Horse racing and casinos in New Jersey: Perfect Together

In response to the “Hanson Report,” the New Jersey Legislature has initiated a series of public hearings on how the State of New Jersey should restructure New Jersey’s gaming industry.  Unfortunately, many people perceive that Governor Christie has chosen to go “all in” to save Atlantic City and its casinos, while folding his cards on New Jersey’s horse racing industry.  

 As a breeder of standardbred horses in the State of New Jersey I do not share that view.  I believe Governor Christie has the interests of both industries in focus, and has put forth the Hanson Report to begin a public debate about what should be done to restructure New Jersey’s Gaming industry.   

Governor Christie, the New Jersey Legislature, Atlantic City and New Jersey’s horse racing industry must use this opportunity to work together to ensure that both industries restructure, improve operations, enhance revenues, and strengthen their positions as economic engines of the State of New Jersey.

 

This is not about Atlantic City casinos versus New Jersey’s horse racing industries.  This is not about North Jersey versus South Jersey.  This is about restructuring and growing two industries that are vital to our economy.  With increased regional competition from Pennsylvania and New York, New Jersey must change the strategies and tactics of the entire gaming industry.  If we fail to make those changes, the considerable competition from Pennsylvania, Delaware, Connecticut and New York will continue to drive revenues and jobs out of the State of New Jersey.

 

The Hanson Report and the Legislature’s public hearing process has presented an opportunity to take a step back to rethink how these industries operate and develop a plan that strengthens both industries.  Politicizing the Hanson Report, the Legislature’s public hearing process, and pitting casinos versus the horse racing is both unproductive and unacceptable.   

 

 With respect to what changes can and should be made to New Jersey’s horse racing industry, I offer Governor Christie and the Legislature the following recommendations:

 

First, privatize Meadowlands Race Track during calendar year 2011.  New Jersey’s horse racing industry is committed to working in partnership with the Governor Christie and the Legislature to make this a reality by the end of 2011.

 

Second, rebrand and restructure the Meadowlands Race Track.  Through a comprehensive rebranding and restructuring effort, Governor Christie and the Legislature must focus on empowering the horse racing industry to enhance New Jersey’s equine product.  Through the creation of “elite meets” at the Meadowlands, and by reducing the number of racing days at the Meadowlands, we would be enhancing the quality of the horse racing at the Meadowlands and increasing the size of the purses.

 

As part of this restructuring, we must also develop a comprehensive marketing strategy that includes new entertainment options at the Meadowlands.  All efforts must be made to optimize this valuable New Jersey asset for today’s market.  At the same time, all “off track” revenue opportunities must be maximized to fund operating expenses.  Modernizing the Meadowlands with new tenants will draw new users.

 

Third, introduce a competitive breeding development program in the State of New Jersey.     A competitive breeding program will help retain our horses and grow the breeding industry in New Jersey. A breeding program that could compete with our neighbors’, such as Pennsylvania, who’s program is 50 times as large as New Jersey’s. The fact of the matter is New Jersey is a horse state: the horse is, in fact, the New Jersey State Animal……..let’s keep it that way, and lets put New Jersey on the map as the premier producer of “equine product” in the United States.  The breeding infrastructure exists, and everything must be done to take advantage of, and leverage that infrastructure.

 

Finally, we need to develop a significantly improved New Jersey-bred racing program.  Consistent with improving the State’s equine product, imagine New Jersey horse races, restricted to New Jersey sired and bred horses.  Stated simply, take full advantage of New Jersey’s breeding infrastructure and marry that infrastructure with New Jersey’s racing infrastructure.  Together, they cannot and will not lose.  This will not only enhance the value of New Jersey horses and New Jersey races, it will create new jobs and new tax revenues. 

 

The State of New Jersey estimates that the horse racing industry currently operates at an annual deficit of $20 million.  The reality is there are numerous financing options that can and will transform this annual deficit into an annual surplus of $20 million.  I urge Governor Christie and the Legislature to consider the following:

  

First, increase “Signal Service” charges for the simulcasting signal fed from the Meadowlands to outside markets.  A small increase in the fee would generate significant revenue.

 

Second, activate eight (8) dormant Off Track Wagering (“OTW) licenses. Those licenses should be activated, with percentages of revenue derived from the facilities dedicated to supporting New Jersey horse racing.

 

Third, introduce “Elite Meets” to the Meadowlands to increase the quality of the races.  The successes at Monmouth Race Track have taught us that higher quality racing equals enhanced revenue. Monmouth’s Elite Meet brought a 120% increase in amounts wagered and a 20% increase in attendance.

 

Fourth, introduce Internet Gaming in the State of New Jersey.  Senator Ray Lesniak (D – Elizabeth) is absolutely correct when he advocates for the introduction of internet gaming in New Jersey. 

 

Fifth, introduce “Instant Racing” or “Virtual Pari-mutuel Betting” in the State of New Jersey.  Instant Racing has proven to be a success in Arkansas, generating $22 Million annual revenue to horse racing purses.  The State of New Jersey should look at the Arkansas model closely.

 

New Jersey’s gaming and horse racing industries can, and must, survive in an increasingly competitive market.  The State of New Jersey, and all of our fellow citizens, have a significant stake in the outcome.  We ask that the public and the key decision-makers consider our realistic roadmap to the New Jersey “Win-Win.”

Mike Gulota is a horsebreeder and CEO of De Volente Farms in Flemington

Horse racing and casinos in New Jersey: Perfect Together