Bills regarding racetrack contracts, hedge fund contributions advance

TRENTON – The Assembly Regulatory Oversight and Gaming Committee released four bills Monday dealing with racetrack contracts, political contributions by hedge funds, and casino debt.

A3492:  This bill, sponsored by Assembly members  Ruben Ramos Jr. and Ralph Caputo, would subject a hedge or private equity fund that invests in a casino to the same limitations on making political contributions that apply under existing law to holders of a casino license. 

It would also provide that the Treasury Department’s Division of Investment will not invest public funds in any hedge or private equity fund that has made a political contribution that would make a business entity ineligible to enter into a contract or agreement with the state.

A hedge fund or private equity fund in which the  state invests public funds would be subject to all of the restrictions on political contributions applicable to a business entity that contracts with the state pursuant to that act.

Caputo said it’s an effort to be more transparent.

Committee member John Amodeo, whose district includes the casinos in Atlantic City, questioned the necessity of such a bill and whether the Division of Gaming Enforcement already wouldn’t be investigating such matters.

Caputo said no one is being accused of anything, but that the public has a right to know who these investors are and to a level playing field.

The bill advanced 4-1 with Amodeo opposing.

A3489: This bill, sponsored by Assembly members Ronald Dancer, John Burzichelli, Connie Wagner and Ralph Caputo, would allow harness racing permit holders and the Standardbred Breeders’ and Owners’ Association of New Jersey to enter into contracts to provide that a portion of purse monies that are statutorily dedicated to the permit holder or the association may be spent on advancing the overall economic well-being of the state’s standardbred horse racing and breeding industry in order to maintain self-sustainability. 

Such contracts would not be permitted to reduce the statutorily dedicated funds for programs designed to aid the horsemen and the Standardbred Breeders’ and Owners’ Association or for the administration of a health benefits program for the horsemen.

Dancer said that a year and a half ago the state OK’d private operation of racetracks at the Meadowlands. “It’s in their best interests to have flexibility’’ in this new era, he said.

He said that roughly, 18 percent exists to be divided among the track operators and the horsemens association, and this bill will help them in their quest to guarantee dividends and profits.

It passed unanimously.

A3493: This bill, sponsored by Assembly members  Ruben Ramos Jr. and Ralph Caputo, reduces, from $150 million to less than $75 million, the amount of a casino’s full outstanding debt issue that would exempt a casino institutional investor from the requirement to maintain his or her qualifications.

The bill was released 4-1 with Amodeo in opposition.

A3494: This bill, sponsored by Assembly members Ruben Ramos Jr. and Ralph Caputo, caps at 35 percent the share of the state public employee pension and annuity funds portfolio that may be invested in alternative assets.

The bill recognizes the importance of diversifying pension and annuity funds holdings and that alternative assets are an integral part of an effective diversification strategy. 

Nonetheless, the sponsors believe that alternative assets make for “thorny” placements of public funds, as their investment strategies and specific investments tend to be protected information. 

This may open the door to manipulation and pay-to-play abuses, according to the sponsors.  In establishing an alternative investment ceiling, the bill seeks to limit the appearance of impropriety of the state’s pension fund investment process.

Amodeo said the state investment council caps at 38 percent, and Caputo acknowledged that they are not that far apart, but this is a move in the right direction and to relieve public concerns. Ramos said this offers “a little more comfort” in terms of investments down the road, and it can be revisited at some point.

The vote was 4-1 with Amodeo voting no.

  Bills regarding racetrack contracts, hedge fund contributions advance