The New Jersey Sports and Exposition Authority said March 1 it has reached an agreement with the New Jersey Thoroughbred Horsemen’s Association for the lease of Monmouth Park in time for the track’s 2012 racing season.
The two parties hope to close on the deal in early May 2012. Monmouth usually opens for live racing in late May, though specific racing dates have not yet been approved by the New Jersey Racing Commission.
The New Jersey THA entered the picture late last year when plans by casino owner Morris Bailey to lease Monmouth fell through. A lease of Meadowlands to developer and racetrack casino owned Jeff Gural was finalized.
Republican Gov. Chris Christie has pushed to privatize racing in the state. New Jersey’s other two tracks, Atlantic City Race Course and Freehold Raceway, are privately owned.
Under the agreement, the horsemen’s group will operate Monmouth and up to five off-track wagering parlors, including one currently operating in Woodbridge Township. The New Jersey THA also will work in conjunction with the lessee at Meadowlands to operate the state’s advance deposit wagering system.
The about five-year lease will end Dec. 31, 2016 with an option by the New Jersey THA to extend it for up to three 10-year-terms, officials said. Rent will be scaled, according to the agreement.
For the first five-year period, the horsemen’s group will pay $1. If renewed, rent will increase to $250,000 or 5% of net operating profits; for subsequent renewals it will be $500,000 or 5% of net operating profits.
Though the New Jersey THA must pay all operating costs at Monmouth, the NJSEA said it will “advance” $5 million that must be repaid as “rent” over five years beginning in June 2015. Because of anticipated operating losses of $8 million this year, the NJSEA said it agreed to provide a $4 million “grant” for 2012.
The NJSEA also will pay up to $2 million in 2013 and 2014 for operating losses. The money must be repaid.
The contract does contain language regarding casino-style gambling should it become law outside of Atlantic City.
“If the laws relating to gaming change, then the New Jersey THA has the right to conduct such gaming from the racetrack,” the NJSEA said. “If the New Jersey THA elects not to exercise the available gaming rights, then the NJSEA has the right to conduct such gaming from the racetrack.”
Should the horsemen’s group default on the lease or violate the contract in other ways, the NJSEA said it will retake control of Monmouth, wagering parlors, and the horsemen’s share of the ADW operation. The New Jersey THA would have to allow the state to run a 71-day meet—similar to what is expected this year—for comparable purses.
Purses this year are expected to average about $400,000 a day, according to the New Jersey THA. Last year, for 71 days of racing, Monmouth paid $430,672 for 77 days, six of which made up a Meadowlands-at-Monmouth meet that allowed Thoroughbred horsement to maintain simulcast revenue.