Hinsdale, IL – On Friday (Feb. 27), the Illinois Harness Horsemen’s Association met with representatives from Hawthorne Race Course, where we learned that they would be filing for Chapter 11 reorganization bankruptcy.
We still do not have all of the details, but we will be in court early next week. We will release more information as soon as possible.
Here is Hawthorne’s official press release:
HAWTHORNE FILES CHAPTER 11 REORGANIZATION TO SAVE ILLINOIS HORSE RACING
Reorganization Prioritizes Paying Horsemen Purses and Track Workers
Cites Challenges of Supporting Illinois Horse Racing While Launching Racino
Goal is to Restructure Company Debt and Preserve Horse Racing
Chicago – In a bid to save horse racing in Illinois and preserve 250 jobs and the homes of hundreds of backside workers and their families, Hawthorne Race Course, and its related companies, has filed for a Chapter 11 Reorganization in Federal Bankruptcy Court in Chicago today (Feb. 27). The reorganization plan will prioritize paying accrued purses to the Illinois Horsemen as well as payroll for the track employees while restructuring the company’s debt.
The goal of the reorganization is to attract a buyer or investor willing to recapitalize Hawthorne and restart operations of the racecourse while maximizing recovery to the company’s creditors. Hawthorne will be working with financial advisor Getzler Henrich & Associates, LLC and requests the Federal Court approve Debtor-in-Possession financing to assist with the restructuring process.
“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.
Carey’s declaration in support of Hawthorne’s bankruptcy filings described the challenges and headwinds Hawthorne faced while attempting to continue its struggling operation while also supporting the entire horseracing industry in Northern Illinois and launching a “Racino,” a brick-and-mortar betting parlor at the racetrack.
“In 2016 with the closing of the Balmoral and Maywood harness facilities, Hawthorne reaffirmed its commitment to horse racing and saved hundreds of harness horsemen businesses and thousands of harness horsemen jobs thus becoming the country’s only dual breed racetrack, running both thoroughbred and harness racing on the same track by converting the surface of the track prior to the commencement of a respective race meeting.
“Since 2022 and the closing of Arlington Racecourse, we undertook the sole responsibility of underwriting the Illinois horseracing industry in Northern Illinois and are the last racetrack operating in Northern Illinois bearing the increased burden of greater purses and regulatory expenses.”
Carey detailed the human element of saving Hawthorne.
“The racetrack employs over 250 people with its longest tenured employee spending 52 years at the track. Backside residence on the racetrack property consisting of licensed horsemen and their families varies depending on any racing season but will vary from a low of approximately 290 up to 500 or more. There have been years when over 900 people lived on the backside. The families live rent free and receive medical and dental care funded almost entirely by Hawthorne. These families are part of the community, supporting local businesses, attending church and sending their kids to local schools. Currently there are approximately 100 children, age 18 or under, living on the premises. There is a gentleman who is 84 years old and has been working at the racetrack and living on the backside for 72 years, arriving when he was 12 years old.”
After the casino expansion law passed the Illinois General Assembly and was signed into law by Gov. J.B. Pritzker in 2019, Hawthorne received a preliminary finding of suitability from the Illinois Gaming Board (IGB) to build and operate a “Racino,” with casino style gambling machines and table games at the racecourse. The IGB also issued Hawthorne a Master Sports Wagering License which permitted Hawthorne to offer retail and online sports betting. In 2024, the IGB approved continued licensing suitability for Hawthorne and renewed its sports wagering license.
At the same time, while winning approvals for the Racino, the horse racing industry continued to face stiff headwinds. Carey’s declaration describes the challenges for the Bankruptcy Court:
“The Debtors have faced substantial financial hardship in recent years, 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…”
The filing details that a bankruptcy filing became a required step when Hawthorne’s relationship with its lender and other creditors materially eroded. This led to a rapid succession of setbacks, foremost of which was the inability to continue the harness racing season, in addition to: “… the termination of internet and mobile sports wagering by HRC’s sports wagering partner; and the discontinuation of certain simulcast wagering arrangements by other horse racing tracks throughout the United States, resulting in litigation and monetary judgments against the Debtors.”