Gov. withdraws state support for horse racing

Gov. Chris Christie has decided to drain state support from New Jersey’s horse racing and breeding industry to try to give lifeblood to faltering Atlantic City casinos.

Christie gave a press conference at the new Meadowlands Stadium in East Rutherford on July 22, a day after his Advisory Commission on New Jersey Gaming, Sports and Entertainment released its recommendations for revamping state gaming. Immediately after he declared state government support for horse racing dead, he flew to Atlantic City to pledge a state takeover of the casino district.

When Christie organized the temporary advisory committee on gaming earlier this year, he charged it with providing a comprehensive statewide approach to resolving the issues and financial need of the state’s gaming, professional sports and entertainment industries. The commission focused on addressing the ongoing financial viability of the New Jersey Sports and Exposition Authority (NJSEA), advancing or resolving the stalled Xanadu project, improving the competitiveness and promotion of Atlantic City, and ensuring that horse racing becomes self-sustaining.

The recommendations the report made address many aspects of the casino industry and contain some ideas to change and stop subsidizing the horse-racing industry. Christie has called for the privatization of the current state-owned horse-racing venues at the Meadowlands in East Rutherford, Monmouth Park in Oceanport and the Atlantic City Race Course in Mays Landing.

According to Dr. Karyn Malinowski, director of the Rutgers Equine Science Center, the recommendations will not only affect farms and equine-related businesses but jobs, open space, taxes and the state’s economy.

“If the Meadowlands closes, we lose racing in New Jersey and up to 57,000 acres, 7,000 jobs, $115 million in tax revenue and $780 million in annual economic impact to the state,” Malinowski said.

The Rutgers Equine Science Center conducted a study of New Jersey’s equine industry in July 2009, which reported that 42,000 equines are housed at 7,200 facilities throughout the state, with nearly one-third of those horses in racing-related activities. The study valued the estate’s equine industry at $4 billion and said it generates $1.1 billion annually for the New Jersey economy. The study also found the industry responsible for 13,000 jobs and $160 million annually in federal, state and local taxes.

The center’s report found New Jersey’s four racing venues — the Meadowlands, Monmouth Park, Freehold Raceway and Atlantic City Race Course — contribute $502 million to the state’s economy annually. The study further determined that there are 176,000 acres supporting equine facilities with equine-related agriculture, representing more than 20 percent of the state’s total 790,000 acres.

In recent years when the state’s horse and casino industries started tottering financially, they made agreements that included the casinos subsidizing purse supplements at the racetracks in return for keeping slot machines out of those venues. Since 2006,AtlanticCity casinos have lost 31 percent of their gaming revenue to states in the region that have slot machines at their racetracks, according to a New Jersey gaming report issued in 2009. According to that same report, the Meadowlands made $11.3 million in 2006 and lost $10 million in 2009.

Two recent reports by Christiansen Capital Advisors, commissioned by the New Jersey Department of Treasury, recommended the installation of slot machines at the Meadowlands and stated that 5,000 machines at the Meadowlandswould produce $750 million annually and that 10,000 machines would produce $1.5 billion annually. The same study suggested that 2,100 slots at the Meadowlands would reduce Atlantic City gross gaming revenue by .01 percent.

Bob Marks, marketing director of Perretti Farms in Upper Freehold, said losing Meadowlands capitol would negatively impact the standardbred industry and would probably be a death knell for Monmouth County farms.

With regard to the report excluding the future of harness racing in state, Mark Mullen, manager of his family’s Fair Winds Farm in Upper Freehold, said that abandoning harness racing would seriously impact the state’s open space and agriculture.

“Standardbred mares and stallions will move to surrounding states where there are superior racing and breeding programs,” Mullen said. “There will be reduced demand for the hay and straw grown on New Jersey farms and all manner of goods and services required to raise and race healthy horses. It is an impact that will be felt throughout the New Jersey agriculture community.”

He noted that the approximately 600-acre Fair Winds Farm’s expansion and success coincidedwith horse racing at the Meadowlands.

“It is particularly painful that while the gaming and racing commission sought solutions to Xanadu and Atlantic City casinos, our ‘business partner’ for the last 30 some years — the state of New Jersey — … has offered not a single idea and is ready to walk out,” Mullen said. “It is surprising that Gov. Christie, who basically won because of the Monmouth County vote, would turn his back on the residents and businesses of this rural community.”

Mullen said casinos that made major contributions to Christie’s campaign seem to have won while residents seem to have lost “as our money continues to flow into out-of-state gaming venues and the state takeover of Xanadu and Atlantic City will cost taxpayers more millions of dollars.”

Upper Freehold’s Elaine McMinn, who owns and operates Briarwood Saddlery at Monmouth Park, said converting Monmouth Park into any other type of venue would be costly.

“Not only would it be costly to convert the track surface but Monmouth has been traditionally a thoroughbred racetrack for decades and any change of that nature is unthinkable,” she said.

McMinn said if Christie would allow Monmouth Park to install slot machines, it could compete with racetracks in surrounding states, bring in more revenue and could attract the interest of an outside purchaser.

“It certainly could be run more efficiently than it is currently and the economy of the surrounding towns would flourish,” she said. “No state-run facility can compare to the pride of personal ownership, and if Monmouth could compete with neighboring state facilities, I believe there could be a complete turn around.”

Dr. Scott Palmer, owner of the New Jersey Equine Clinic in Millstone, said the advisory commission on gaming commission did not bring a balanced view to the table.

“I am concerned that the political agenda behind the scenes has biased the presentation,” Palmer said, noting the new report’s about-face from the conclusion of the state treasury’s earlier reports that recommended slot machines at the Meadowlands.

“It leads one to suspect that the conclusions were drawn long before the work of the commission was done,” Palmer said.

Palmer said the new commission refers to New Jersey horse racing as a dying industry, but the state has never tried removing the gaming restrictions at racetracks that would allow New Jersey racing to compete with neighboring states.

“The governor’s speech … was broad in scope and lean on the details, and the devil, as they say, is always in the details,” he said.

Palmer said it frustrates him that the racing and casino industries will not work together to generate revenue for the state while providing for the long-term security of a consolidated New Jersey gaming industry.

“It seems obvious that this is no longer an issue of the Meadowlands versus Atlantic City,” he said. “It is rather an issue of New Jersey versus neighboring states who are politically capable, at least in some cases, of moving forward to capitalize on this opportunity.”

Millstone Mayor Nancy Grbelja, who worked with Monmouth County and state officials on the Save the Horse Committee to lobby for state support of the equine industry, said the authors of the report “spit on” every individual involved in the harness-racing industry. She urged residents to let the governor and state officials know how important racing is to the area, and suggested a boycott of Atlantic City.

She said she hoped the report was not a quid pro quo between Christie and Senate President Stephen Sweeney to enable the governor to get his proposed 2 percent tax cap. Sweeney has fiercely objected to the expansion of gaming outside of Atlantic City.

Leading advocates for the equine and horse-racing industry — Sens. Jennifer Beck (District 12) and Richard Codey (District 27) and a host of Meadowlands-area representatives will take to legislative debate over the issue. Next month, Democrats in the Legislature plan will host a gaming summit co-directed by Sen. Jim Whelan (District 2) and Assemblyman John Burzichelli (District 3), according to the New Jersey Farm Bureau.