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Saturday, June 6, 2009

Sports Betting - Hypocrisy and Parochialism

The Record of New Jersey reports that Governor Corzine backs a lawsuit against a federal ban on sports betting which a state senator has brought against the federal government at the behest of NJ horsemen from both breeds. The current federal ban allows sports betting only in Delaware, Montana, Nevada and Oregon. The lawsuit claims that by denying New Jersey the opportunity to offer sports betting it discriminates against New Jersey and the 44 other states who are not allowed to offer it. Understandably, the NJ horsemen from both breeds want the ban overturned so additional revenue will be brought in for purses.

The statement that Governor Corzine made in wanting to join this suit is hypocritical. The Governor claims that Delaware's entry into sports betting and table games are a severe threat to New Jersey casinos and racetracks.

Really Governor? If you are so concerned about the long term viability of racing in the State of New Jersey, how come you have never attempted to bring VLTs to any racetrack in New Jersey despite the studies that show it would benefit racing and the state? Aren't slot machines in NY, PA, and DE a threat to the long term viability of racing in NJ? Wouldn't it be better to allow VLTs in the NJ racetracks rather than allow the money to flow out of state? Not once did you even attempt to expend political capital and introduce legislation to allow VLTs. Surely you would have had to fight the casino lobby but you didn't even try. By freezing the operators of Freehold out of the negotiations for the most recent casino supplement bill and have not invited them to be represented on your blue ribbon committee on the future of racing you have clearly indicated that you don't consider Freehold Raceway important enough to save; especially as long as they are owned partially by Penn National Gaming.

Whether this suit is successful remains to be seen. First of all, being the legislation that eventually banned sports betting in NJ gave the state a one year window to approve sports betting so the state had the opportunity to legalize it. I am no legal scholar but that may mean unless another state gets involved, the court may find that NJ has no legal standing to bring the suit as they did have a chance to get sports betting in the past and decided not to; the state in fact brought the harm upon itself.

Let's assume the suit is successful. What happens one the genie is out of the bottle?

According to earlier reports, it will require a constitutional amendment to permit sports wagering in NJ. The first time NJ tried for a casino gambling amendment it failed; it only passed the second time when casino gambling was limited to Atlantic City. While I assume it would not be a problem, who can say for sure sports gambling doesn't follow the same route?

Hypocrisy aside, this parochial approach by NJ horsemen from both breeds concerns me. There should have been a decision made at a national level by the USTA, AQHA and The Jockey Club whether or not to attempt to support a fight against the federal ban on sports wagering. While this attempt may be beneficial to the NJ horsemen in the short term, in the long run it may hurt racing.

Assuming NJ's efforts are successful, consider this:
  1. Once again we are introducing another form of gambling to our fans in an effort to increase revenue without attempting to improve the racing product. As a result, we may be diverting money from our handles to sports betting.
  2. If handles decreases because less interest in racing, will we be giving opponents of racing another excuse to convert racinos to casinos?
  3. Any state with a casino will attempt to get sports wagering. Will they allow sports wagering their racetracks or only their casinos? This may be the final nail to harness racing in those states without racinos.
  4. Harness racing is regional enough as is. If racing becomes more regional, can it survive?

I am not saying racing should or should not support these efforts. What I am saying is we can't keep making major policy decisions on a local level. Each state is not an island; what happens in New Jersey will impact racing throughout the country. In the long run, those in the sport will prosper or wither on the vine together.

When will we wake up and realize this? Hopefully before it is too late.

FREEHOLD UPDATE: Here is a press release from the SBOANJ regarding a horsemen's meeting on the last day of the spring meet.

Arguement Against Slots at New Jersey Tracks: I disagree with this article but thought I'd share it with you. Please remember this article was printed in an Atlantic City newspaper so realize the article is biased towards the casino industry.

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