PNGI Sues Greenwood Over Jersey OTB Parlor

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Penn National Gaming Inc. said June 17 it has sued Greenwood Racing—its partner in Freehold Raceway—over its failure to build an off-track betting parlor in Camden County, N.J., where the old Garden State Park was located.

Garden State, now a retail and residential complex called “Garden State Park,” closed in the early 2000s. Greenwood, which owned the track at the time, had said it would build an OTB parlor on the property in Cherry Hill Township, but the project never came to fruition.

PNGI and Greenwood, operating as Pennwood Racing, built an OTB facility in Toms River in Ocean County. It opened in April 2008 and has produced about $40 million a year in wagers, according to a PNGI release.

The eight-count lawsuit cites multiple breaches of fiduciary duty by the three appointed Greenwood Racing directors that sit on the Pennwood Racing board, as well as anti-trust claims under federal and state laws. PNGI claims that since 2003, Greenwood Racing’s appointed board members for Pennwood “have used multiple delay tactics culminating in an outright refusal to develop an (OTB parlor) in Camden County. Penn National believes the reason for these actions is based on Greenwood Racing’s ownership of (OTB) locations in and around" Philadelphia. Pa., and in Vineland, N.J.

Greenwood owns Atlantic City Race Course in South Jersey, as well as the Vineland OTB parlor. It also owns a ring of OTB facilities in and around Philadelphia, including two just across the Delaware River from Camden County. ACRC is open for year-round full-card simulcasts but isn’t considered an OTB parlor.

It’s not unusual for South Jersey horseplayers to venture across the river to Greenwood facilities; Harrah’s Chester Casino & Racetrack, also in Pennsylvania; or Delaware Park to wager on horses. Camden County and two neighboring counties close to Philadelphia are the most densely populated in South Jersey.

Pennwood has the right under a 2001 state law to develop up to four OTB parlors in southern and central New Jersey. Thus far, only two—Toms River and Vineland—are operating.

The New Jersey Sports and Exposition Authority, which operates Monmouth Park and Meadowlands, has opened one parlor, in Woodbridge Township in North Jersey, but has plans in the works for several more.

“Greenwood has consistently worked to delay and ultimately kill a project that they knew would compete against their wholly owned (OTB parlors),” said Eric Schippers, vice president of public affairs for PNGI. “As a result of their selfish actions, the state of New Jersey and Camden County have been denied important new tax revenues and the creation of new local jobs and economic development while New Jersey’s struggling horse racing industry is missing out on potential new revenue.”

PNGI said it is seeking an award of damages, which could be trebled under anti-trust laws, as well as injunctive relief directing Greenwood directors to consent to the proposal to develop a Camden County betting parlor.

The legal action comes at a critical time for New Jersey racing, with a state panel examining ways to structure the industry moving forward. There has been talk of selling OTB licenses to get more of the parlors up and running.

Atlantic City, meanwhile, has come under fire for only racing six days a year to maintain its simulcast license.