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Thursday, September 30, 2010

Gaming Summit - The Good and the Bad

The final session of the New Jersey Gaming Summit was held at Monmouth Park yesterday and for the most part, the conversation was favorable for horse racing.  While the legislators did not pummel
Jon Hanson, it was clear by the end of his testimony the analysis performed for the Hanson Report was simplistic; working off one view and not looking at alternatives.  When legislation is proposed by the Democratic members of the summit committee, racing can expect legislation sympathetic to its cause.

One concept which appeared to be well received was the idea of a bridge supplement.  One that might start with $50 million (for both breeds) and decrease each  year as other revenue streams such as a built out OTW network, exchange wagering, Internet wagering come on line.  Here are some of the ideas which were floated and seemed to get a warm reception.
  • Open up NJAW.  Right now, it is only available to New Jersey residents in New Jersey.  If possible, the legislators would like to open it up so a New Jersey resident traveling out of New Jersey would still be able to use it.  There may be a possibility that NJAW would be opened up to non-residents.
  • Build out the OTW network with the horsemen groups purchasing equity positions in the NJSEA OTWs.  The NJSEA would own 60%, with standardbred and thoroughbred interests each owning 20%.  They still need to address the home rule issue which allows towns to veto the building of an OTW in their town for no reason at all.  Perhaps being able to offer a small percentage of the revenue to hosting towns may suddenly make an OTW desirable where previously rejected.
  • Christie's idea to allow the NJSEA operate OTWs without operating a race meet is a non-starter.  The legislators are committed to OTWs supporting live racing.
  • Offer Internet gaming to New Jersey residents.  Games such as poker could be played with a percentage of the revenue going to the racetracks. 
There is only one problem, a big problem.  The need to get Republicans and Governor Christie on board.  While the Democrats can pass legislation, they will need Republican support to override any veto by Governor Christie.  So far in the current legislative session, the Republicans have been united in supporting the Governor's position and there is no reason to believe they will break ranks now.  While the Governor has stated he is willing to listen to plans to save racing, there are signs he is still looking to get the state out of racing.

During Hanson's testimony in front of the committee, he indicated he has been looking in Bergen County for a site for a smaller racetrack to be built and operated by a private group to replace the Meadowlands.  It was latter learned that the site he was talking about is a former garbage dump southwest of the current track location known as Encap, the site of a failed development plan; an area with poor access and away from the current Meadowlands Sports Complex (click here for a map) where slot machines will end up within five to ten years.  As Tom Luchento (President of the SBOANJ) said, the site is no good as it puts a racetrack in the 'boondocks' and possibly away from the site of a potential revenue source.

Yes, Hanson is a real estate developer, but I find it hard to believe he would actively be looking for another site for racing without the blessing of Governor Christie.  This would suggest Christie is still looking to close the Meadowlands Racetrack and get the state out of the racing business.    

This suggests the possibility of a battle between the Governor and the State Legislature.  While there will be racing at the Meadowlands next year, money to subsidize purses may not be forthcoming; at least initially.  The future of horse racing in New Jersey may come down to a battle of wills. 

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