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New Jersey’s horse racing problems rooted in NFL wanderlust

giantsstadium120610_optBY EVAN WEINER
NEWJERSEYNEWSROOM.COM
THE BUSINESS AND POLITICS OF SPORTS

As New Jersey continues to figure out what to do with the state's financially ailing horse racing tracks, the "popular" (according to media pundits who like to affix tags like popular, hapless or weak to political figures or sports teams) or "superstar" (according to the Tucker Carlson founded Daily Caller conservative political website) Governor of New Jersey Chris Christie has to balance his desire to "fix" the industry with the reality that New Jersey is leaking gambling money to New York, Pennsylvania and Delaware. For more than four decades states have been adding all sorts of ways for the average person to spend money gambling near their homes whether it was at an Off Track Betting facility (and that is now an endangered species in New York) to playing all sorts of games at the local 7-Eleven or Wawa stores. The state would get a percentage of the take and pay off bills.

That opens up a real ethical debate that no one seems to want to address.

Should the state encourage legal gambling knowing that people who have addiction problems might add betting to their addictions as a way to generate revenue or just raise taxes?

Tax hikes, of course, are highly unpopular so why not hide them?

Gambling is a form of taxation and across the Hudson River in Queens, New York, a casino will be opening in 2011 at Aqueduct racetrack. New York's gain could potentially be a New Jersey's revenue loss.

The Queens casino will be operated by a Malaysian company, Genting, and will eventually house 4,525 video lottery terminals. The first 1,600 will be opened sometime in early 2011.There will eventually be a major structure housing the terminals at the Queens racetrack and New York racing will be able to up purses and draw a better grade of horse to Aqueduct, Belmont and Saratoga. New York is also hoping that some of the casinos proceeds will go to pay off education costs in the state. That brings up another ethical question that politicians ran away from.

"Neighborhood" casinos don't attract the "high rollers" who can afford to lose money. The crowd is a lower to middle class crowd that is there for either enjoyment or hoping to hit the jackpot. It is a tax although on the lower and middle class yet it never is packaged that way. Those people will be paying a tax they have never considered because gambling is a form of recreation even though they are the ones shouting about high tax rates.

The same media people who tout "rising star" politicians or "popular" politicians or "superstar" politicians never bother to actually understand that an elected official makes decisions that impact lives and is not a celebrity. The pundits never explain state gambling. Politicians more than four decades ago decided to start state gambling games as a way to collect revenues. That is why there are so many "racinos" — racetracks with slot machines and in some cases table games. That is why restaurant goers can play keno while waiting for a slice of pizza in New York.

For even more New Jersey sports, visit the NJNR Press Box

Aqueduct will be just another casino within a driving distance of northern New Jersey. It will join the Empire City Casino at Yonkers Raceway as a close competitor. Pennsylvania casinos are also within a quick drive and one Poconos casino regularly runs ads on an AM northern New Jersey radio station telling people to make the drive there. In the Philadelphia area, there are slots at racetracks and Delaware along with Maryland also feature slot parlors. Atlantic City is not the only game in town anymore and for those in northern New Jersey, there will be a casino/resort opening in what used to be known as the Borscht Belt near Monticello, New York in the next few years.

That is a problem for the "popular" and "superstar" governor whose main job is to get New Jersey out of the fiscal mess the state is coping with. Of course New Jersey is not alone in the budget problems and no amount of "media celebrity" accolades is going to pull the any state out of the financial crisis.

If that were the case, California with Governor Schwarzenegger would have turn the financial ship around and the Golden State would be swimming in money. It is just not that easy.

Both the thoroughbred and standard bred horse racing industry have been dying for years. At one time, Yonkers Raceway packed 40,000 people into the stands on a Saturday night. That was four decades ago. Now the venue is a casino that features some racing most nights. The same is true at Dover Downs in Delaware and the trend around the country has been to put slots into tracks in an attempt to get people into the venue to bet on something, not necessarily horses. Christie's problem is that Atlantic City is the hub of gambling in New Jersey and the casinos there don't really want any in-state competition for gambling dollars from New Jersey racetracks. Ideally the Meadowlands and Monmouth Park would be the perfect venues for slot machines but that is not happening anytime soon, like this afternoon, and New Jersey is losing money on the racetracks.

Apparently Monmouth lost about $6.5 million this year and the Meadowlands came in at around $11 million in losses. The total was offset by contributions from Atlantic City casinos and taxpayers dollars. Governor Christie wants to end the subsidies but others want to save horse racing in the state and some of the suggestions include internet gambling on races, opening New Jersey's version of Off Track Betting, selling off Monmouth (no one would buy the facility for just horse racing) and limiting racing at the Meadowlands to just a few days a year.

All of the solutions are flawed. If New Jersey does get out of the horse racing industry, the state will lose horse farms and that has a domino falling impact on all sorts of secondary industries from veterinarians to stable operators to people spending money in the community where the farms are located. That means a job and tax revenue loss. Because of casino gambling, Delaware was able to save horse farms that would surely had left if horse racing ended at the remaining tracks in the state. New York and Maryland are struggling with that problem although both states think that they can stem the tide of farms leaving with money from the "machines" as Yonkers Raceway owner Tim Rooney calls them.

The National Football League and other sports leagues would fight legalized sports gambling in Atlantic City although New Jersey lawmakers had the ability to legalize sports gambling in 1993 and passed on the opportunity.

Delaware does have legalized "parlay" National Football League action at the state's casinos.

Ironically, New Jersey got into the racetrack business because of the National Football League. In 1971 and 1972, state elected officials built the Meadowlands racetrack with the thought that the proceeds from the track would help pay down the debt at the new football facility that would eventually house the New York Giants. The football venue was completed in 1976. Meanwhile Leon Hess was becoming more and more unhappy with the terms of his lease at Shea Stadium as his Jets franchise played second fiddle to the New York Mets at the New York City-owned sports facility in Queens. Hess was eyeing New Jersey and his lease with the New York City ended in 1983.



 
Comments (3)
3 Wednesday, 08 December 2010 18:09
Marilyn Lancelot
I am a recovering alcoholic, gambler, and other addiction problems. I published a book, Gripped by Gambling, where the readers can follow the destructive path of the compulsive gambler, a prison sentence, and then on to the recovery road. I recently finished a second book, Switching Addictions, describing the challenges the addict encounters as they work toward recovery. I also publish an online newsletter, Women Helping Women, which has been on-line for more than ten years and is read by women around the world. (www.femalegamblers.info)

Sincerely,

Marilyn Lancelot
2 Tuesday, 07 December 2010 11:32
John Samerjan
"The total was offset by contributions from Atlantic City casinos and taxpayers dollars"

1) the statement is untrue. The casinos provided supplement money for racing purses in return for racing not lobbying for gaming. Those funds went to horsemen not the racetracks. Secondly the taxpayers did not underwrite the net loss (on-track loss minus the net income from OTW and account wagering). That had been covered for three years by other NJSEA revenue.

2) the above comment is uninformed as well. The NJSEA finances are fully public and are fully independently audited. On track racing made net income up through 2006 when racinos were added in neighboring states. Reductions in personnel and operating expenses have kept those on-track losses down,
1 Tuesday, 07 December 2010 10:18
Bob English
Good points regarding competition from surrounding states that is now attracting NJ resident gambling $$. The future success of AC depends on booking conventions and people traveling in from out of state not on buses coming down the GSP from Northern NJ. Those people are going to NY or CT.

Until the NJSEA releases financial info and shows everyone which of its expenses are being charged to the horse racing component of the business, I would take any reports of "losses" with a grain of salt.

Please check out this Facebook page from the link below. Lots of great articles and info on the subject:

http://www.facebook.com/home.php?#!/pages/Save-New-Jersey-Horse-Racing-Allow-VLTs-at-the-Meadowlands/129193943805073

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