting, Rep. Lou Lang, Chairman.

ILLINOIS HARNESS HORSEMEN’S ASSOCIATION
RE: ADDITIONAL LIMITED GAMING, APRIL 13 , 2007

George Bonomo, President
Illinois Harness Horsemen’s Association