IllinoisRacingNews_January2016

VOL. 44, NO. 1/JANUARY 2016 OFFICIAL PUBLICATION OF THE ILLINOIS THOROUGHBRED BREEDERS AND OWNERS FOUNDATION “Past Performances reprinted by permission of copyright owner, Daily Racing Form, Inc, Reproduction prohibited.” CONTENTS A Message from the ITBOF . . . . . . . . . . . . . . . . . . . By Dan Arrigo . . . . . . . . . . . . . . . . . . . . . . . . .3 Illinois Horses Featured at Hawthorne . . . . . . . . . . By David Zenner . . . . . . . . . . . . . . . . . . . . . .4 Commissioner Wins Hawthorne Gold Cup . . . . . . By Neil Milbert . . . . . . . . . . . . . . . . . . . . . . . .6 Illinois Horse Fair, 2016 . . . . . . . . . . . . . . . . . . . . . . By David Nobbe . . . . . . . . . . . . . . . . . . . . . . .7 ITBOF Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 A Smorgasbord of Food for Thought . . . . . . . . . . . By Neil Milbert . . . . . . . . . . . . . . . . . . . . . . . .9 Point of View . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . By Ray Hallett . . . . . . . . . . . . . . . . . . . . . . .10 Jurisdiction of the U.S. Tax Court . . . . . . . . . . . . . . By John Alan Cohan . . . . . . . . . . . . . . . . . .11 Professional Services. . . . . . . . . . . . . . . . . . . 12 Classifieds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Copyright 2016. Written permission must be ON  THE  COVER:obtained to reprint photographs and editorial material. Congratulations to The Pizza Man and his connections for winning ILLINOIS RACING NEWS, (ISSN  #1083-8309) Opinions expressed in this publication are those the Eclipse Award for 2015 Turf Horseof the writers and do not necessarily represent theviews of the management.

Please Subscribe and Advertiseby Dan Arrigo, Illinois Thoroughbred Breeders and Owners Foundation The Illinois Thoroughbred Breeders and Owners Foundation So, please, if you are interested in receiving news about thehas agreed to take over the publication of the Illinois Racing sport of kings, thoroughbred racing, in the state of Illinois, sub-News. The ITBOF did this solely to secure a news medium that scribe to the IRN. Most of you who review this publication willallows everyone who has an interest in Illinois thoroughbred rac- have been past subscribers to the magazine. The ITBOF asks foring and all supporting aspects of that racing to be allowed a place your support again.to keep abreast of information of interest on the Illinois front. In addition, if you have a farm or services or products that The ITBOF is not undertaking this effort at publishing con- support all of us attempting to maintain the sport of thoroughbredtemporary information regarding Illinois racing for a profit. The racing in Illinois, please consider the IRN as a medium for adver-ITBOF is an Illinois not for profit corporation. Each person read- tising your services.ing this article can corroborate that fact by reviewing our finan-cial statements. The Horse Racing Act of 1975 mandates that the Of course, you may want to consider wrapping your subscrip-ITBOF furnish audited statements to the state annually. The state- tion and your advertising into a premium membership in thements are immediately available to anyone that wishes to see ITBOF. Most of you are already members of the ITBOF becausethem. of the action of the Board of Directors of ITBOF in amending the by-laws of the ITBOF. By contributing to the ITBOF through a The staffing of the ITBOF is done on an as needed basis. The premium membership, you can achieve additional benefits thatITBOF has one full-time, paid employee and his salary is rather will enhance your participation in Illinois thoroughbred racing,minimal when compared to similar positions throughout the whatever that participation might be now and in the future.United States. Besides his salary, all other expenses are incurredby job and on an as needed basis. This method of keeping costs as Regardless of what you decide to do, please know that yourlow as possible is being carried over to the operation of the IRN. support that is shown when you read this article or any issue of the IRN is of vital importance to the Illinois program That inter- But, even though the officers of the ITBOF volunteer their est and your continuing interest breathes life into the Illinois thor-time and other costs are kept as low as possible, the operation of oughbred racing program. That interest keeps Illinoisthe IRN cannot be conducted without subscriptions. The sub- thoroughbred racing alive.scriptions, as well as advertising, basically allow the publicationto conduct a newsworthy and professional publication. To subscribe to or advertise in the Illinois Racing News, please contact Dan Arrigo at the Illinois Thoroughbred Breeders Subscriptions and advertising allow ITBOF to retain the indi- and Owners Foundation, P.O. Box 578, Arlington Heights, Illinoisvidual professionals that provide content for the IRN. In short, 60006; or call 847-253-3670 or go online to ilracingnews.com.subscriptions and advertising will allow the ITBOF to continuethe publication of the IRN in a manner that makes the contentworthy of your review. ILLINOIS RACING NEWS / JANUARY 2016 / 3

Illinois Horses Featured at Hawthorne by David Zenner The Hawthorne Gold Cup undercard featured two more of the Sent off as the 11-10 betting choice, Recount paid $4.20, $3.20 andIllinois-hybrid stakes (Illinois-bred unless not filled and then opened to $2.20. Purely Given returned $5.20 and $2.40. Creative Art paid $3.00.non-Illinois-bred nominees) each won by Prairie Staters while the fol-lowing two weekends saw Illinois-bred juveniles compete around two The Pershing Handicapturns to wrap up the autumn meet stakes slate. Puntsville Gr./ro. f. ‘12, by Cashel Castle – Delville, by PetionvilleThe Blackhawk Handicap Breeder/Owner: S. D. Brilie Ltd. Partnership (Ill.)Recount Trainer: Michele BoyceB. g. ‘12, by Limehouse – Lucky in Love, by Bold Badgett Jockey: Victor SantiagoBreeder: Barney Gallagher and Anne Gallagher (Ill.)Owner: Doubledown Stables Inc.Trainer: Jimmy DiVitoJockey: Tim Thornton Puntsville. Photo courtesy of FourFootedFoto.Recount. Photo courtesy of FourFootedFoto. S. D. Brilie Limited’s Puntsville recorded her third straight victory when she scored by 3 3/4 lengths in the inaugural edition of the Doubledown Stables’ Recount was a gate-to-wire 5-1/2-length victor “Illinois-preferred” Pershing Handicap for fillies and mares.in the inaugural running of the $50,000 Blackhawk Handicap, an“Illinois-preferred” race. With Tim Thornton in the irons, the Jim The win was the third straight of the Hawthorne meet for theDiVito-trained son of Limehouse covered the six furlongs in a brisk Michele Boyce-trained daughter of Cashel Castle who covered the six1:08.96 after posting fractions of 22.42 seconds, 45.64 seconds and panels in 1:10 flat and paid $5.40, $3.40 and $2.60 as the 17-10 post57.21 seconds. time choice. “He ran a great race,” Thornton said. “I’ve been working him for Ridden by Victor Santiago, the three-year-old filly was just off theawhile and he’s been working great. I knew we were the best speed in leader through a quarter mile in 22.13 seconds. Taking the lead shortlythe race and when we left, I just wanted to coast along as long as possi- after, she clicked off a half-mile in 45.60 and a five furlong-split ofble. When we hit the eighth pole, he just exploded. Even though the 57.35 seconds en route to the facile victory.track seemed a bit tiring, he just cruised along.” “I knew there were a couple of other speed horses in the race and I The Blackhawks was the fifth stakes victory for the three-year-old wanted to break well and sit right off of them.” Santiago acknowledged.bay gelding who was Champion Illinois-bred Two-year-old in 2014. It “But today she broke so sharply that I just sat where I was and waited.was sixth victory, five of which have come in stakes races including last She did it all on her own. I had a lot of confidence in this filly.”year’s Grade III Arlington-Washington Futurity. He added $30,000 to hisbankroll, which now stands at $256,297. The $30,000 winner’s share of the purse boosted her career earnings to $154,160. Purely Given rallied late to overtake Creative Art for the place spot.Crewman and Luv Bandit completed the order of finish. Rosie My Rosie ($3.40 and $2.60) rallied from far back to run sec- ond in the field of 10 distaffers, a length clear of Canette ($3.80) and Wildwood Kantharos ($2.60) who finished in a dead-heat for show.4 / ILLINOIS RACING NEWS / JANUARY 2016

The Pat Whitworth DebutanteSilver LodeGr./ro. f ‘13, by Cashel Castle – Shotgun Persuasion,by Stephen Got EvenBreeder: DLT Thoroughbreds LLC (Ill.)Owner: TNT Thoroughbreds VTrainer: Doug MatthewsJockey: Santo Sanjur Richie the Bull. Photo courtesy of FourFootedFoto.Silver Lode. Photo courtesy of FourFootedFoto. “He’s a nice horse,” Baird said. “For the first time running that dis- tance around two turns he handled himself well, really professional. He Despite a troubled trip, T N T Thoroughbreds V LLC’s Silver Lode was no problem. He finished full of run.”rallied from next-to-last at the half-mile to win the $71,125 PatWhitworth Illinois Debutante by 1 1/4 lengths on Dec. 5 at Hawthorne Navy Seebee got out to an early lead, getting the opening quarterRace Course. mile in 24.19 seconds before Richie the Bull took over as the field entered the backstretch. He got the half in 48.07 seconds, three-quarters With Santo Sanjur aboard, the Doug Matthews-trained daughter of in 1:13.30 and the mile in 1:38.98 while continuing to draw away fromCashel Castle covered the mile and a sixteenth over a fast track in his rivals.1:47.45. Navy Seabee was a clear second, 1 1/4 lengths ahead of third-place “We got into some trouble early but I wasn’t really worried,” Sanjur runner Cashel Rock. Moonshiner, Gary Luke and Mystic Preacher com-said. “I knew I had a lot of horse. We stayed inside and saved ground pleted the order of finish.but when I guided her to the outside near the quarter pole, she just tookoff. I knew right away that were going to win the race.” With the scratch of morning-line favorite Shogood, Richie the Bull was sent off as the prohibitive 3-10 choice and paid $2.60, $2.10 and Earlier in the year, the grey/roan filly was second in the Arlington- $2.10. Navy Seabee returned $4 and $2.40. Cashel Rock paid $2.10.Washington Lassie (Listed) and was coming into the race off a fourth-place finish in open company at Keeneland. The win in Debutante kept Finish Lines: With one week to go in the fall meet (which for statis-her record a perfect two-for-two against state-bred rivals. She earned tical purposes ends Dec. 31 with Jan. 1-2 counting toward the spring$42,675 to more than double her bankroll to $79,340. meet), Chris Emigh has 60 wins, Tim Thornton 42 and Julio Felix 35. Partay, who led in mid-stretch before being overtaken by the winner, In the trainers’ race, Scott Becker has 29, Manny Perez 20, and Chrisfinished second in the 10-horse lineup. “My filly ran good,” said her Dorris 16. Four trainers (John Haran, Percy Scherbenske, Clay Brinsonrider, Edgar Perez. “I had a lot of filly, but the #10 (winner Silver Lode) and Jimmy DiVito) are tied with 12 wins apiece.was too much for her.” William Stiritz has wrapped up another owners’ crown with 29 wins Lakota Rode was third under Carlos Montalvo, who said, “My trip through Dec. 19 well clear of John Haran and Doubledown Stables whowas excellent. I had a chance to get on her in the morning, she worked are tied for second with seven victories apiece. Patricia’s Hope LLC andreally well and she ran the same way. We’re very proud to get third place Glockenburg Stables round out the top five with six wins each.and looking forward to getting the money next time.” JOAN KAREL: $924.60 • RALPH FOX: $4,619.12 Sent off the 2-1 favorite, Silver Lode paid $6.80, $3.40 and $2.80. GEOFF HERMES: $283.59 • DAVID SIMPSON: $187.27Partay returned $4 and $3. Lakota Rose paid $14.20. GARY SINDELAR: $437.46 • PHILIP C. BLUM: $667.37 RICHARD W. PLETAN: $1,528.35 • Tracy Carr: $190.44The Jim Edgar FuturityRichie the Bull Mary P. Ozanic & Randy Bond: $86.94B. c. ‘13, by Benny the Bull – Richiesgirlgotgame, by Five Star Day Paula Olson: $1,615.23 • Cleveland Richardson: $34.50Breeder: Richard Ravin and Larry Rivelli (Ill.)Owner: V- Leaf Stable LLC and Richard Ravin Estate of John Robertson: $539.03Trainer: Larry Rivelli Estate of Harry Newman: $605.49Jockey: E. T. Baird Tomas Garza: $671.21 • Sandy Bank: $96.60 It was déjà vu all over again for owners V-Leaf Stable and Richie —— —— —— —— —— —— —— —— —— —— ——Ravin; and trainer Larry Rivelli as that team captured the $65,675 Jim 6’6” ——————————————————————————————— 6’6”Edgar Illinois Futurity for the second straight year. This year’s victor, —— —— —— —— —— —— —— —— —— —— ——Richie the Bull, coasted to a 9-1/4-length tally over Navy Seebee. E. T. —— —— —— —— —— —— —— —— —— —— ——Baird rode the Rivelli trainee who covered the mile and a sixteenth in —— —— —— —— —— —— —— —— —— —— ——1:45.68. —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— The son of Benny the Bull is now three-four four with the only loss 6’ ——————————————————————————————— 6’coming in the $100,000 Juvenile Dirt Sprint at Keeneland on the —— —— —— —— —— —— —— —— —— —— ——Breeders’ Cup undercard on Oct. 31. The $39,405 winner’s share boost- —— —— —— —— —— —— —— —— —— —— ——ed his bankroll to $95,665. —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— 5’6” ——————————————————————————————— 5’6” —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— 5’ ——————————————————————————————— 5’ —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— —— WANTED! The I.T.B.O.F. is seeking contact with the above named persons in order to pay them Breeders' Awards. If you can supply a current name, address, and/or telephone number on any of these persons, you could be of service to a fellow horseman. ILLINOIS RACING NEWS / JANUARY 2016 / 5

Commissioner Wins Hawthorne Gold Cup by Neil Milbert The Arlington Million is the most prestigious grass race in Illi- close early. I wanted to make sure I had a forward position and Inois and the tradition-filled Hawthorne Gold Cup is the state’s pre- had him in the clear so when I asked him to go there wouldn’t bemier main course race for older horses. any problems.” In 2015, jockey Florent Geroux made an Illinois racing twin- The heavy favorite in the wagering at odds of 4-5, Commis-killing by making The Pizza Man the first Illinois-bred winner in sioner left his backers smiling when he said goodbye, kicking backthe Arlington Million’s 33-year history and then taking the 79th payoffs of $3.60, $2.60 and $2.10.running of the Grade II $250,000 Hawthorne Gold Cup in the finalstart of Commissioner’s career. Closing to finish second was Neck’n Neck, who was coming off a third place performance in the 1-3/4-mile Grade II Marathon This was the second straight year that Geroux went to the win- at Keeneland, while Majestic Harbor, who was second in thener’s circle after the Gold Cup, and like the 2014 winner, Red Marathon, came in third.Rifle, the 2015 winner was trained by Todd Pletcher. “I had a great trip,” said Neck’n Neck’s rider, Chris Landeros. “It’s always great coming back to Chicago,” said the 29-year- “He gave me a good run. He did everything I asked.old Frenchman who won his first jockey title in the U.S. atHawthorne in 2011 after moving to the America four years earlier. “Commissioner is just a very nice horse with tons of class.”“This is where I started winning races. Majestic Harbor’s jockey, Francisco Torres, likewise had no ex- cuses. “When Mr. Pletcher sends horses here it’s not for nothing. He “We set the pace and when they came to him he quickened,”wants to win.” Torres said. “But they (Commissioner and Neck’n Neck) were two good horses. We just got outrun.” Pletcher led North American trainers in purse money won again Commissioner ended his three-year racing career with five vic-in 2015, the ninth time in 11 years he has accomplished that feat, tories in 15 lifetime starts and earnings of $962,237.while The Pizza Man’s owners, Rich and Karen Papiese, led North He now is back home at WinStar Farm, embarking on his newAmerican owners in races won for the sixth straight year. career at stud with a breeding fee of $7,500. The Arlington Million was one of four triumphs for Geroux in Another helpingGrade I million dollar races last year. His other conquests came on The Pizza Man, the pride and joy of Illinois racing, went to Cal-I’m A Chatterbox in the Cotillion Stakes at Parx Racing and in theBreeders’ Cup at Keeneland with Catch A Glimpse in the Juvenile ifornia after finishing fifth in the $3 million Breeders’ Cup Turf atFillies Turf and Mongolian Saturday in the Turf Sprint. Keeneland and scored a two-length victory over Big John B in Del Mar’s Grade II $252,250 Hollywood Turf Club Stakes. Prior to his back-to-back triumphs in the Gold Cup, the French-man won another of the state’s top races at Hawthorne on a horse With Mike Smith calling the shots from the saddle for the firsttrained by Pletcher, the 2011 Illinois Derby with Joe Vann. The Illi- time, the Illinois-bred standout carrying the green and black colorsnois Derby is the only race in Illinois for members of the Triple of Midwest Thoroughbreds rallied from 11th place in the 1-1/2-Crown crop. In the aftermath of Churchill Downs’ controversial mile grass race, passing four horses in the final eighth-mile to winand much-criticized decision to exclude it from the list of qualify- in 2:31.75 on firm turf.ing races for the Kentucky Derby it has assumed a new role as aprep for the Preakness. The original game plan of Midwest Thoroughbreds owner- breeder Richard Papiese and his wife, Karen, was to send The While Geroux was well-acquainted with Hawthorne he got his Pizza Man across the Pacific for the Japan Cup after the Breeders’introduction to both Red Rifle and Commissioner in the paddock Cup but a minor lung infection prompted them to alter the geld-before the Gold Cup. ing’s itinerary. The 1-1/4-mile race was a fitting farewell party for Commis- Now, The Pizza Man and trainer Roger Brueggemann willsioner, a WinStar Farm homebred who is a son of 1992 Horse of spend the winter in California for the first time and he is expectedthe Year A.P. Indy and maternal grandson of 1997 Belmont winner to begin his campaign as a seven-year-old in the lucrative and pres-Touch Gold. tigious races at Santa Anita. It was the seventh start of a four-year-old campaign during The most memorable of The Pizza Man’s 2015 triumphs camewhich he had hitherto won a pair of Grade III races, the Skip Away in the Arlington Million in which he became the first Illinois-bredat Gulfstream and the Pimlico Special. As a three-year-old, he was winner in the 33-year history of the state’s premier race.winless in 10 starts but led for most of the way in the Belmont be-fore losing by a head to Tonalist in the 1-1/2-mile third jewel of the Vase runneth overTriple Crown. Highland Reel, the Irish invader who won the Grade I $450,000 “We bred him to win a classic and we almost pulled it off,” Secretariat for three-year-olds on Million day at Arlington, scoredWinStar’s president and chief executive officer, Elliot Walden, told another victory against world class opponents when he journeyedThe Blood-Horse. to China to capture the Hong Kong Vase for trainer Aidan O’Brien and jockey Ryan Moore. In the eight-horse Gold Cup, Geroux utilized Commissioner’sspeed by rating him third in the early going behind pacesetter Ma- Relegated to second place in the Hong Kong Vase was an olderjestic Harbor and stalker Valiant City. Majestic Harbor went the horse, defending champion Flintshire, who trailed Highland Reelquarter in :23.50, the half in :47.34 and three quarters in 1:11.21. by 1 1/2 lengths. With a half-mile to run. Geroux asked Commissioner to con- The Hong Kong Vase is one of four races at Sha Tin that luretend for the lead. He took command, gained a 1-length lead at the outstanding horses from around the world.stretch call and went on to win by 2 1/2 lengths in 2:02.09 on a sur-face labeled “good.” “He’s a very big horse, a heavy horse, and it takes him a whileto get going,” Geroux said. “That’s why I tried to keep him fairly6 / ILLINOIS RACING NEWS / JANUARY 2016

™ Broodmare Managementwww.indianhillstbfarm.com Foaling Layups 618-792-3398 Retirees At Stud: Wild Gambler & AmeriheartIllinois Horse Fair, 2016 by David Nobbe The 2016 Edition of the Illinois Horse Fair will be held Friday, criteria can be found on the HF website. The horses used willMarch 4 through Sunday, March 6 at the Illinois State Fair- come from the Race program at Fairmount Park. HF is extremelygrounds in Springfield, Illinois. The Horse Fair (HF) is Illinois’ pleased that ADM is once again sponsoring the Heartland Horse-largest all-breed horse event going back to 1987. “The Equestrian man’s challenge.Lifestyle Ride Your Dream” is this year’s theme. The shopping opportunities, clinics, breed/sport demos, and If your dream includes a purchase of any kind, HF is a one- HHC are only a part of the HF. The other very significant aspectstop opportunity to compare and buy anything a horse owner of HF is the educational program, which this year will not onlymight need or want. There will be vendors supplying farm equip- provide seminars and speakers, but also live demonstrations. Top-ment, feed, supplements, tack, clothing, and just about anything ics covered in the seminars include:else you can think of for horses. HF will make it possible to com- • Barn Fire Safetypare several different feed companies products all within a short • What It Takes to Be an Equine Technical Rescue Responderwalk of each other. You will be able to talk to each company’s • Food Ingredients That Can Be Beneficial and also Deadly Mis-representative in person, not on the phone, and see actual samples takes in Formulating Horse Feedsof the product. • Biosecurity at Your Barn and on the Road • On the Frontline of an Equine Disaster – What We learned From In addition to shopping, HF will present a number of clinics Katrinawhere people can get hands-on instruction from top-rated profes- • Riding Style Assessment and How It Can Influence Your Train-sionals in their respective fields. This year’s clinics include train- ing and Teachinging the performance horse with Sarah and Chris Dawson, barrel • Saddle Design and Fitracing with Curt and Polly Hagey, hunters, jumpers, and eventing • Equine Bitswith Brody Robertson, and new careers for thoroughbreds after • Plans and Challengers for Horses in our State Parksthe track with Tim Boyer. A compete list of the clinics and clini- • Tips for Those Considering the Veterinary Professioncian can be found on the Illinois Horse Fair website. • Natural Hoof Care and Maintenance, and • The Equine Eye HF gives participants an opportunity to showcase their breed’sabilities and uses through the breed/sport demos. Blocks of time Live demonstrations scheduled include:are allotted throughout the day for demonstrations to show off • Chiropractic Adjustments for Horsesone’s breed or discipline. It provides a great opportunity for any- • Equine Dentistry Live (inside the horse’s mouth)one who wants more information about a particular breed or ac- • Ultrasound Exam of Limbstivity to get first hand knowledge within the confines of the • Natural Hoof Trimmingfairgrounds. • Physical Therapy Modalities and How They Are Applied, and • Yoga Classes for the Rider Because last year’s Heartland Horseman’s Challenge featuringoff track thoroughbreds was such a great success, the same for- Please attend the Illinois Horse Fair. It is a great way to spendmat will be used again this year. All of the horses used in the an afternoon, a day, or weekend totally immersed in the world ofevent and an additional three horses were adopted last year. Four horses. Proceeds from the HF go to fund the Horseman’s Counciltrainers will each select a horse to train during the three days of of Illinois, a non-profit organization that serves as the voice ofthe HF. A brief summary of what the trainers will be judged on the horse industry in our state.includes their ability to get forward motion, walk, trot, and canterin both directions, canter on the correct lead, change leads, stop,back up, and load in a trailer. A complete listing of the judging ILLINOIS RACING NEWS / JANUARY 2016 / 7

ILLINOIS THOROUGHBREDB O FGetInTheGate! REEDERS AND WNERS OUNDATION A General Not For Profit Corporation • Established 1947Cwhwewcewkb.soitiubtetoofa.utnret CHICAGO OFFICES P.O. Box 7 • Lyons, IL 60534 P.O. Box 578, Arlington Heights, IL 60006 Phone: Arlington - 847/253-3670 FAX: 630/232-1619 www.ITBOF.net OFFICERS BOARD OF DIRECTORS Dan Sullivan - President Dan Arrigo Steven Lewis David Nobbe - 1st Vice President David P. Block David NobbeJanet Hartwig - 2nd Vice President Joe Carper Gail Radke Mike Fitch John Smith Dan Arrigo - Treasurer John Haran Daniel C. Sullivan Gail Radke - Secretary Janet Hartwig Tom Swearingen Richard J. Johnson Melissa Williams Frank J. Kirby I.T.B.O.F. MEMBERSHIP APPLICATIONMail to: ITBOF, P.O. Box 7 Name _____________________________________________________________ Lyons, IL 60534 Address ___________________________________________________________ City _______________________________________________________________ ❏ Individual $100 State/Zip __________________________________________________________ ❏ Family $150 ❏ Farm $3008 / ILLINOIS RACING NEWS / JANUARY 2016

A Smorgasbord of Food for Thoughtby Neil Milbert A significant fall in the in-state money bet on programs at Hawthorne governance,” Byrne said, alluding to the five new board members ap-Race Course and Arlington International Racecourse may be an unin- pointed in 2015 by new Republican Governor Bruce Rauner. “I can’t betended by-product of the Illinois Racing Board’s decision to deny bank- effective and, if anything, I might be a hindrance.”rupt sister tracks Balmoral Park and Maywood Park 2016 harness dates,a move that appears likely to put them out of business permanently. According to Daily Racing Form’s Marcus Hersh, “The amended of- ficial language under consideration would have required racetracks to Early this year there aren’t expected to be any pari-mutuel repercus- monitor horses leaving their grounds to attempt to ensure that they weresions. not on the way, directly or indirectly, to slaughterhouses. Trainers or owners would be required to sign forms attesting to a departing horse’s At its December meeting the Racing Board approved Balmoral and destination.”Maywood’s requests to continue inter-track wagering in 2016. The boardalso licensed the nine off-track betting parlors under Maywood’s auspices Both the Illinois Thoroughbred Horsemen’s Association and the Illi-and the three under the auspices of Balmoral. nois Harness Horsemen’s Association supported Byrne’s proposed rule and, according to ITHA Executive Director Glen Berman, Arlington But later in the year there might be serious repercussions based on General Manager Tony Petrillo had helped to draft its language duringwhat Balmoral/Maywood Chief Financial Officer Randy Olech told their negotiations.Daily Racing Form. However, Petrillo was absent from the Racing Board meeting, and “Statutorily we can keep them open for a year—the question (of how when Arlington Chairman Dick Duchossois was called on to testify helong they stay open) becomes one of financial ability (to fund opera- spoke against it, saying he was concerned about the racetracks’ legal lia-tions),” Olech said. bility. In other words, there is a clear and present danger that sometime this Duchossois Group sells CDI stockyear simulcast wagering will disappear at Balmoral, Maywood and thenine OTB parlors. Churchill Downs, Inc. has entered into an agreement to buy back 944,765 shares of stock worth $138.1 million from The Duchossois The ripple effect would be plummeting purses at Arlington and Group, the private company headed by Dick Duchossois.Hawthorne. The sale of the 944,765 shares will leave The Duchossois Group with As of mid-December there remained a slim chance that the tracks and 2,000,000 shares. It became the largest single shareholder in CDI whentheir OTB satellites would be sold at auction. Dick Duchossois merged Arlington with the Kentucky racing and gam- ing conglomerate in 2000. The Duchossois Group remains the largest They were driven into Chapter 11 bankruptcy late in 2014 when the shareholder.U.S. 7th Circuit Court of Appeals awarded four of the state’s five mostprofitable riverboat casinos—Grand Victoria in Elgin, Hollywood in Au- What’s going on here?rora, Empress in Joliet and Harrah’s in Joliet—a $77.8 million judgment. In recent months the editorial comment page of the Blood-Horse The judgment is based on allegations that in return for a $100,000 bearing the above headline contained two items of great concern to thosecampaign contribution from Balmoral President/Maywood Vice-Presi- who make their living by racing and breeding thoroughbreds.dent John Johnston now-imprisoned Governor Rod Blagojevich signedthe impact fee subsidy extension bill that had passed the House and Sen- The first editorial by Online Content Editor Tom LaMarra pointedate. out that nationally casino operators and lawmakers have been backing away from the original intent of laws that linked approval for racetrack The impact fee was first assessed to the four casinos from 2006-2008 gaming to live pari-mutuel racing.because the two Chicago area harness tracks and the thoroughbredtracks, Arlington and Hawthorne, didn’t receive the subsidy from the “Some of the legislation has titles that expressly mention preservationtransfer of a dormant riverboat casino license to north suburban Chicago of horse racing and breeding,” LaMarra wrote.that was an integral part of 1999 gaming legislation. “Tens of millions of dollars have been taken away and redirected in There were two major components to the legislation: 1, doing away Pennsylvania and West Virginia.”with a cruising requirement and immediately allowing existing casinos toconduct dockside gaming, increasing profits by multi-millions; 2, giving LaMarra went on to describe the situation in Florida where FloridaChicago circuit racetracks and horsemen a new revenue source to offset HBPA President Kent Stirling said “a coalition of racetracks” is trying tothe impact that dockside gaming would have on them. decouple slot machine revenue from pari-mutuel revenue. The cliché “he got tossed under the bus” applies to Johnston and his The gist of LaMarra’s editorial was that “separating gaming from livetracks. racing in Florida could ruin the state’s vibrant horse industry.” Even though Johnston never made the contribution, his tracks were The second editorial was written by Eric Mitchell, the Blood-Horse’shammered with the $77.8 million judgment and he was hit with a $4 mil- editorial director and editor-in-chief, and bore the subhead “Illinois onlion judgment. the Brink.” Along with Balmoral and Maywood, Hawthorne and Arlington were “‘At a crossroads’ can no longer be used to describe the health of rac-beneficiaries when Blagojevich signed the extension bill. ing in Illinois,” Mitchell wrote. “The industry there is teetering on the brink of collapse and whatever action is taken (or not in 2016)…is likely But just before last September’s hearings for 2016 racing dates to determine if it falls off the economic cliff.Hawthorne and Arlington formed an alliance and succeeded in persuad-ing the Racing Board to put Balmoral and Maywood out of business. “The state of Illinois’ Thoroughbred industry mirrors the Doomsday Clock, the graphic clock face created in 1947 by the still-published Bul-Kathy Byrne resigns letin for the Atomic Scientists—tracking how close humanity is to nu- clear apocalypse, which is when the ‘clock’ strikes 12. Right now the One of the Racing Board’s most dedicated and hardest-working mem- minute hand on the Doomsday Clock is three minutes before midnight,bers, Kathy Byrne, resigned in November after her motion to create new which, again, seems in line with the plight Illinois horsemen face.rules to prevent Illinois racehorses from being sold for slaughter wasvoted down and tabled. “If 2016 slips away without any progress toward allowing racetracks to offer casino gaming, then irreparable harm to an industry that pro- The daughter of deceased former Chicago Mayor Jane Byrne was ap- duces more than 30,000 jobs statewide is not far behind.”pointed to the 11-member board in 2011 by former Governor Pat Quinn,the Democrat who succeeded Blagojevich. “There is no way that I can successfully advocate for this industryand the rights of the various parties in the industry with this current ILLINOIS RACING NEWS / JANUARY 2016 / 9

Point of View by Ray Hallett One can’t help but wonder if the closure of both Balmoral and Maywood individuals who will certainly lose their jobs. The trickledown of the impactParks represents a new era for the racing industry in Illinois. Symbolically a only starts there. The racing industry has always claimed that 30,000 individ-Berlin Wall has fallen and a cold war has come to an end. Will the changes uals in the state are at least partially dependent on racing for a livelihood.bring about a new era of peace and cooperation? Perhaps yes. Perhaps no. In Fewer race dates and fewer horses mean that infrastructure will be weakened.the meantime, the landscape has certainly changed for 2016. On the positive side the elimination of the Johnston family from Illinois By the time this month’s issue of the Illinois Racing News goes to press, racing puts an end to a contentious feud that has festered for decades andthere is a good chance that both Balmoral and Maywood Parks will have been fractured an industry that is badly in need of unity. The split goes back to atsold. Those of us on the thoroughbred side of the racing industry sometimes least 1946, when Maywood became the first track in Illinois to offer pari-neglect to keep track of what is happening with our standardbred brothers, so mutuel wagering on harness racing, thus invading what had heretofore been aallow me to present a cliff note summary of what has happened on that side thoroughbred only arena. The jealousy of the track owners and the rivalry be-of the business in the last year. tween the two sides of the racing industry have divided Illinois racing for years. Under the direction of a bankruptcy court, both Balmoral and Maywoodhave been ordered to sell all assets, in order to settle a judgment against those At one time Arlington Park was heavily invested in both sides of the rac-tracks. On Monday December 14 sealed bids were opened that represented ing industry. Through its sister track, Washington Park, located in south sub-offers to purchase both tracks. There were three bids but only one met the urban Homewood, Arlington conducted the most successful standardbredqualifying criteria and that bid was only for Balmoral. As a result the bank- meeting in Illinois. Unfortunately, Washington Park was destroyed by fire onruptcy court allowed the sellers to extend the bidding process for two weeks Feb. 5, 1977 while attempting to run a winter thoroughbred meeting. At thatuntil December 28. Make no mistake. The tracks are going to be sold and the time Arlington was owned by Madison Square Garden.Johnston family is going to be gone from Illinois racing. With its sister track in ashes, Arlington was forced to seek a lease on one The sale of the tracks is a result of a 2014 judgment in Federal Court that of the other existing harness tracks, but the attempt was met with consider-obligated the tracks owners to pay four Chicago area casinos approximately able resistance, as the other tracks attempted to squeeze Arlington out of the$80 million. The judgment against the track owners was the result of an at- standardbred business. In desperation Arlington even attempted to conducttempt to bribe Gov. Blogojevich with a $100,000 campaign contribution. In harness racing at its Arlington Heights track for two years. The experimentreturn the governor was to have signed into law a bill that would have re- turned out to be a failure.newed a three percent tax on the four casinos. That money would then beplaced in escrow and then used to supplement purses at state tracks. By 1983 Madison Square Garden had had enough and decided to aban- don Illinois racing and the track was sold to Richard Duchossois and part- According to the lawsuit, the Blogojevich campaign committee had al- ners. The feud continued even after the sale of the track. It came to a head inready collected $125,000 from Balmoral-related sources and was to have re- 1985 when the Arlington grandstand burned and Arlington was forced to signceived the extra $100,000 before the governor signed the bill. The deal was a lease with Hawthorne to complete its 1985 dates. The lease was not re-arranged between Balmoral leader John Johnston and a close aid to the gov- newed in 1986 and the north side track ran an abbreviated 13-day meeting aternor, with full knowledge by Blogojevich. Arlington. 1987 saw a regular length meeting run before tents and temporary grandstands. Before that deal was consummated, the governor was caught up in a Fed-eral investigation into governmental corruption in Illinois and the payment The new Arlington grandstand was scheduled to be built during 1988 sowas never made. Subsequently the governor signed the bill after his indict- live racing at the track was out of the question. However, Duchossois hadment but before leaving office. He is now serving a 14-year prison sentence. other plans. Balmoral Park was owned by the family of Edward DeBartollo and Duchossois offered to buy the track, with the intent of moving Arling- As a result of the information revealed by the Federal investigation, the ton’s 1988 meeting to Balmoral and then turning the track into a training cen-four Chicago area casinos that were the subject of the three percent tax joined ter starting in 1989.forces and sued for the return of the money that had been previously withheldto benefit the racing industry. Duchossois thought he had what he describes as a “handshake deal” to buy the track, but at the last minute Billy Johnston, after bringing new partner The jury trial in Federal court determined that, because of illegally ob- George Steinbrenner’s money to the table, yanked the rug out from undertained influence, the four casinos in question had been deprived of over $63- Duchossois and thus kindled a fight that ripped Illinois racing to shreds, amillion in revenues to the benefit of the horse racing industry, and ordered clash that is only now beginning to cool with the Johnston family on the waythat the money be returned to the casinos. With interest and penalties in- out the door.cluded, the judgment was for somewhere between $78 and $81-million. Arlington was only rebuilt after Duchossois had wrangled concessions No other racetracks were involved in the lawsuit and thus the whole re- from the state in the form of a law that would allow the creation of OTBs. Forsponsibility for repayment fell on the shoulders of Maywood and Balmoral the rest of the eighties and early nineties Arlington was pitted against a coali-Parks, which were controlled by the Johnston family. The Johnston family’s tion made up of Balmoral, Hawthorne, Maywood and Sportsmans’ for OTBcontrolling share of the tracks is approximately 60 percent. locations, with both Arlington and the alliance staking claims to sites in northwestern Illinois. Some disputes even wound up in court. Unable to meet the demands of the court, Balmoral-Maywood filed forChapter 11 bankruptcy on December 24, 2014. Though the tracks were open In the meantime Johnston was pushing the IRB to grant thoroughbredfor business in 2015, the tracks have been on the sales block since then. dates to Balmoral that were directly opposed to Arlington’s. In retaliation Duchossois tried to force his foot back into the harness scene by purchasing Because of the legal problems, the Illinois Racing Board declined to Quad City Downs, a harness track, in East Moline in 1988. With pressure onaward any racing dates to the tracks for 2016. In 2015 Balmoral and May- the IRB from Arlington, Balmoral ran its last thoroughbred meeting in 1990.wood combined to race 192 days. The IRB partially offset the loss of thoseracing days by assigning Hawthorne 128 days, which is 64 days short of last The wounds from that period have never healed and the racing industryyear’s standard. That grant will impact the thoroughbred industry because has been at cross-purposes for decades. As we open a new year, the JohnstonsHawthorne will lose 18 days of thoroughbred racing. Arlington was given will be gone and the influence of Duchossois on the north side has begun tothree fewer days for next year, bringing the total of days lost in the Chicago wane. Has the time finally come for all parties to bury the hatchet and drawmarket to 21. together for their mutual benefit and the future of racing in this state? There are indications that may be the case. I certainly hope so. If they can’t find a However, Balmoral and Maywood are not entirely out of business. The way to do that, we may not have much of a future left.IRB has agreed to grant licenses to the tracks to operate their OTB’s and theirintertrack facilities in 2016. Balmoral has OTBs in Crestwood, Champaignand Normal. Maywood maintains OTBs in North Aurora, Lockport, Niles,Oak Brook Terrace, Hoffman Estates and Elk Grove Village. The elimination of Balmoral/Maywood will certainly have a negative im-pact on the racing industry in Illinois. The tracks directly employed about 24010 / ILLINOIS RACING NEWS / JANUARY 2016

Jurisdiction of the U.S. Tax Courtby John Alan Cohan, Attorney at Law For most people their encounter with the IRS ends at the audit horse owners involve those who have a history of losses with largephase: Taxpayers will often agree to pay whatever the IRS says tax deductions taken against large principal sources of income.they owe. In situations where the auditor claims your activity is ahobby, not a business, this can have long-lasting and adverse con- Although the horse and ranching industries are big forces insequences because deductions against outside income would be the American economy because they help fund many related in-disallowed. dustries and workers, the IRS takes a skeptical view towards tax- payers who have a history of losses in these areas. But at the same If you choose, you can appeal an audit determination to IRS time, taxpayers who go to the effort of pursuing their cases in IRSAppeals and, if that is not successful, to Tax Court. The IRS is a Appeals or Tax Court usually can get a better opportunity to havelarge bureaucracy, but the procedures are fairly clear in that tax- a satisfactory result. It will still be necessary to have strong evi-payers are given ample opportunity, if you follow the procedures, dence that your activity is conducted in a businesslike manner,to contest determinations made at the audit level. and plenty of documentation and witnesses, in order to determine just how you could make a profit in this activity over time. The “philosophy” in IRS appeals, for the most part, is to seeka fair settlement of cases. Often, if you have strong evidence on John Alan Cohan is an attorney representing people in federalyour behalf, the appeals officer will end up conceding the case in and state tax disputes, IRS appeals, and Tax Court litigation, andits entirety, and you walk away owing nothing. In other instances, is a long-standing author of a legal advice column published ina settlement might be based on a percentage that you agree to pay. numerous sporting magazines. In addition, he advises organiza-If a large amount of money is at stake, the appeals proceeding tions on compliance with newly enacted laws and regulations.usually requires representation by a tax attorney. John is also author of the book, Turn Your Hobby Into A Business – The Right Way. He can be reached at: (310) 278-0203, or email The U.S. Tax Court is a Federal court established by Congress at [email protected]. His website is JohnAlanCohan.com.to provide a forum in which taxpayers can dispute IRS tax defi-ciencies assessed against them. This is a court, as it were, of last Business Plans. IRS Appeals.resort for taxpayers, if the matter has not been settled in IRS Ap- Tax Planning for Horse Owners.peals. Over 25 Years’ Experience In order to file a petition in Tax Court, you must await receiptfrom the IRS of a “90-day letter,” also known as a deficiency no- JOHN ALAN COHANtice. This triggers a 90-day period in which you must file a peti- ATTORNEYtion or else the IRS assessment will become final and AT LAWunappealable. Free Consultation The Tax Court is composed of presidentially appointed judgeswho are well versed in tax law. Although the Court is physically [email protected] in Washington, D.C., court sessions are held throughout www.JohnAlanCohan.comthe country, so that the lawyer who files your case can designate acity convenient to you. The advantage of Tax Court is that you have the opportunity,once again, to settle your case. Your representative must be famil-iar with the extensive Tax Court rules and procedures. If the caseis not settled with IRS counsel, the judge will hear your case. Nojuries are involved. Depending on the judge, and depending onthe strengths of your case, you may or may not win. You will have the opportunity to present witnesses on your be-half, including expert witnesses. The taxpayer usually will be akey witness to testify as to your intentions and expectations incarrying on the activity. You will need to explain your method ofrecordkeeping, articulate what the business plan was, what effortswere made to cut down on costs and increase revenue, who wasemployed as trainers, how decisions were made on acquisition ofhorses, breeding, racing, showing and selling. If there were set-backs, such as casualty losses or economic downturns, these alsowill need to be narrated. Some Tax Court judges are more sympathetic than others onthe trials and difficulties horse owners face – whether in racing orbreeding – to make a profit. Not everyone is audited in the first place. But most of audits of ILLINOIS RACING NEWS / JANUARY 2016 / 11

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