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Friday, February 19, 2010

Winning the Battle in New Jersey, Losing the War?

Some people have been wondering why I have not discussed New Jersey Governor Chris Christie's recent statements which have provided wiggle room regarding his previous position of no VLTs at the Meadowlands. The reason I have not discussed this possibility is simple. It is not going to happen. Even if Governor Christie were to come out for VLTs, the bill will never see the light of day. Why? The Senate President, Democrat Stephen Sweeney has stated he will not post a bill permitting slot machines outside of Atlantic City. Sweeney also indicated his belief that the casino industry should not subsidize racing.

In hindsight, one must wonder if horse racing made a mistake in supporting Governor Christie for election instead of then Governor Corzine. If the election for Governor was done in a vacuum, the choice to support Christie may have been correct; I myself believe Governor Christie does want a strong racing industry, albeit 'self sustaining'. The problem is the gubernatorial election was not done in a vacuum. If Corzine had won, the legislative leadership would likely have remained intact. With the Democratic defeat at the polls, it induced a coup in the legislature leadership. The Democrats unseated a friend of racing (Richard Cody) as Senate President and replaced him with a staunch opponent of racing, Stephen Sweeney. For those who were looking for VLTs to come to the Meadowlands, could it be by winning the battle, they lost the war?


Anonymous said...

Horse racers have to stop thinking VLTs are the answer to their problems.

This is good news. It will create innovation into solving the problem instead of another band-aid.

Scott Jeffreys said...

Readers of this blog need to rewind to 1984 when Roosevelt Raceway was sold under the guise of the Hempstead IDA Bonds. Within four years, the track was closed forever, a fact that no-one could have foreseen at the point of the sale.

Roll forward to 2010. The Meadowlands is staring down the throat of the same fate. Think about this : without purse subsidies in 2011, what do you think the racing schedule will look like? What stock would return in 2012? The Meadowlands could possibly be done in just three years from now.

Survival of both the Meadowlands and Monmouth on the Jersey racing landscape depends on two things. The first is guaranteed short term funding over the next two years to provide financial continuity of their business as it currently exists. This is not for the good of harness racing, but to give time for the needed transformation to move the track to the private sector. The days of state based ownership (like NYRA) are just plain over.

The Magna "racing conglomerate" experiment was a failure. The Western "OTB" track ownership has been a legal disaster. Maybe the only answer is to find a buyer who understands the gambling game as it currently exists, has a wagering platform, and the willingness to make the bet.

The only players that come to mind are Jeff Gural (Tioga/Vernon) and the other is a corporate move into racetrack ownership by Betfair/TVG.

Pacingguy said...

Scott, you are correct. The racing assets of the NJSEA may very well be privatized.

However, the new owner does not need to have an existing wagering platform. I have argued that a consortium of tracks can establish their own non-profit ADW to fund their racing operations. This will allow them to get more money for wagers made via account wagering and allow them to lower the onerous takeout rates we currently have.