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Monday, June 1, 2015

Proposed Constitutional Amendment - Good for Meadowlands? Possibly; Horsemen? Less Sure

A proposal for a constitutional amendment to allow casino gambling in North Jersey has been submitted according to John Brennan of NorthJersey.com .  The proposal, which already has people in South Jersey foaming from their mouths would allow for one casino in each of three North Jersey counties, including Bergen County, the home of the Meadowlands Racetrack.

Would this bill be good for Jeff Gural and the Meadowlands assuming it gets through the legislature and approved by voters in November?    On the plus side, the bill would allow one casino each in the counties which are home to Jersey City and Newark, likely competitors if there would be only one casino license in Northern New Jersey, thus taking these two cities out of the equation.  As for Bergen County?  Realistically, the Meadowlands is the only area which makes sense to have a casino.

Of course on the downside, there would be three casinos instead of one which would make any Meadowlands casino less profitable as the pie would be split three ways.  The other negative is a section of the resolution which states: "The Legislature would be required to give priority to a proposed casino that will create, compared to another proposed casino, more permanent jobs and construction jobs.”  

One would assume another group will vie for the license, perhaps the group building American Dream.   Remember when Tioga Downs lost out on a bid for a gaming license, the selection committee discounted the capital expenditures already made at Tioga.  Hence, any proposal by Hard Rock and the Meadowlands would need to blow away any proposal made by a potential competitor, otherwise the Meadowlands may find themselves empty-handed.  Are the pockets deep enough to come up with a winning proposal?   Of course, there is always a possibility of a partnership which would eliminate competition, keeping costs intact for all parties.

What about the horsemen?  Assuming the racetrack gets their hands on the license, it would initially be good for the horsemen.  Down the road, less sure.  In the resolution, you will see the following: "The State’s share of taxes from these casinos would be used for programs that help senior citizens and people with disabilities and for non-gaming development in Atlantic City".  Nothing about dedicating any funds from anyone to horsemen.

While I have no doubt Jeff Gural would cut horsemen in on the profits (remembering an agreement with the NJTHA requires a share to go to the thoroughbred horsemen), the question is would it be enough?  A trial balloon previously proposed by Gural got a resounding thumbs down from horsemen.  Will enabling legislation require a Bergen County casino to negotiate with horsemen the percentage they will get?  Will it require only a Meadowlands-operated casino to contribute and allow Essex and Hudson County casinos not to, putting a Meadowlands casino at a competitive disadvantage?  

Even more disturbing is the absence of a requirement in the proposed amendment to dedicate a portion of the revenue to horse racing.  It is possible the horsemen may be 'Christied' once again, left out of the equation, or as the state has done in the past with other programs, take any funding dedicated to horse racing and put it in the general fund where it can be used by the state for anything else it deems a priority?  If horsemen are to be protected, it is important any referendum specifies a percentage to be dedicated to horse racing, otherwise it is a matter of when the state starts diverting a portion or completely eliminates the share which may go to horsemen.

While track operators and horsemen desperately need casino gaming in Northern New Jersey, I don't think this is the proposal; certainly not for the horsemen.