Hanson report presents four options for N.J. horse racing

The New Jersey government wants to forbid horse racing venues from installing slot machines, which would allow them to compete with racetracks in surrounding states.

This is just one of the recommendations in a new report issued July 21 by the Governor’s Advisory Commission on New Jersey Gaming, Sports and Entertainment. The report is also referred to as the Hanson Report after Jon Hanson, chairman of the temporary commission that Gov. Chris Christie established to review the state of gaming in New Jersey. Other members of the commission were Debra DiLorenzo, Robert C. Holmes, Esq., Wesley W. Lang Jr., Al Leiter, Robert E. Mulcahy III and Finn Wentworth.

The report favors the Atlantic City casino industry over the state’s horse racing industry, both of which are losing money. The report states that putting slot machines at the Meadowlands Racetrack in East Rutherford has a number of drawbacks, including amending the state Constitution and taking several years to accomplish when time is of the essence for New Jersey racetracks already competing with racinos in Delaware, Pennsylvania and New York.

The New Jersey Sports and Exposition Authority (NJSEA) owns and operates both the Meadowlands Racetrack and Monmouth Park in Oceanport.

“The Meadowlands Racetrack no longer resonates as a viable entertainment option to large segments of the population except on major race days,” the report states. “The NJSEA budget cannot support two losing live race operations. The New Jersey racing industry cannot earn enough purse monies on its own to support two breeds in the state. The New Jersey racing industry cannot compete long-term with the New York and Pennsylvania purse structures or breeders’ incentive programs funded by racino revenues.”

The report states that Monmouth Park, which has near-historic landmark value and provides family entertainment, would benefit from a short “boutique summer meet” with the right purse structure.

The report provides four options for horse racing in the state. The first would eliminate harness racing but create a special fund for awards for standardbred owners and breeders racing out of state. The report calls harness racing “a regional niche sport with limited national media attention.”

The first option suggests converting the front paddock area at the Meadowlands into a 50,000-square-foot off-trackwagering (OTW) parlor and the rest of the paddock space would house NJSEA offices. The report also suggests developing a future use of the Meadowlands for sports, entertainment or other public events. The first option also suggests Monmouth Park have a 50- to 71-day meet, with possibly 10 days of turf racing at the Atlantic City Race Course. The privately owed Freehold Raceway in Freehold would retain its OTW license and the right to build OTW parlors. The New Jersey Thoroughbred Horsemen’s Association would have to drop a contractual requirement for the NJSEA to pay $4.7 million toward purses.

The second option would include the thoroughbred racing change in the first option, and relocating a 70-day standardbred meet from the Meadowlands to Monmouth Park. The report noted that thoroughbred horsemen would have concerns about changing their racing surface. The second option includes paying additional costs to update Monmouth Park for night racing, with an $8 million-$12 million standardbred paddock and with needed winterizing.

The third option suggests leasing the Meadowlands Racetrack to the Standardbred Breeders and Owners of New Jersey (SBOANJ) for $1 a year, with early termination rights and an equity-based share at the Bayonne OTW. The horsemen would be responsible for all operating expenses, and the track’s share of payments in lieu of taxes, currently $2.5 million per year. They would also be responsible for capital improvements, estimated to be $12 million.

The fourth option suggests that private entities buy a standardbred farm in the state and convert it for commercial use with a mile track. Currently, the only such privately owned track is at Gaitway Farm in Manapalan. The report states that the entities could build a 5,000-seat grandstand and necessary amenities, and an OTW constructed at the Meadowlands would help them not lose the standardbred market in northern New Jersey. The report noted that Freehold Raceway, which is in the town adjacent to Manalapan, has a half-mile track and little room for expansion.

The SBOANJ issued a statement in response to the recommendation made in the report.

“We do not want to be dependent on state subsidies,” the SBOANJ response stated. “We want a new gaming model with quality racing and a chance to revitalize our product. Yet the Hanson commission that prepared the report for Gov. Chris Christie was never allowed to consider slots or video lottery terminals at New Jersey’s racetracks. Without alternate gaming as an option, the racing and breeding industry is handcuffed.”

The SBOANJ said it would like to build a new gaming model with slots at tracks as in Pennsylvania, New York, Delaware and other states.

“This is not a speculative solution,” the SBOANJ response stated. “It is a proven business plan that has benefited every state that has introduced racinos and whose governors and legislators have been able to lower taxes with the revenue from gaming.”

T

he SBOANJ also takes issue with the

commission’s failure to discuss the loss of equine operations on thousands of acres when they relocate to other states with a better business climate.

“We do not understand why the state would be willing to spend taxpayer money to protect private companies, such as the casinos in Atlantic City and the investors in Xanadu [retail complex], while at the same time dismissing the racing industry as unimportant,” the SBOANJ response states.

The SBOANJ said it looks forward to Senate President Stephen Sweeney’s gaming summit in August where it hopes “a rational and global plan for all New Jersey gaming will be discussed.”