Note: The following is an open letter to Governor-Elect Christie. While the letter is written with a New Jersey focus, many of these issues can apply to other states.
Governor-Elect Christie,
Congratulations to you on your election as Governor for the State of New Jersey. The people of New Jersey have elected you to this powerful office in their desire for change. In particular, many horsemen and horsewomen have voted for you in frustration, feeling that horse racing has been sacrificed for the benefit of Atlantic City. Make no mistake, some horsemen are still frustrated by your pledge not to allow VLTs outside of Atlantic City, feeling the only way racing can survive is with the introduction of slot machines at the Meadowlands. While I feel a lot of racing's problems have been self-inflicted, such as refusing to reduce the takeout rate on wagers thus encouraging gamblers to seek better investments for their gambling dollar; taking too much time between races; racing meets that go on too long promoting fatigue amongst the gambling faithful; the failure to introduce wagers which promote higher payoffs for the smaller bettors; in the case of harness racing using a confusing conditioned system to fill races instead of an easier to understand classified system; racing has been hampered by its prior refusal to adjust to the new marketplace. Now that racing is looking to make the changes it needs to survive, the antiquated regulatory system of the various states keeps racing from reacting to the new competition it faces in an effective manner. It is time to look at racing as legitimate industry and not just as gambling.
I understand your commitment to Atlantic City and your desire to keep gaming limited to the city. In certain ways, Atlantic City casinos have become 'too big to fail' with regards to their impact on tourism and employment. However, I do believe you are sacrificing New Jersey's revenue stream with this decision. New York has racinos; one very close to New Jersey at Yonkers Raceway with another racino planned for Aqueduct Racetrack. Pennsylvania has racinos with the likelihood of table games being introduced there shortly. How many millions of dollars are New Jersey residents spending in racinos in New York and Pennsylvania, generating revenue for those states instead of New Jersey? It boils down to convenience. How many slot playing residents in Bergen, Essex, Union and Passaic counties are heading to Yonkers Raceway because they can get to Yonkers in as few as 30 minutes compared to the two and half plus hours it takes to get to Atlantic City? How many residents in counties like Sussex, Warren, Morris and other counties are heading to Pennsylvania for similar reasons? These dollars are not coming back to New Jersey unless you make it easier for the residents in counties surrounding Pennsylvania and New York to gamble on slot machines in state. A VLT parlor at The Meadowlands would allow New Jersey to generate funds to help balance the New Jersey budget instead of helping New York and Pennsylvania balance their budgets.
Would VLTs at the Meadowlands impact Atlantic City? It would be naive to say it wouldn't but there are ways it can be minimized. Let a consortium of Atlantic City casinos manage the slot parlor at the Meadowlands and cut them in for a share of the revenue generated along with the various race tracks and horsemen who race in New Jersey. Allow slot players to earn comps which can be used not only for free slot play at the racino, but also give the customer a chance to earn table credits or a free room in Atlantic City as well as betting vouchers good at any New Jersey racetrack.
Make no mistake about it, racing would certainly benefit from the introduction of VLTs at the Meadowlands and possibly other racetracks. The funds generated by the VLTs could help put racing on a better footing, subsidizing purse accounts and the bottom line of racetrack operators, of which the state of New Jersey is indirectly one. The one problem with VLT revenue is that in other states, none of that new found money is used to improve the product. Track operators are content to improve their bottom line; horsemen are content to pocket all the revenue in the form of increased purses and breeder awards, but most racinos (there are a few exceptions) are content to make capital improvements in the casino side of the facility, but are hesitant to make any capital improvements in the racing side of their building and are content to leave the horse players in run down facilities. They are unwilling to use any of the slot revenue to make the racing product better to stimulate the racing game. Should New Jersey ever allow racinos, it will be necessary to legally mandate part of the VLT revenue be used for racing-related capital improvements and marketing as well as an offset for part of the takeout.
As previously alluded to, there are things which can be done to stimulate the horse and horse racing industry in New Jersey outside of VLT revenue. Since you have publicly stated that you wish to help the horse industry without introducing VLTs, permit me the opportunity to offer some suggestions for you to consider in your efforts to help the horse racing industry. I am not saying all of these ideas will work, but they are worth considering. Coming from a person with an interest in harness racing, many of the suggestions are geared towards the standardbred side of the equation; no doubt many of these suggestions can be replicated on the thoroughbred side.
If you decide to appoint your own committee to study the problems of horse racing, I would suggest you appoint a representative of HANA (Horse Players Association of North America) to your committee. While horse racing is a sport, it is important to recognize gamblers help keep the sport going. Therefore, it is important to have a spokesman for the fan and gamblers in on any discussions. Also, since Freehold Raceway is an active racetrack, make sure you appoint someone from Pennwood Gaming to be on the committee. Governor Corzine froze them out of his blue ribbon panel and the negotiations for the current purse enhancement agreement, resulting in Freehold being forced to reject the purse supplements which resulted in their racing product deteriorating. Once can't blame Freehold for rejecting an agreement they had no say in.
New Jersey legalized Off Track Wagering facilities but many municipalities have been reluctant to host them. This may because there is no sufficient financial incentive to make it worthwhile to the municipalities. The suggestion is to give municipalities a financial interest in an OTW. For wagers made at a specific OTW, dedicate .1 or .2% of the takeout to the municipality hosting the OTW to be used any way the local government deems fit. All of a sudden, you will find local governments looking to host one of the remaining eleven OTW facilities not yet built. Where an OTW has already been built, if the racetrack operator already has a financial deal with the local government, it may be modified so the town/city can get their share of the takeout instead.
Reintroduce the New Jersey Fair Circuit where races can be held for second tier horses. There would be no betting on these races but it would allow harness racing to be on display in local communities, perhaps as part of a local festival. These races were discontinued in the past because they were considered expensive and a hassle, but eliminating them was a mistake; it eliminated an effective way to market the sport to New Jersey residents and develop fans. The fair circuit can be funded by a small portion of the takeout which should not only cover purses, but expenses involved with a local training facility hosting the races.
Introduce a V75 and V64 bet to New Jersey in cooperation with the lottery. This bet is very popular in Sweden and Europe and is a low cost wager ($.10 for the V75 and $.20 for the V64). The key to the bet's success is they are sold like lottery tickets; fans can make their own selections or can have the machine make their picks for them. The suggestion is to offer this wager in conjunction with the New Jersey Lottery. The V64 can be held midweek at Freehold Raceway and the V75 can be held at the Meadowlands on Saturdays. Initially, gamblers making the wager through lottery dealers would be restricted to quick picks; those who bet at the track will have the option of making a quick pick or making their own selections. Let's assume 80% of each bet gets returned to the bettors in payoffs. The remaining 20% gets split equally between the lottery and hosting racetrack when the bet is made at a lottery agent and when the bet is made at a racetrack, the racetrack gets the whole share of the takeout to be shared with the horsemen. A half hour result show produced by the racetrack(s) can be shown on NJ Network and/or on the Internet. This is a win-win situation; the state of New Jersey gets revenue for education through the lottery and the racing industry not only gets revenue, it gets the opportunity to reintroduce horse racing to New Jersey residents.
Replace the New Jersey Sire Stakes with a New Jersey State Stakes. Due to semen transport, the sire stakes is not fulfilling the original purpose of stimulating agriculture. Unlike the NJSS, these races would be open not only for New Jersey sired horses, but for horses foaled by broodmares that spent at least six months in New Jersey before giving birth. Not only would the breeders continue to benefit, but it would stimulate agriculture in New Jersey by once again encouraging the development of horse nurseries in the state that went away once semen transport came into vogue. This will allow struggling horse farms to remain open and stimulate employment and allow farmland to be preserved.
Continue purse supplements for at least three more years to see how these proposals work. After the first year, the purse supplement may be reduced to reflect the success of these efforts. At the end of three years, the supplement program can be revisited. I know Atlantic City does not like the supplements, it can be explained they are paying the state for providing them a monopoly on casino gaming. The terms of the purse supplements should be restored to the original agreement, where racetracks agreed not to seek slots at their tracks instead of anywhere; this will allow Freehold Raceway to take advantage of the supplements.
I know the NJRC is considering a fair start rule. If not yet implemented by the time you become governor, press the racing commission to implement a fair start rule. While racing is trying to promote racing, nothing is more counter productive than letting a gambler lose their money well before the start of a race when a horse is more than 2/3rds of a football field behind when the race starts. Not having a fair start rule is counterintuitive. Yes, the track and horsemen benefit by not having to refund wagers, but this is offset by permanently losing fans who rightfully feel cheated.
Allow future pool wagering on the Hambletonian and Meadowlands Pace. The Kentucky Derby future pool wagers are popular and the Little Brown Jug has future pool wagering, why can’t two of the premier harness racing events have future pool wagering? It seems like free money to me.
There are times it appears the betting public is inadvertently not being represented at racing commission meetings. Appoint a public advocate to represent fans/gamblers at the NJRC meetings. Allow the public advocate the right to vote at commission meetings.
Legalize proposition bets in New Jersey for special events. For example, on Hambletonian Day, let fans bet on which driver is going to win the most races on the race card or which jockey will win the most races on Haskell Day. Proposition bets will allow newcomers the opportunity to be introduced to horse racing in a non-threatening way.
Support the racetracks in the event they try to cut the takeout rate to stimulate the handle. If other tracks and ADWs seem to be acting in concert to drop the signal of a New Jersey racetrack because they cut the takeout, file/support a federal anti-trust lawsuit against those tracks and ADWs.
Consider less racing. Currently standardbred race meets are so long that fans suffer from fatigue. A change of scenery is good. If unwilling to cut the number of races dates overall in the state, consider the possibility of racing some standardbred dates at Atlantic City Race Course or even Monmouth Park, even if just for 'festival meets'. This would allow horsemen to race as many dates, but allow for 'seasons' to keep fans fresh.
Endorse horse racing by showing up at the track for key events and present the trophy to some stakes winners. While it may not stimulate fan interest, it will show the horsemen that you care.
Thank you for considering my comments and suggestions. I wish you well as you get ready to embark on your term. Here is hoping you will fulfill your commitment to help New Jersey racing prosper.
Regards,
Pacingguy
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