Bill authorizing track-based Internet gaming clears NJ committee - Thoroughbred Horsemen's Association

Bill authorizing track-based Internet gaming clears NJ committee

By: Tom LaMarra

Posted: Dec. 8, 2016

Legislation that would permit New Jersey racetracks to serve as outlets for casino-operated Internet gaming passed the Assembly Tourism, Gaming and the Arts Committee Dec. 5, but its chances in the full Assembly remain unclear.

The bill, which passed the committee by a 4-3 vote, comes on the heels of the strong defeat of a constitutional amendment to authorize two full-scale casinos in northern New Jersey. The earliest a similar measure can appear on the ballot is 2018.

The legislation sponsored by Assemblymen Ralph Caputo and Ron Dancer simply states that racetracks would be allowed to place wagers at Atlantic City casinos via the Internet. New Jersey is one of a handful of states that permits casinos to offer games online to in-state residents.

The measure states that “a casino, or its Internet gaming affiliate, shall compensate a racetrack licensee for its services provided in the terms of the agreement.” Based on the general language in the bill, it appears all three operating tracks in the state—Monmouth Park, Meadowlands, and Freehold Raceway—would be eligible to establish Internet gaming areas.

The racetracks have been seeking alternative forms of revenue for years given intense competition from neighboring states in which tracks have casinos that produce revenue for purses and breed development programs.

According to a report at politico.com, which covers New Jersey government, Monmouth Park adviser Dennis Drazin told the Assembly committee the racetracks would lease floor space to the casinos in “upscale” designated areas. Monmouth is leased by the New Jersey Thoroughbred Horsemen’s Association, which contracts with Darby Development for operations support.

The politico.com report indicated some lawmakers questioned the simplicity of the bill’s language and suggested it could lead to a major gambling expansion. Meanwhile, legislation to authorize video lottery terminals at New Jersey racetracks already has been introduced in the state legislature.

Caputo has said he believes a constitutional amendment isn’t necessary for VLTs based on a 1982 opinion from the state Attorney General’s office. The following year, however, the governor issued a rule that prevented the New Jersey Lottery from offering video gaming.

Current VLT legislation would reserve 18% of proceeds for the horseracing industry in the state. Of that amount, Thoroughbred racing would get 41.7% for purses and 8.3% for breed development, while Standardbred racing would get 41.7% for purses and 8.3% for its sire stakes program.

(Photo courtesy of Monmouth Park)