Bill authorizing purse supplements passes NJ Senate

By: Tom LaMarra

Updated: Dec. 17, 2018

The New Jersey Senate Dec. 17 approved, on a 40-0 vote, legislation authorizing $100 million in purse supplements for the state’s horseracing industry over a five-year period. The measure, which would provide $10 million a year for purses at Monmouth Park, now heads to the House of Representatives, where it could be taken up in January.

Posted: Dec. 11, 2018

The New Jersey Senate Budget and Appropriations Committee Dec. 10 unanimously approved legislation that would provide purse supplements to the Thoroughbred and Standardbred industries in the state, but it amended the bill to mandate an agreement between racetracks and horsemen’s groups on sports betting.

The bill, introduced months ago, was reported out of the committee by a 13-0 vote.

The bill—sponsored by Sens. Vin Gopal, Paul Sarlo and Steven Oroho, all of central and northern New Jersey, and Sen. Richard Cody, who also represents the northern part of the state—calls for $100 million in purse supplements, $20 million each year over five fiscal years beginning with fiscal 2019, to come from the state’s general fund.

Of the $20 million each year, each breed would get $10 million. So Monmouth Park, which also operates a short all-turf Thoroughbred meet at Meadowlands, would get $10 million for purses; Meadowlands would receive $6 million for harness purses, and Freehold $1.6 million for purses; New Jersey Sire Stakes purses would receive $1.2 million; New Jersey-sired Standardbreds would get $600,000 in purse bonuses; and Standardbred breeder awards would get $600,000.

Purse supplements that ended soon after former governor Gov. Chris Christie took office were derived from payments from Atlantic City casinos in exchange for the racing industry not pursuing casino-style gambling.

During the Dec. 10 hearing, lawmakers noted the horse racing and breeding industry contributes about $1 billion in economic development for New Jersey as well as thousands of jobs as part of a $4 billion equine industry in the state.  They also discussed the launch of sports betting this year, which one legislator said provided a “necessary shot of adrenalin.”

Through October, Monmouth had generated about $7.5 million in revenue before taxes and Meadowlands about $15 million, according to Division of Gaming Enforcement statistics. The numbers include on-track and mobile wagering on sports.

An amendment to the bill offered during the hearing ties receipt of purse supplements to the racetracks and horsemen’s groups having an agreement on sports betting. In the case of Monmouth, that’s probably just a formality; the track is leased by the New Jersey Thoroughbred Horsemen’s Association and operated by Darby Development on behalf of the group, and both parties at the outset said sports betting revenue would be reinvested in the facility and the racing product through higher purses or additional racing dates.

Dennis Drazin, who heads Darby Development, has been working on the reinstatement of purse supplements for at least a year as part of a goal to provide multiple revenue streams for Monmouth and its horsemen.

On Dec. 1, Meadowlands and the Standardbred Owners and Breeders Association of New Jersey announced a deal whereby Meadowlands will dedicate a minimum of $1 million per year to purses for 10 years from sports betting revenue. That came after the track repeatedly indicated it didn’t intend to share the revenue.

Freehold Raceway, which intends to have a sports betting operation, said it supported the bill as written but objected to the amendment regarding a sports betting agreement. Chris McErlean, Vice President of Racing for Penn National Gaming Inc., which owns the harness track in partnership with Greenwood Racing, called the amendment “a solution looking for a problem.”

“We don’t object to the bill as stated—it’s a public policy decision—and Freehold would be a small beneficiary of the purse revenue,” McErlean said. “But the amendment was put in because of issues with one track in the state. This can be negotiated between the racetracks and horsemen, and we want to talk to horsemen about the issues.”

Sarlo, who chairs the Budget and Appropriations Committee, indicated there could be flexibility in an agreement between a track and a horsemen’s group, including one not based on a share of net revenue. He said it’s “important there be some understanding” between tracks and horsemen.

The legislation mandates that recipients of the funds “file an annual report with the New Jersey Racing Commission that documents the purposes for which those funds were used and the amounts allocated for those purposes.” The annual report must include information on the impact on pari-mutuel handle, field size, number of New Jersey-bred runners and state-bred winners, and number of foals and broodmares in the state.

The NJRC would be responsible for making the purse supplement payments.