CHICAGO – Bankrupt Hawthorne Race Course is accusing the head of the Illinois Department of Agriculture of diverting horse‑racing funds to a competing track, alleging the decision was improperly influenced by the director’s lobbyist brother.
In filings submitted in federal bankruptcy court, Hawthorne claims Agriculture Director Jerry Costello reduced the track’s purse allocations while increasing payments to Fairmount Park in Collinsville. The track alleges the shift benefited Fairmount’s affiliated horsemen’s group, which is represented by Costello’s brother, lobbyist John Costello.
John Costello denied the allegations, calling them “defamatory” in comments to the Chicago Tribune. Jerry Costello declined to comment, citing ongoing litigation.
Hawthorne, a historic track in Stickney outside Chicago, filed for Chapter 11 bankruptcy protection in February. The track reported assets between $50 million and $100 million and liabilities ranging from $100 million to $500 million.
Funding Shift Under Scrutiny
In its filing, Hawthorne said its share of state racing funds has been reduced by roughly $317,000 since entering bankruptcy, while Fairmount Park’s allocation increased despite what the track described as “no material operational changes.”
“Despite no material operational changes, Fairmount Park received disproportionately large allocations while the debtors’ share was significantly reduced,” Hawthorne’s attorneys wrote.
The filing alleges the decisions “were made at the direction of Jerry Costello through the IDOA and the Thoroughbred Board and were influenced by the lobbying efforts of John Costello.” The claims have not been proven in court.
A federal judge on May 27 granted Hawthorne permission to issue subpoenas and seek depositions from both Costello brothers and Fairmount Park officials as part of its investigation.
Track Seeks Buyer Amid Industry Turmoil
The Illinois Racing Board in January ordered Hawthorne to halt live racing and suspend its off‑track betting operations after horsemen received bounced purse checks. The track’s owners are now seeking a buyer through the bankruptcy process, with the property to be sold to the highest bidder.
Hawthorne President and CEO Tim Carey has said the track has drawn “substantial interest from potential buyers and recapitalization partners,” citing the long‑stalled casino project approved for the site in 2019. The track demolished part of its grandstand in preparation for redevelopment, but financing never materialized.
A bill pending in the Illinois legislature, sponsored by Rep. Bob Rita, D‑Blue Island, aims to stabilize the state’s racing industry by reducing racino‑related fees and extending repayment timelines for operators.
