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Thursday, July 1, 2010

Racing On Hold; Exchange Wagering Coming?

New Jersey racing is on hold for another month as Governor Chris Christie’s commission on Sports, Entertainment, and Gaming has asked for a one month delay to complete their report. The new target date for submitting the report is August 1. No reason for the delay was made public; there is some speculation the delay has been requested to see if the neighboring Xanadu (a glorified shopping center) project is resurrected.

One thing is certain, report or not. There will be no VLTs at the Meadowlands in 2011. In order for a referendum to be on the November ballot, a bill to authorize the referendum would need to be passed by July 7 and there has been no action on such legislation. With this report now not being delivered to the Governor before August 1, it allows little time for action. As of today, there is no purse supplement in 2011; purses will be derived solely from wagering revenue. With the state pleading poverty, it is unlikely the Christie Administration will be willing to provide funding for a purse supplement in 2011. As for Atlantic City casinos willing to offer a subsidy for 2011, I wouldn’t count on it as the horse racing industry has now begun a full court press for slot machines.

Next year’s Meadowlands meet will likely look quite a bit different from meets in the past. There is no way the Meadowlands will be able to support the current purse structure next year while racing as many dates as it currently does. While the exact configuration of the 2011 meet will depend on the Sports, Entertainment, and Gaming Committee report, there is a good chance we will see a combination of reduction in racing dates, cutback in the stakes program, and purse cuts. The question is how deep the reductions be.

Some good news did come out in New Jersey regarding racing. The State Assembly has approved a bill which will allow the NJSEA to offer exchange wagering or appoint someone to run exchange wagering for them. In theory, exchange wagering will be limited to NJ residents; however a provision of the bill will allow wagers to be matched against wagers made out of state in exchange wagering. Clearly, if this bill is approved by the State Senate it will allow the NJSEA to contract with Betfair to run the exchange for them. If New Jersey implements exchange wagering and it turns out to be successful, expect other states to quickly follow.

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