New Jersey Privatization Deal Hits Roadblock

A deal brokered earlier this year that would have privatized the horse racing industry in New Jersey has hit a stumbling block just as all parties were set to sign off on it.

The widely publicized agreement, reached in June between the office of Gov. Chris Christie and the Thoroughbred and Standardbred industries, would have resulted in Monmouth Park being leased by developer and casino owner Morris Bailey and Meadowlands being leased by Jeff Gural.

Both tracks are owned by the New Jersey Sports and Exposition Authority.

As part of the deal, the New Jersey Thoroughbred Horsemen’s Association agreed to permit Monmouth Park to race 71 live days per year, down significantly from the 141 dates originally sought, in exchange for the horsemen’s group being able to operate the Thoroughbred dates previously run at Meadowlands, which is to conduct Standardbred racing only under Gural’s operation.

When all parties involved met Dec. 2 to sign the agreements, a representative of Christie’s office said the deal could not be closed because the state attorney general’s office was “uncomfortable with it,” according to NJTHA president John Forbes.

Forbes said no additional details of the problems found by the AG in the agreement were made available and that the parties were given a deadline of midnight Monday, Dec. 5, to reach a new agreement or the state would shut down Monmouth Park. The live race meet at Monmouth is over, but the track is open for simulcasting.

“Apparently they are uncomfortable with our having that (Meadowlands Thoroughbred) permit,” Forbes said of the latest development by the state.

Michael Schottland, attorney for the NJTHA, told the Newark Star-Ledger that Gural had concerns about the agreement because he did not realize in June that in addition to having the Meadowlands’ Thoroughbred dates, the horsemen’s group would also get a cut of simulcasting revenues from the track. The paper said Gural could not be reached to comment on Schottland’s statement.

Although that deadline was not met, Forbes said Monmouth is apparently still open for business. According to the Star-Ledger, Monmouth Park’s employees are on the state payroll until Dec. 23; at that time, they will be employed by Bailey, under the lease agreement.

Forbes said the horsemen’s group is disappointed with the last-minute decision by the state to quash the agreement, noting the lengthy time that had elapsed between the June 21 date the deal was reached and the Dec. 2 meeting to finalize it.

Reflecting on the original deal being brokered just before a deadline was reach, Forbes said “each time we have been under the duress of a shutdown. It is very hard (to negotiate) under those circumstances.”

The president of the horsemen’s group said he is optimistic the latest stumbling block in what appeared to be a viable solution under which New Jersey racing would be operated for the next five years can be worked out. He said, however, the biggest concern is that given the setback Bailey may change his mind about leasing Monmouth Park.

“I would say closing down the New Jersey racing industry is not something they want to do,” he said. “I have faith that the racing industry is valuable to the state and that the governor’s office and everyone will sit down and come up with a solution.”

Forbes said much of the work done on getting the agreement between the horsemen and two lessees was done by Dennis Drazin, the former president of the horsemen’s association who resigned Dec. 1 as chairman of the state racing commission.

The Star-Ledger reported Drazin declined comment on his resignation.
 

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