NJ Racing Interests Seek 'Diversification'

New Jersey racing interests are calling for diversification of the on-site product.

New Jersey lawmakers split along geographical boundaries during the second “summit meeting” on gaming and horse racing Sept. 10, with those from North Jersey saying slot machines at Meadowlands should be considered, and those from South Jersey seeking to protect the Atlantic City casino industry’s monopoly in the state.

The meeting, held at Meadowlands, didn’t break new ground but did shed light on the restructuring of racing in the wake of the less-is-more Monmouth Park meet this year and calls by Gov. Chris Christie for racing to stand on its own.

Dennis Robinson, chief executive officer of the New Jersey Sports and Exposition Authority, which operates Monmouth and Meadowlands, said officials want to bring the Monmouth model to Meadowlands for harness racing next year. He also told lawmakers that legislation must be revised to facilitate construction of more off-track betting parlors in the state.

“We think the Monmouth plan can work at Meadowlands,” Robinson said. “It’s a model we want to bring up here as well.”

From May 22-Labor Day, Monmouth raced 33 fewer days than last year but increased total pari-mutuel handle by about $180 million. About $20 million in purses came from a casino supplement that ends this year.

Tom Luchento, president of the Standardbred Breeders and Owners Association of New Jersey, supports the less-is-more experiment but said gaming should be offered at Meadowlands.

“We propose to follow the model of Monmouth Park’s (Elite Summer Meet) and trim the Meadowlands racing schedule to 100 dates with purse money that will lead our industry,” Luchento said. “We propose that the Meadowlands evolve into a gaming facility with racing among the many offerings. This is not only about making horse racing solvent—it is about a dramatic flow of funds for the state treasury, upward of a billion dollars a year.”

Robinson said he couldn’t speak directly to gaming because of the casino purse supplement, which requires the NJSEA to not pursue alternative gaming. The deal ends in 2010.

Robinson instead spoke about “subsidization versus diversification” in gaming and racing.

“We’re in a business that sells bets for a living, and the casino industry sells bets for a living,” Robinson said. “It’s difficult to compete in the gaming industry with one game of chance.”

The casino purse supplement—in effect a payoff—isn’t a subsidy, though it’s often described as such. Democrat Sen. Paul Sarlo, in his comments at the Sept. 10 meeting, said the NJSEA over the years has generated debt service through non-racing projects, including the Atlantic City Convention Center, from which the casino industry benefits.

The NJSEA reported that more than 50% of the $735 million in debt service isn’t tied to horse racing.

“This is an important number to take with us,” said Sarlo, who supports gaming at Meadowlands. “The sports authority has been making investments in other parts of the state, including Atlantic City.”

Democratic Sen. Ray Lesniak claimed the state has been subsidizing casinos by charging them a state tax rate of only 8% and granting gaming halls numerous legislative breaks over the years.