Published on: May 29, 2026, 09:13h.
Updated on: May 29, 2026, 09:18h.
- Bankrupt Hawthorne claims state funds redirected to rival track
- Federal judge grants subpoenas for Costello brothers and state officials
- Conflict arises as Illinois horse racing sector faces instability
Bankrupt Illinois racetrack Hawthorne Race Course is accusing Jerry Costello, the director of the Illinois Department of Agriculture (IDOA), of misallocating horse racing funds to a competing track, which is represented by his brother, lobbyist John Costello.
John Costello has rejected the claims, labeling them as “defamatory” in his statement to the Chicago Tribune. Jerry Costello has chosen not to comment, citing ongoing legal proceedings.
Hawthorne, a historic racetrack located near Chicago in Stickney, filed for Chapter 11 bankruptcy protection in February, reporting assets valued between $50 million and $100 million and liabilities ranging from $100 million to $500 million.
‘Alarming Connections’
In court documents, the racetrack asserts that following its bankruptcy filing, the IDOA reduced Hawthorne’s allocation of state horse racing funds by approximately $317,000 while increasing distributions to Fairmount Park, its main competitor in Collinsville, Illinois.
The documents indicate “alarming connections” between the agriculture director and his brother, who represents the Illinois Horsemen’s Benevolent & Protective Association.
“Despite no significant operational changes, Fairmount Park received disproportionately large funding allocations while the debtor’s share was heavily diminished,” argued Hawthorne’s legal representatives.
The attorneys claimed that the funding decisions were made under the influence of Jerry Costello through the IDOA and the Thoroughbred Board, influenced by John Costello’s lobbying activities. These claims have yet to be substantiated in court.
A federal judge has recently approved the racetrack’s request to issue subpoenas and seek depositions from the Costello brothers and officials from Fairmount Park to further probe these allegations.
Hawthorne on the Market
In January, the Illinois Racing Board mandated the racetrack to halt live racing and suspend operations for off-track betting (OTB) after horsemen received bounced purse checks.
The current owners are looking for a buyer through bankruptcy proceedings and will sell to the highest bidder. Hawthorne’s President and CEO, Tim Caey, mentioned there’s been “significant interest from potential buyers and recapitalization partners” triggered by the transformative prospects of a casino project at the racetrack.
In 2019, the state granted Hawthorne preliminary approval for a casino project, leading to the demolition of part of its grandstand for redevelopment. However, the project has faced delays.
A new bill in the Illinois legislature, proposed by Rep. Bob Rita (D-Blue Island), aims to stabilize the horse racing sector by cutting racino gaming fees and extending repayment periods for racino operators.