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Last NJ Summit on Gambling Practically Gave Horse Racing Industry Death Note

Posted on October 3rd, 2010

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The third and last of a series of symposia and town hall meetings regarding the plight of the gambling industry in the state of New Jersey was finally held in the middle of the week. It seems that despite the plans and goals that have transpired for the past two conferences, this third has brought everyone back to earth with a very sad reality: there will be a larger divide between the casino businesses and the horse racing industry, which has been a bit reliant on the hand-me-down revenues the former has been funneling to it.

The possibility of the bigger divide between the two industries, each based in the opposite ends of the state, was expressed no less by the head of the advisory panel of the governor that has been formulating plans to resuscitate the gaming industry in the state, particularly on Atlantic City. Proponents of the horse racing industry from North Jersey has been pushing for South Jersey, which has the casinos, to give them assistance for their industry to come back to life. The advisory panel head claimed that the casinos in Atlantic City are themselves hard up on money that they cannot possibly support the horseracing industry, which is also in dire need of help. He adds that the state of New Jersey is not in the position to appropriate funds from casinos to horse racing facilities.

In the conference, which lasted for an hour and a half, Jon F. Hanson was grilled by legislators from the Democratic Party that is currently reviewing the recommendation of the Republican governor, Chris Christie, about the future of both industries in state. Hanson said, “We’re in favor of horse racing, just not in favor of the taxpayer paying for it.” Hanson repeatedly expressed his body’s support for horse racing, but also said that in order for the industry to survive, support for it must come from the private sector. The conference, ironically, was held in the Turf Club at Monmouth Park, a horse racing track, which along with three others, may have to suffer under the plan of Governor Christie. More or less 50o people attended the summit, a good number of them were from the horse racing industry – farmers, horsemen, jockeys and breeders. The atmosphere was obviously tense as the attendees were standing at the back and listening intently at the speaker, a man who could very well end their source of livelihood.

In July 21, the proposals of Christie were revealed to the public “the Hanson Report.” The more prominent items in the proposal are the takeover of the casino and entertainment district of Atlantic City by the government. The horse racing industry is also to lose the subsidy it gets from casinos, which has been in effect for seven years. The subsidy, which has totaled to $30 million this year and is targeted to reach $7.5 million next year, has reached $176 million for the past eight years. The four racetracks at Atlantic City, Freehold, Monmouth, and the Meadowlands have benefited from this subsidy, while they assure casinos that they will not be putting up video lottery terminals, or VLTs, in the race tracks. Hanson added, “The horsemen have to come up with a solution that does not require the State of New Jersey writing a check for $45 million.”

The horse racing industry is facing a deficit because of attendance decline, purses getting smaller, and the preference of top breeders to transfer to neighboring states like Delaware, New York, Pennsylvania and West Virginia. The neighboring states, to add insult to injury, have also allowed VLTs and slot machines in their horse racing facilities which in turn increased revenue and also added to the pearnings In Pennsylvania alone, there are six racetracks hosting slot machines. To this, Hanson remarked, “We’re in favor of horse racing,but we just have to find a way to balance its expenses and income. There’s no longer money to subsidize the industry with the significant decreases in casino revenues.” The mood among the horse racing crowd in the summit ranged from pensive to pessimistic. Horse racing provides more than 12,000 jobs in the state and generates more than a billion dollars every year.