Monmouth Park nears the finish for sports betting launch

By: Tom LaMarra

Updated June 7

 The New Jersey Assembly voted 73-0 to pass the sports betting bill, and the Senate soon after voted to approve it 37-0. Gov. Phil Murphy, meanwhile, in a statement said he needs time to analyze the bill and offered no timeline for signing it.

Posted: June 4, 2018, updated June 5, 2018

Legislation establishing a regulatory framework for sports betting cleared three New Jersey General Assembly committees June 4 and is expected to voted upon by the Senate and Assembly June 8. It remains to be seen, however, whether Gov. Phil Murphy will immediately sign it, according to published reports.

Dennis Drazin, Chief Executive Officer of Darby Development, which operates Monmouth Park on behalf of the New Jersey Thoroughbred Horsemen’s Association, in late May said he’s hopeful sports betting will commence June 8 at the track. He acknowledged the legislature would probably make adjustments, which it did, to bills in the Senate and Assembly.

“New Jersey has the framework in place, but some language in the legislation is in dispute,” Drazin said. “The Senate and Assembly bills are a little different. At the end of the day, it’s about racetracks, casinos and former racetracks.”

Legislation that unanimously passed the Assembly Tourism, Gaming and the Arts Committee; Assembly Appropriations Committee; and Senate Banking and Appropriations Committee sets the state tax for wagers made at casinos and racetracks at 8%; tracks would pay an additional 1.25% for host municipalities and counties. The state tax for online sports bets would be 13%.

The combination bill removed a live racing requirement for Atlantic City Race Course, which closed in January 2015, to offer sports betting. Atlantic City and Garden State Park, which closed in 2001 and is now a residential and retail center, are eligible under the following language, which could prove a challenge given the wording:  “A former track is defined as one “where a horse race meeting was conducted within 15 years prior to the effective date of (the original sports betting law), excluding premises other than the physical location of the racecourse oval and the land contained within such racecourse oval.”

Greenwood Racing, which still owns the Atlantic City property, recently opened a small off-track wagering facility in a room at a Chickie’s and Pete’s restaurant located just southeast of the racetrack. The track is no longer used for simulcasting.

The bill doesn’t specifically directly address sports wagering at racetrack-operated off-track wagering facilities in New Jersey. Darby Development and Monmouth have two OTW facilities in the central part of the state.

Drazin said lawmakers are “leaving room for creativity” when it comes to the type of wagers a facility can offer. “You’ll typically see all the bets you see in Vegas,” he said of the Monmouth operation, will be operated by partner William Hill.

The June 4 legislative hearings were attended by representatives of major league sports who oppose the bill because of integrity concerns and a lack of a structure by which the leagues could receive real-time bet-monitoring data.

“This is not about the leagues receiving a cut of the action,” NBA executive Dan Spillane told the Senate committee. “There is no protection to monitor bets on games. There is no requirement to use official league data. There is no compensation for the value our products create and the risk we are forced to assume.”

MLB executive Brian Seeley expressed similar concerns and went so far as to say the league would “encourage New Jersey bettors to bet in more transparent markets.”

New Jersey lawmakers as well as Monmouth officials have been adamant about not paying fees to the leagues in large part because of the circumstances that led to a long legal battle to win the right to offer sports betting.

“I’ve been very vocal about integrity fees for one good reason: (People) have been betting on sports and nobody needed an integrity fee,” said Senate President Stephen Sweeney, who said sports wagering would be properly regulated and that New Jersey will be a “model” for it.

Lawmakers indicated no desire to hold up passage of the bill, though a few suggested some language could be revisited after sports betting commences.

Drazin said once the bill is signed by the governor, Monmouth will ask the New Jersey Racing Commission for a license and thereafter begin taking bets. A spokesperson for Murphy told media outlets the governor will need time to review the legislation, which started speculation about delays.

The NJTHA recently filed a brief for judgment on injunction bond and damages on the grounds that the NFL, NBA, MLB, NHL, and NCAA for more than 3 1/2 years prevented Monmouth from accepting wagers on sports as a result of the protracted legal case that eventually resulted in the United States Supreme Court overturning the Professional and Amateur Sports Protection Act.

The motion estimates the sports book “win” Monmouth could have had from Oct. 26, 2014, to May 14, 2018—the date of the Supreme Court decision—is $149.9 million.

The NJTHA seeks the leagues’ surety bond of $3.4 million plus interest; a judgment declaring that the leagues acted in bad faith by blocking the NJTHA from taking sports bets at Monmouth; and “accelerated discovery and an evidentiary hearing to determine the damages sustained by the NJTHA over and above the bond amount together with counsel fees and costs of the suit.”

The motion cites the leagues’ involvement with fantasy sports operators and alleges the leagues selectively enforced PASPA.

“Damages should be computed on the basis of both the damages sustained by the NJTHA and profits collected by the leagues from fantasy betting, proliferation of betting on the outcome s of their games, and the leagues’ attempts to share with Nevada monopolistic control over the sports betting market,” the motion states.

“The court has to go through a number of tests to see if there are damages,” Drazin said. “Had we had the money we would have put it into purses for horsemen. They were deprived additional purse money we believe they would have had. The day the injunction was issued it all dried up.”

As for the chances of the NJTHA winning the case, Drazin said he is as confident as he was that the Supreme Court would rule in New Jersey’s favor.

“I’d say our chances are excellent,” he said.

With the advent of sports betting, Drazin said purse increases are projected for 2019. Also in the works is a plan to restore longer fall meets at Meadowlands, with both turf and dirt racing.

“By the time we bring in revenue this year, it will be too late to extend (race meets),” Drazin said. “We’ll save it all and wait for 2019. We want to look at what they’re paying in New York, Maryland, Pennsylvania and Delaware. The goal is to open the stable area in April and try to do more days within the existing calendar.

“We want to have a season where horsemen can come here and have a home. People may want to criticize me, but I’m all for the horsemen.”

(Monmouth Park photo by Tom LaMarra)