New Jersey gambling interests at odds over how to compete
Published on 7/9/2009
Oceanport, N.J. - New Jersey's horse racing and casino gambling industries still have a long way to go in developing a collaborative strategy to meet the competitive challenges emerging in neighboring states.
Representatives of the longtime rival industries couldn't even agree on what to discuss Wednesday at a meeting of a new commission charged with saving the state's four horse racing tracks.
Track officials wanted to talk about “racinos,” the electronic betting parlors that have been introduced at 36 race tracks in 15 states since 1995. However, Joseph Fusco, a spokesman for the Casino Association of New Jersey, spoke for 20 minutes at the meeting without even mentioning the word.
Racinos are now operating in neighboring states, but they're still barred in New Jersey out of deference to the powerful Atlantic City casinos, which have seen their revenue shrink amid the national recession. Racing interests are afraid they're losing valuable time by not joining the trend.
Fusco, an executive vice president at Trump Entertainment Resorts, drew a testy response from racing industry representatives at the end of his prepared testimony by suggesting they focus on improvements “horse racing can generate from its own business.”
Thomas F. Luchento, president of the Standardbred Breeders & Owners Association of New Jersey, said the casinos should fix their own problems instead of meddling in racing.
”Our decline is directly related with casinos and lotteries,” Luchento said, noting that racing's share of state gambling tax revenue has decreased from 81 percent to 1 percent since casinos were first allowed in 1978.
Casinos have subsidized New Jersey's tracks since 2004 to help them provide the same kind of purses now being offered by racino-equipped tracks in neighboring states. The higher purses are needed to attract the best horses and jockeys. The total amount of the subsidy through 2011 is estimated at $176 million.
However, Chris Scherf, executive vice president of The National Thoroughbred Racing Association, said subsidies don't address the need to upgrade New Jersey's stagnant tracks to compete with the new facilities. Electronic gaming would help pay for those improvements, he said.
The number of racinos in the United States has grown from four to 36 since the trend began in 1995 and is expected to top 45 by 2015.
”It's not horse racing versus casinos,” state Sen. Jennifer Beck, of Red Bank, reminded members at Wednesday's meeting of the Governor's Commission on the Horse Racing Industry. “It's New Jersey versus Pennsylvania, Maryland, Delaware and New York.”
Ernie D'Ambrosio, a gambling consultant with The Innovation Group, said it's a tough time for racing to push changes on the state's casino industry, which employs 43,000 workers and generates about $1 billion in annual state taxes. Revenue at the 11 casinos in Atlantic City fell 16 percent to $1.62 billion during the first five months of this year from the same period of 2008.
The racing industry has about 2,050 employees and generates about $31 million in annual state and local taxes, according to a 2007 study by Rutgers University.
”It's an election year and Atlantic City is fragile right now,” D'Ambrosio said. “So, New Jersey is playing a waiting game.”
EDITORIAL FOOTNOTE: This story is another example of horse race tracks not making money. Why would you save something that makes $31 million annually, to something that makes over $1 Billion a year.
The real money is in the casinos, not in the horse tracks. The MTGA (the Mohegan Tribal Gaming Authority) should know this better than anyone, don't we own a racino, called Mohegan Sun at Pocono Downs, in Pennsylvania?
The way I see it, it doesn't make money either. Another bad, bad, bad business deal by the MTGA? Didn't four of the five (4 of 5) Tribal Councilors who are running for re-election vote for the building of the permanent facility?
The four (4) Tribal Councilors were: Bruce "Two Dogs" Bozsum, Lynn Malerba, Bill Quidgeon and James Gessner.
The one Tribal Councilor who is running for re-election who voted against building the permanent facility was Mark Hamilton.
Remember this at election time. Think about what is happening in New Jersey, and what could eventually happen in the Pennsylvania. What do you think?