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FIFTH DIVISION
August 18, 2000

No. 1-00-0578

After a hearing to determine the allotment of racing dates forthe year 2000, the Illinois Racing Board (the Board) refused toaward harness racing dates to plaintiff Suburban Downs, Inc.,instead awarding all harness racing dates to defendants BalmoralRacing Club, Inc. (Balmoral), and Maywood Park TrottingAssociation, Inc. (Maywood). The plaintiff's complaint foradministrative review in the circuit court was heard and denied. On appeal, plaintiff argues that (1) the order entered by the Boardwas contrary to law in that the Board failed to make specificfindings on the factors set forth in the Illinois Horse Racing Actof 1975 (the Racing Act) (230 ILCS 5/1 et seq. (West 1996)); (2)denial of racing dates to plaintiff because of its use of theFontana safety rail was a denial of due process of law and wasarbitrary and capricious; (3) any comparative disadvantageresulting from the Fontana rail was offset by plaintiff's one-miletrack; (4) the record shows that greater revenue to the state andpurses to horsemen would be produced by granting racing dates toplaintiff; and (5) the record showed that the Board's decision wasmotivated by considerations not permissible under the Racing Act. For the following reasons, we affirm the dates order issued by theBoard.

Plaintiff, Suburban Downs, Inc., is an entity that conductshorse race meets and conducted harness racing at Hawthorne RaceCourse in Stickney, Illinois, from at least 1970 through 1997.⁽¹⁾ Defendants Balmoral, Maywood, Arlington, Associates RacingAssociation (Associates), National Jockey Club (National Jockey),Hawthorne Race Course, Inc. (Hawthorne), and Ogden Fairmount(Ogden) are also entities that conduct horse racing meets inIllinois. Balmoral conducts harness racing at Balmoral Park, inCrete, Illinois. Maywood conducts harness racing at Maywood Parkin Maywood, Illinois. Chicago Downs Association (Chicago Downs)and Fox Valley Trotting Association (Fox Valley) have, in pastyears, conducted harness racing at Sportsman's Park in Cicero,Illinois, which adjoins Hawthorne Race Course.

Pursuant to the Racing Act, the Board is the agency chargedwith administering the Racing Act. 230 ILCS 5/2 (West 1996). TheRacing Act provides that any person desiring to conduct a horserace meeting may apply to the Board for an organization license. 230 ILCS 5/20(a) (West 1996). In granting organization licensesand allotting dates for horse race meetings, the Board hasdiscretion to determine an overall horse racing schedule that will,in its judgment, be conducive to the best interests of the publicand the sport of horse racing. 230 ILCS 5/20(e-5) (West 1996).

In reaching its determination, the Board is to consider thefollowing factors under Section 20(e-5) of the Racing Act:

(1) the character, reputation, experience, and financial integrityof the applicant and of any other separate person that either:

(i) controls the applicant, directly or indirectly, or

(ii) is controlled, directly or indirectly, by that applicantor by a person who controls, directly or indirectly, thatapplicant;

(2) the applicant's facilities or proposed facilities forconducting horse racing;

(3) the total revenue without regard to Section 32.1 to be derivedby the State and horsemen from the applicant's conducting arace meeting;

(4) the applicant's good faith affirmative action plan to recruit,train, and upgrade minorities in all employmentclassifications;

(5) the applicant's financial ability to purchase and maintainadequate liability and casualty insurance;

(6) the applicant's proposed and prior year's promotional andmarketing activities and expenditures of the applicantassociated with those activities;

(7) an agreement, if any, among organization licensees as providedin subsection (b) of Section 21 of this Act; and

(8) the extent to which the applicant exceeds or meets otherstandards for the issuance of an organization license that theBoard shall adopt by rule. 230 ILCS 5/20(e-5) (West Supp.2000).

Through August 1 of each year, the Board accepts applicationssubmitted by organizations seeking an award of racing dates for thenext calendar year.⁽²⁾ 230 ILCS 5/20(e) (West 1996). The Boardconsiders the applications and announces the award of the racingdates at its annual dates hearing in September. Thoseannouncements are not considered final until the Board executes aformal order. 230 ILCS 5/20(e) (West 1996).

The following facts were taken from the record before theBoard at the dates hearing and from the Board's dates order for theyear 2000.

Plaintiff has never been awarded harness dates other than inwinter, with the exception of a 10-day harness meet in May of 1992. For calendar years 1998 and 1999, plaintiff was not awarded anyharness dates based on an agreement between all racetrackapplicants. Instead, as a result of Arlington's absence, Hawthornerequested and was granted more thoroughbred dates at Hawthorne RaceCourse. Thoroughbred racing dates generate higher handle thanharness dates and, as a result, Hawthorne's handle increaseddramatically in 1998 and 1999 in comparison with prior years.

Additionally, the landscape of horse racing has changedmarkedly in recent years. On May 30, 1995, the Racing Act wasamended to permit Illinois licensees to accept pari-mutuel wageringon unlimited full-card simulcasts of race programs conducted out ofstate. This amendment resulted in a substantial reduction of totalwagering at Illinois locations on Illinois live racing, which wasreplaced by Illinois wagering on out-of-state races. For example,from 1994 to 1999, the percentage of total handle (the amount ofmoney wagered on horse racing) wagered on Illinois live racingdecreased from 95% to 33%. In this manner, full-card simulcastingsubstantially leveled the playing field among the track operators. In addition, since the authorization of off-track wagering inIllinois, the percentage of total handle wagered at Illinois racetracks decreased from 34% to 18%. The remaining percentage ofhandle is now wagered at intertrack and off-track locations.

On June 25, 1999, the Racing Act was amended again toeliminate host track status for matinee harness racing meets. 230ILCS 5/3.075(e) (West Supp. 1999). Prior to 1998, the Boardawarded matinee harness racing dates and host track privileges toplaintiff in January and February. On those dates, plaintiffbenefitted from host track privileges and handle generated from thefull-card simulcasting on out-of-state races, which includedthoroughbred races. With the absence of live Illinois thoroughbredracing during this period, plaintiff generated higher average dailyhandle numbers as compared to harness meets during nonexclusiveportions of the racing schedule. Comparing plaintiff's handle withmore recent figures, in January and February of 1998 and 1999,National Jockey's matinee average daily handle at Sportsman's Parkexceeded plaintiff's January and February 1997 average handle, eventhough National Jockey did not have the benefit of live racing.

In July 1999, plaintiff submitted its application to theBoard. In its application, plaintiff sought harness racing datesat Hawthorne Race Course for the period of May 7 through September2, 2000. Balmoral also applied for harness racing dates for fourdays per week throughout the year 2000, with races to be conductedat Balmoral Park. Maywood and Associates both applied for harnessracing dates for three days per week throughout the year 2000, withraces to be conducted at Maywood Park. Chicago Downs and FoxValley did not apply for racing dates.

In addition to their applications, and as they did in theyears 1995 through 1999, each applicant submitted a written waiverof the contested cases provisions of the Illinois AdministrativeProcedures Act (5 ILCS 100/1-1 et seq. (West 1994)) (hereinafterthe Act), and elected to present evidence to the Board at aninformal dates hearing conducted on September 21, 1999. Specifically, each applicant, including plaintiff, signed a waiverthat provided as follows:

"The undersigned, on behalf of [applicant's name], being fullyadvised, and in the interest of a speedy, practical andequitable resolution by the Illinois Racing Board of theissues involved in the award of racing dates for the calendaryear 2000, does hereby waive any and all rights to a hearingin accordance with the 'contested cases' provisions of theAdministrative Procedures Act, (ILCS Ch. 5, Sec. 10-25 through10-70), prior to the award of 2000 racing dates to applicantstherefor."

At the dates hearing, the Board determined that each applicanthad an extensive history of conducting race meets in Illinois overa period of many years. The Board also determined that all of theapplicants possessed the character, honesty, and financialintegrity to operate the race meets requested, and to purchase thenecessary casualty and liability insurance. The Board found thateach applicant had attempted to recruit, train, and promoteminority employees. The Board stated that the applicants had notpresented any agreements between them with respect to racing dates.

Concerning the applicants' facilities for harness racing, theBoard focused on the types of rails used at the different tracks. Balmoral Park and Maywood Park are exclusively harness tracks andutilize the "hubless hub rail." The hubless hub rail is a seriesof pylon cones outlining the track perimeter. The hubless hub railallows the harness horseman to pull to the inner perimeter of thetrack to avoid an accident. On the other hand, there are boththoroughbred and harness meets held at Hawthorne Race Course and itutilizes the "Fontana rail." The Fontana rail is a solid,continuous hub rail. The Fontana rail prevents horses fromentering the inner perimeter of the track; thus, harness horsemencannot avoid accidents in that manner.

Plaintiff knew for many years that both the Board and theharness horsemen were concerned with the Fontana rail used atHawthorne Race Course. In the dates orders for 1994 through 1999,the Board noted that Hawthorne Race Course utilized the Fontanarail. The Board also pointed out that Balmoral Park and MaywoodPark utilized the hubless hub rail, which was considered by harnessdrivers to be the most important and effective safety featureavailable.

Prior to the dates hearing for the year 2000, plaintiff wasnotified that its continued use of the Fontana rail raised serioussafety concerns. One week prior to the dates hearing, bothplaintiff and the Board received a letter from the president of theIllinois Harness Horsemen's Association (IHHA)⁽³⁾ which read, inpart:

"Safety is always a paramount concern. Horsemen and theirhorses must have the safest facility possible for racing. IHHA believes the hub rail system in place at Hawthorne [RaceCourse], though a newer generation that is safer than mostothers, is not as safe for harness racing as having no hubrail at all. Racing with no hub rail is recognized by allmajor horse racing authorities as being the safest for harnessracing. Accidents involving sulkies, horses, and a hub rail,while not common, are always a possibility and IHHA cannotsupport this."

IHHA concluded the letter by stating that it would not supportplaintiff's application for harness racing unless a hubless hubrail was installed at Hawthorne Race Course. Rather, IHHA statedit would support Balmoral's and Maywood's applications since thosetracks already used hubless hub rails. This was the first timeIHHA failed to support an application by plaintiff.

IHHA reiterated its safety concerns and its opposition toplaintiff's application through testimony at the dates hearing. The president of IHHA explained as follows:

"The misconception is that [the Fontana rail is] unsafebecause a horse or a race bike could hook it or run into it. That's not the case at all. Having the extra option whenyou're in a race and a horse falls in front of you, to be ableto get inside of a wreck is paramount, it's huge. One of theonly times, thank God, I've ever been hurt in my life was atHawthorne [Race Course] when a horse fell in front of me inmid stretch and I couldn't get to the inside to avoid theaccident. It's not a matter of hooking the hub rail, thoseare very rare."

IHHA's president further testified that the national trend inharness racing was to use the hubless hub rail:

"As you can see, the national trend [is that] all the majorrace tracks that are striving for excellence are getting ridof the hub rail. It's just, it's too much money and too manylives on the line to still have the hub rail."

Plaintiff, however, argued that the hubless hub rail was notthe only safe rail available for harness racing. Plaintiffsubmitted the opinion of an expert, Chuck Coon, stating that theFontana rail was safe for harness racing and that the same rail wasin use at several tracks across the United States and Canada. However, the Board noted that Coon was more of a surface expertthan a rail expert. Plaintiff ultimately acknowledged that theFontana rail may not be ideally suited for harness racing, butstated that the rail was safe for both standardbred andthoroughbred racing. Despite the fact that the president of IHHAstated IHHA would support harness racing by plaintiff if the railwas changed, plaintiff did not offer to replace the Fontana railwith the hubless hub rail.

The total revenue derived by the state and horsemen from theconduct of race meetings was also argued before the Board. At thedates hearing, the president of IHHA testified that since Balmoraland Maywood took over the harness racing dates, harness racing hadexcelled both nationally and within the state. He stated that thesimulcasting handle to other states was almost double the revenuereceived from them, which was even better for harness racing thancompetition between plaintiff, Balmoral, and Maywood. He alsopredicted that purses and handles would remain the same whethersummer dates were awarded to Balmoral Park or Hawthorne RaceCourse, but that revenues from simulcasting would be somewhatlessened if the races were held at Hawthorne Race Course.

Plaintiff argued to the Board that both plaintiff's andSportsman's Park's average daily handles were greater than BalmoralPark's or Maywood Park's handles in prior years, going back as faras 1991. However, neither plaintiff nor Sportsman's Park hadhosted any harness meets since 1997.

In the dates order for the year 2000 racing dates, the Boardset forth the average daily handle and the government revenuegenerated at each 1999 race meet through September 6, 1999. TheBoard also stated the percentage of total handle wagered on-trackand the percentage of total handle wagered on Illinois races forthe period of 1994 through 1999. The Board's order noted that, asa result of an amendment to the Racing Act, the pari-mutuel taxrate was adjusted to a flat tax of 1.5% on all wagers at allIllinois licensed facilities. The Board stated that the amendmentemphasized the total pari-mutuel handle as it related to maximizingstate revenues from horse racing. The Board also noted that mostof the indirect sources of revenue from racing such as admissiontax, sales tax, and income tax tended to have a positivecorrelation with handle and, therefore, increased as handleincreased.

The Board also received evidence regarding each applicant'sproposed promotional budget. Balmoral, Maywood, and plaintiffsubmitted promotional/advertising budgets for the year 2000 of $1.3million, $940,000, and $790,000, respectively.

At the close of the evidence and arguments, Chairman Lambrecommended that the Board repeat the 1999 schedule, which granteddates to Balmoral and Maywood, because that schedule had provenexceptionally strong financially, had raised the quality ofIllinois standardbreds dramatically, and had brought the pursestructure to an all-time high. Commissioner Propes secondedChairman Lamb's recommendation, stating:

"The situation on the harness [racing] side is that Balmoraland Maywood together have achieved pre-eminence in thiscountry, have set records this year in terms of handle andlive racing in terms of the recent history, and we have heardfrom all sides of the harness industry that these strides areimportant, that they're real, that they should be kept going."

After reviewing the applications and the evidence presented atthe meeting, and after officially noticing all records in itspossession, including the applications, the Board's annual reports,past dates orders, and staff reports, the Board issued its orderallotting the year 2000 racing dates. The order granted harnessracing dates to Balmoral, Associates, and Maywood. The Board didnot award plaintiff any harness racing dates for the year 2000.

Plaintiff filed a complaint for administrative review onNovember 12, 1999. On February 10, 2000, the circuit court heardand denied plaintiff's complaint. The circuit court found that theBoard had considered the revenue factor, along with the otherfactors required by section 20(e-5) of the Racing Act, in reachingits decision. The court also determined that, based on thelegislature's clear pronouncement, plaintiff did not have aproperty right in racing dates and that nothing in the recordsupported plaintiff's assertion of a due process violation. Thecourt further found that the Board's decision was not against themanifest weight of the evidence, nor was it arbitrary andcapricious.

Plaintiff now appeals.

The central issue raised by this appeal is whether the Board'sdates hearing and resulting dates order for the year 2000 deniedplaintiff's due process rights. Plaintiff argues that its interestin harness racing dates constitutes a property right of which itcannot be deprived without due process of law. Plaintiff furtherargues that it was deprived of said property right without dueprocess in that the Board's order, which refused plaintiff'srequest for harness racing dates for the year 2000, did not giveexplicit findings on each of the statutory factors listed insection 20(e-5) of the Racing Act.

Administrative proceedings are subject to the requirements ofdue process. Akmakjian v. Department of Professional Regulation,287 Ill. App. 3d 894, 896, 679 N.E.2d 783 (1997). The startingpoint in any due process analysis is a determination of whether aprotectable interest is present, "for if there is not, no processis due." Polyvend, Inc. v. Puckorius, 77 Ill. 2d 287, 294, 395N.E.2d 1376 (1979). The United States Supreme Court held that"[t]o have a property interest in a benefit, a person clearly musthave more than an abstract need or desire for it. He must havemore than a unilateral expectation of it. He must, instead, havea legitimate claim of entitlement to it." Board of Regents ofState Colleges v. Roth, 408 U.S. 564, 577, 33 L. Ed. 2d 548, 561,92 S. Ct. 2701, 2709 (1972). A legitimate claim of entitlement mayarise from statute, regulation, municipal ordinance, or express orimplied contract. Akmakjian, 287 Ill. App. 3d at 896.

Plaintiff failed to identify any statutory authority tosupport the premise that it had a property right in racing dates. Plaintiff asserts that it had a vested property interest in anorganization license and cites to Balmoral Racing Club, Inc. v.Illinois Racing Board, 151 Ill. 2d 367, 405-06, 603 N.E.2d 489(1992), where the supreme court stated:

"We hold today that every racing license creates a propertyinterest, for, surely, denial of any racing license foreclosespursuit of a racing establishment's occupation.

***

Without races, a racetrack becomes useless and theinvestment to maintain that race track is worthless. *** Weconclude that this interest in maintaining an occupation makesBalmoral's interest in retaining a license a property interestwhich cannot be denied without affording due process."

However, subsequent to the decision in Balmoral, the Illinoislegislature amended the Racing Act to state:

"The granting of an organization license to a personconstitutes a privilege to conduct a horse race meeting underthe provisions of this Act, and no person granted anorganization license shall be deemed to have a vestedinterest, property right, or future expectation to receive anorganization license in any subsequent year as a result of thegranting of an organization license." 230 ILCS 5/20(f) (West1996).

Therefore, it is clear that there was no legislative intentionto confer a "claim of entitlement" on applicants for racing dates. Absent such an interest, it cannot be said that the applicants hada recognizable property right within the meaning of the federal orstate constitution. See Polyvend, 77 Ill. 2d at 295. In theabsence of a property right, there can be no due process violation.

Plaintiff argues that property rights, once acquired, cannotbe dissolved by the legislature without due process. We choose notto reach the issue of the constitutionality of section 20(f) of theRacing Act, however, because the constitutionality of the statuteis not essential to the disposition of this case. A court willconsider a constitutional question only where essential to thedisposition of a case, i.e., where the case cannot be determined onother grounds. Bonaguro v. County Officers Electoral Board, 158Ill. 2d 391, 396, 634 N.E.2d 712 (1994). Here, we find thatplaintiff voluntarily waived any existing due process rights.

In Balmoral, 151 Ill. 2d at 397, the supreme court determinedthat the Administrative Procedure Act applied to dates hearingsconducted by the Board. The court found that the Board cannotfocus exclusively on one factor when determining the racingschedule, but must consider all of the factors listed in section20(e-5) of the Racing Act. The court in Balmoral stated that thedates order at issue was defective because the Board improperlyfocused exclusively on one factor. Thus, the court stated that thefindings of the Board should be made evident in the dates orders toensure that the Board had considered the appropriate factors inaccordance with the Act. Balmoral, 151 Ill. 2d at 396. However,we find that Balmoral is distinguishable from this case due to thefact that the parties in Balmoral did not waive their rights underthe Act.

In this case, prior to the dates hearing, plaintiff knowinglyand voluntarily submitted a written waiver of any and all rights toa hearing in accordance with the contested cases provisions of theAct and elected instead to present evidence to the Board at aninformal dates hearing conducted on September 21, 1999. By takingthis action, plaintiff waived, among other formalities, anyrequirement that the Board include in its written order findings offact and conclusions of law separately stated and a concise andexplicit statement of the underlying facts supporting the findings. Having waived these rights, plaintiff cannot now argue that it wasdenied due process because the Board's dates order does not containsuch findings and conclusions. In addition, the proceedings inthis case were informal as a result of the waiver signed byplaintiff and any arguments that the dates hearing or dates ordershould have been more formal have been waived by plaintiff.

Additionally, we find that the Board's findings were notcontrary to the manifest weight of the evidence, nor were theyarbitrary and capricious.

Administrative agencies are given wide latitude in exercisingthe discretion with which they are vested. Alden Nursing Center-Morrow, Inc. v. Lumpkin, 259 Ill. App. 3d 1027, 1031, 632 N.E.2d 66(1994). The factual findings and conclusions of an administrativeagency are viewed as prima facie correct, and a reviewing courtwill not disturb those findings unless they are contrary to themanifest weight of the evidence. See 735 ILCS 5/3-110 (West 1996);Abrahamson v. Illinois Department of Professional Regulation, 153Ill. 2d 76, 88, 606 N.E.2d 1111(1992). It is the function of theadministrative agency to evaluate all evidence, judge thecredibility of witnesses, resolve conflicts in the evidence anddraw reasonable inferences and conclusions from the facts. Smithv. Department of Professional Regulation, 202 Ill. App. 3d 279,284, 559 N.E.2d 884 (1990). A decision is against the manifestweight of the evidence only if the opposite conclusion is clearlyevident. Abrahamson, 153 Ill. 2d at 88. If the record containsevidence supporting the administrative agency's decision, thedecision should be affirmed. Abrahamson, 153 Ill. 2d at 88. Areversal is warranted only where the reviewing court determines,after viewing the evidence in the light most favorable to theagency, that no rational trier of fact could have agreed with theagency's decision. Lumpkin, 259 Ill. App. 3d at 1032.

It is clear from the record in this case that the Boardconsidered all of the required factors under section 20(e-5) of theRacing Act. The evidence presented to the Board and thedeterminations made by the Board regarding the applicants' rails,handle, and revenue were laid out in great detail earlier in thisopinion and will not be repeated here. Given the transcript of thedates hearing and the dates order, we cannot say that the decisionof the Board was contrary to the manifest weight of the evidence. Moreover, the record does not support a finding that the Board wasmotivated by considerations that are impermissible under the RacingAct. The record contains substantial evidence to support theBoard's dates order, and we find that the decision of the Board wasnot arbitrary and capricious. Therefore, we affirm the decision ofthe Board granting racing dates for the year 2000.

Affirmed.

THEIS, P.J., and GREIMAN, J., concur.

1. ¹ Plaintiff did not conduct harness races in the calendaryears 1998 and 1999 pursuant to an agreement between theapplicants. Plaintiff explained that over the years the IllinoisRacing Board has tailored its allocation of racing dates to fitArlington International Race Course, Inc.'s (Arlington's)thoroughbred schedule. Shortly before the 1997 dates hearing(where the dates for 1998 would be determined), Arlington decidednot to race. As a result, the applicants agreed that plaintiffalso would not race in order to allow January and Februaryafternoons to be used to generate purses for the thoroughbredmeeting that was to commence on March 1.

2. ² The Board has authority to award dates for up to threeconsecutive calendar years, but it ordinarily only awards datesfor the next calendar year. 230 ILCS 5/20(f) (West 1996).

3. ³ IHHA is a not-for-profit corporation comprised of owners,breeders, trainers and drivers of standardbred horses. IHHA'spurpose is to promote the welfare of harness racing in the UnitedStates and Canada, with special regard to Illinois.