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Future of NJ’s Horse Racing Industry Bleak

Posted on November 18th, 2010

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With the plans of incorporating Atlantic City into a tourism district, promoting further its casinos, the attention on the other gaming industry of the state,horse racing, has gone downhill. With the downright admission of the legislature during its public forums that they would push for the casino industry to stop funneling funds to horse racing, new plans forwarded by the governor’s office seem to further alienate the industry. The Meadowlands Racetrack, which during its heyday became the premiere harness racing track in the continent, is suggested to only have only six days of activity for 2011, if a new plan proposed by a top adviser to the governor were to be followed.

The report of Jon F. Hanson, which is a supplement to a review he made of the horse racing industry of the state and the casino industry of Atlantic City, suggested a small summit to discuss the Hambletonian, a major horse racing event held every summer. Hanson also suggested that the standardbred industry could move its base of operations to Monmouth Park, the center of thoroughbred racing. This announcement was made as a state Senate committee in Trenton approved a measure that would give $30 million in revenues to be received every year from online casino gaming to supplement horse racing purses, making them competitive with rival tracks of other states that are currently supported subsidized by expanding gambling and slot machine revenues. Hanson wrote that after using different models, he concluded that the two government-operated race tracks cannot utilize any self-sustaining industry model. He continued, “Consequently, we present a direct and difficult solution to a problem that has been in the making for decades. That solution is a structured plan to enhance the value of the state’s racing assets and divest the state’s interest therein, thus maximizing the value for the taxpayers of those tracks and the public land they occupy.”

Tom Luchento, the president of the harness racing industry trade group of New Jersey, said he did not expect the recommendations of Hanson. According to Hanson’s report, his recommendations are inevitable since he projects that the Meadowlands Racetrack, which is owned by the state, will lose 10 million dollars for 2010. Luncheto explained his feelings about the pronouncement by saying, “Hanson has had a hatchet out on us the whole time. I just hope the governor doesn’t fall for this. And if he does — they would face some serious legal hurdles.” Luchento said that with just 36 racing dates for 2011 which the report recommends, the industry would not be able to survive. In an irritated tone, he said, “You might as well pull the plug on us now.” He explained that the state continues to get funding from the track despite the losses the industry has collected in the recent years. He pointed out that thousands of jobs will be lost throughout the state should horse farms be relocated or closed. However, Christie and the senate both have insisted that the tracks have to be self-sufficient, and they are not promoting slot machines to be installed in them.

Hanson, the former New Jersey Sports and Exposition Authority chairman, on horse racing and gaming issues has known to have the full support of the governor. With his proposals, Hanson said, “We are under no illusions about the ease of implementing these recommendations. But, we have inherited a set of conditions that have been allowed to worsen for a decade and the status quo is simply unsustainable.” State Sen. Jeff Van Drew referred to the bill as “a good compromise”, eliminating the horse racing industry’s woes in regarding its purses while also giving Atlantic City a boost.

Meanwhile, the Senate Budget Committee in Trenton also approved a measure that would make New Jersey the first U.S. state to legalize online casino games. State residents would now be allowed to play the game within New Jersey. This may run into problems with federal law, which is why the governor would have his attorneys review it before he affixes his signature. Senator Ray Lesniak, meanwhile said that full implementation of online wagering and the approval of the betting on professional sports, which is currently being debated on, has the potential of giving the state close to $350 million in revenues yearly.