Five months after Gov. Chris Christie called for an end to horse-racing subsidies in what racetrack advocates called a “death sentence,” a package of bills designed to bolster racing will face legislators Monday in the Assembly.
Consideration of key racing bills — allowing “exchange wagering” on races and forcing anyone holding an idle off-track wagering parlor license to use it or lose it next year — signals that the revenue-boosting measures could be signed into law ahead of a critical but more contentious package that would transform the Atlantic City casino and tourism industries.
The chance that racing could have its immediate future secured before the gaming resort’s illustrates the influence of northern New Jersey legislators over the drawn-out negotiating process involving bills to create a state-run Atlantic City tourism district and reform casino regulations. Key legislators, including state Sen. Paul Sarlo, D-Bergen, Essex, Passaic, and Assemblyman Ralph Caputo, D-Essex, have forced southern legislators to put funding for horse racing front and center in the process that was meant to focus on improving Atlantic City.
As for orchestrating the timing of the bills’ passage, majority-party Democrats kept gaming and racing in lock step, despite protests from the governor.
Governor ignored
Horse-racing advocates watching the bills’ accelerated arrival say they cannot help but have flashbacks to the summer, when Christie announced a landmark switch in state policy toward the gaming and racing industries. Where horse-racing tracks were once run with state subsidies, Christie said state support for the sport could no longer continue.
At that point, leading advocates said they feared the worst.
“We knew the governor’s plan spelled disaster,” Tom Luchento, head of the Standardbred Breeders and Owners Association, said Thursday. “The question was, what could we do about it?”
The horsemen’s answer was to try to convince influential legislators not to leave racing behind.
In the intervening months, lawmakers from northern New Jersey have used their muscle to persuade their southern counterparts to accept something they had previously decried: a new, transitional three-year subsidy from casino revenue to horse purses.
Luchento estimates standardbred racing needs $400,000 per racing day in purse revenue to run a 100-day season. The New Jersey Sports and Exposition Authority estimates running the standardbred season at the Meadowlands racetrack costs $52 million. A spokeswoman for the thoroughbred industry did not return a request for comment, but Monmouth Park spent $50 million this year on purses for 50 days of thoroughbred racing.
Christie said in July he wanted to see an end to a $30 million annual subsidy from casinos to horse purses.
The horsemen had good reaon to demand to know how much revenue they will have next year, said Assemblyman John Burzichelli, D-Salem, Gloucester, Cumberland.
“They need to report purse conditions soon, to say how much they will be offering,” Burzichelli said.
“Forty million a year in purses is what we’d like,” Luchento said. But potentially losing the casino subsidy has made horsemen think about how much money they need to operate.
Three-year subsidy
A three-year subsidy tied to savings from Atlantic City casino deregulation would give racing $15 million next year, then $10 million and $5 million in years two and three, respectively.
That subsidy first appeared buried in the Senate bill to create a state-operated tourism district in the resort. Its appearance came as the Atlantic City legislation progressed more slowly than expected through legislative hearings in November under the strain of repeated edits and amendments to keep all sponsors on board.
“I can’t say who ultimately demanded that be added, but Sen. Sarlo and Assemblyman Caputo were influential throughout the process,” said Sen. Jim Whelan, D-Atlantic. “As for who agreed to it, we all did, because we see the political reality of getting those bills passed and getting the votes.”
“This is about finding a little happiness for everyone,” said Sharon Schulman, executive director of the Hughes Center for Public Policy at Richard Stockton College in Galloway Township. “There’s political will not so much to delay the Atlantic City legislation but to speed up the racing proposals.”
Sarlo was keen to remind everyone of the issues as a twinned pair Nov. 22. Five horse-racing bills passed the chamber as the Atlantic City legislation had to wait to be amended before it could receive a full vote.
“These actions show that horse racing will not be left to die, and that what’s good for Atlantic City has to be good for the tracks as well,” he said.
Whelan said sending the racing bills forward amounted to an “act of good faith on our part.”
“We said when we started talking about Atlantic City that we would put together measures for horse racing at the same time, and that’s what we’re showing we will do,” he said.
The racing proposal comes in many parts, some of which have already passed major votes: A bill by Sen. Raymond Lesniak, D-Union, to allow online gaming through casino-run portals now includes a provision to send a slice of the revenue generated to horse purses, a deal that would supersede the three-year subsidy but will only take effect if online gaming is operational.
New revenue
The bills in the Assembly on Monday also create new forms of revenue for the industry, which has failed to raise money to operate and offer winning purses required to lure trainers and jockeys.
Exchange wagering allows two betting customers to pair up on a bet if they wager on opposite outcomes. The practice, put forward by Sen. Richard Codey, D-Essex, has become popular in other countries, and New Jersey residents would be the first in the country to try that kind of betting. To help horse-racing operations, the bill puts 50 percent of exchange wager revenue aside for racing purses.
Opening more off-track wagering parlors would mean a bump in revenue for the racing industry. But racetracks have used only three of 15 licenses granted to them statewide to open off-track facilities. A bill up for consideration would allow nonracing business entities to open off-track parlors if racetracks do not start using the licenses.
Schulman stressed that these agreements should not be viewed as greedy but as part of the necessary bill-making process.
“This isn’t pork barrel, adding incentives. These legislators care about who they represent,” she said.
But while the horse-racing bills may soon reach the end of the legislative process, the Atlantic City bills have not been scheduled for a full vote in either house.
Whelan said he could stand that pace.
“The packages are traveling concurrently,” he said. “Fairly concurrently.”
Contact Juliet Fletcher:
609-292-4935
JFletcher@pressofac.com