NJ Purse Subsidy Fights Getting Ugly

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Issues surrounding a $90-million purse subsidy from Atlantic City casinos continue to plague the New Jersey horseracing industry.

Still unresolved is whether Atlantic City Race Course will get a cut of the money to support an expanded Thoroughbred meet in 2009. Now, Freehold Raceway, a harness track, is said to be in jeopardy because its parent company won’t accept a $1.6-million supplement negotiated by other parties.

The Standardbred Breeders and Owners Association of New Jersey said a Nov. 7 conference call failed to produce a resolution. The SBOANJ had threatened to yank its authorization for simulcasts at Freehold Nov. 5, but allowed more time for negotiations.

Freehold is owned by Pennwood Racing, whose partners are Penn National Gaming Inc. and Greenwood Racing, two Pennsylvania-based companies. Pennwood isn’t against the Freehold subsidy but won’t sign off on the agreement because it keeps racetrack owners from pursuing gaming outside of Atlantic City.

PNGI has expressed interest in developing a casino in Atlantic City. The Pennwood principals, however, would be restricted from pursuing gaming elsewhere in the state while other companies would not in the unlikely event New Jersey were to expand gambling.

The SBOANJ, in a release, said Joe Corbo of the New Jersey Casino Association indicated the casinos probably wouldn’t agree to give Freehold its cut of the subsidy unless PNGI and Greenwood signed the agreement. SBOANJ legal counsel Joel Sterns told Freehold officials the track could end up closing should purses not be supplemented.

“The SBOANJ is prepared to pull authorization for simulcasting signals at Freehold, and will be notifying Freehold that its deadline will now be Nov. 13,” SBOANJ president Tom Luchento said in a statement.

As the official horsemen's representative for harness racing in New Jersey, the SBOANJ has signal consent rights under the Interstate Horseracing Act. The organization has scheduled a horsemen's meeting for Nov. 11 at Freehold.

Pennwood offered to find ways to get the supplement directly to the horsemen who race at Freehold, but all parties wouldn't agree. The sticking point is a demand that PNGI and Greenwood sign the subsidy agreement as written.

Greenwood, operator of Philadelphia Park Casino & Racetrack, owns Atlantic City, which this year offered six all-turf programs but was told by the New Jersey Racing Commission it must race at least 20 days in 2009. Atlantic City officials said they are willing to expand the meet but need more than $2 million to supplement purses.

The purse subsidy--$30 million a year for three years—goes to the New Jersey Sports and Exposition Authority, which operates Meadowlands and Monmouth Park. A previous four-year supplement went to purses at the two NJSEA tracks and Freehold; Atlantic City wasn’t included. Other tracks can be in the mix if the affected parties agree.

The particulars of the purse subsidy deal were negotiated by the Atlantic City casinos and the NJSEA. Greenwood and PNGI reportedly weren't involved in the negotiations.

There is friction between Atlantic City and the New Jersey Thoroughbred Horsemen’s Association, which wants Thoroughbred racing’s share of the subsidy to support racing at Monmouth and Meadowlands. The New Jersey Racing Commission will award racing dates for 2009 at its Nov. 19 meeting; it remains to be seen how it will rule on a racing schedule for Atlantic City, which said it could offer six days without a purse supplement.

During its meet this spring, Atlantic City circulated petitions calling for the track to get part of the subsidy. The petitions were sent to local legislators, who reportedly are assisting the track in the subsidy fight so it can maintain live racing and support the southern New Jersey economy. Atlantic City is open year-round for simulcasts and operates an off-track betting parlor in nearby Vineland.