The Meadowlands Racetrack may be the top track in the sport, but with neighbouring states enjoying good days brought on by either VLTs (video lottery terminals) or slot machines, can the Meadowlands sustain its place at the top of the mountain without alternative gaming?
That answer depends on whom you ask.
For the last four years, the New Jersey racing industry has stayed strong thanks to an $86 million ($21.5 million per year) subsidy from the Casino Reinvestment Development Authority. With that agreement having expired on December 31 of last year, things have been a little tense in the Garden State, as the powers that be in the state capital of Trenton work to hammer out a new deal.
But now it does appear that a new three-year, $90 million ($30 million per year) subsidy should be in place soon. This time the subsidy will come directly from the casinos.
Ron Dancer, son of Hall of Famer Stanley Dancer, has been a member of the New Jersey State Assembly since 2002 and is on the Assembly Gaming and Tourism Committee, which receives all of the racing-related legislation in the state.
“The bill provides comp credits for slot machines at the casinos, which in essence will provide this tax credit for the casinos to recover their $90 million commitment to the racing industry,” said Dancer. “But we are working, and there is bipartisan support, on this long-term vision where we will have a plan of action to - and this is key - provide to the racing industry a stable, sustainable source of long-term funding for purses. We’re not going to go through these stop-gap, short-term, band-aid measures again and there’s bipartisan support in the senate and the assembly for that.
“The $21.5 million a year, with the increased competition that we’re facing with purse levels in New York, Pennsylvania and Delaware wasn’t sufficient, so we needed to provide for New Jersey to bring New Jersey back to a premier state that can offer the best in harness racing and bolster the purses, as well for thoroughbred racing, to retain that status.”
Tom Luchento, president of the Standardbred Breeders & Owners Association of New Jersey, is appreciative of what the lawmakers have done, but feels that the future should involve slots at the tracks.
“[Gov. Jon Corzine] did what he promised to do. He helped us,” said Luchento. “We thought it would be a little bit more, but he did live up to it. It was long and it was hard and frustrating, but he did live up to it and for that, I thank him. I still think he needs to think out of the box a little more, but I don’t think that’s going to happen. He’s made up his mind that it would be bad for Atlantic City to have slot machines anywhere else in the state. And that’s his position.”
Dennis Dowd, Meadowlands senior vice president of racing, agrees with Luchento that VLTs at the Meadowlands is something he’d like to see.
“I’ve made my personal opinion vocal and that is I think VLTs are in fact not the answer, but an answer, and one that we need,” said Dowd. “I think if we had them at the Meadowlands we could fund this industry for a long time and kind of reinvent it and use that money in creative ways to keep racing where it should be for the next 50 years. But that's a decision that's going to be made at a different level.”
Just as with the four-year deal, this new three-year agreement bans slots from being operational at the racetracks during the three-year time period. But that doesn’t stop those wanting slots from planning.
“Ten thousand machines at the Meadowlands, according to our numbers, could bring in approximately $2 billion for the state,” said Luchento. “The bottom line is this: we have to continue looking in the direction of getting slot machines operational, not to wait three years and then start the process that would take another three years. We can’t do that. We can’t go through what we went through this past year and a half just to get a supplement. The casinos, I think, know that ultimately they’re going to have to give in on this.”
It is also not lost on Luchento that Harrah’s operates a casino in New Jersey as well as Harrah’s Chester racino in Pennsylvania.
“You take Harrah’s, who takes our money here in New Jersey and goes across the water and builds another casino. So they’re cannibalizing themselves. That’s okay. That’s 15 minutes away. But we can’t have one 90 miles away at the Meadowlands? It’s somewhat hypocritical,” said Luchento.
Assemblyman Dancer believes that by the casino and horse racing industries working together it’s a win-win situation for the state of New Jersey.
“In New Jersey, we are unique in the sense that we have two very successful and significant industries in both the casino and the racing industry,” said Dancer. “And we in the legislature do have a responsibility to insure the preservation and the enhancement of both industries for the long term. It’s important that the success of either one of these industries not be at the expense of the other. To ensure that one’s success is not at the expense of the other, we need to have this long-term vision that is going to be mutually beneficial to both the casino industry and the racing industry and we believe that’s doable.”
Luchento’s view of the casinos is slightly different than Dancer’s.
“We don’t want their handouts. We don’t need their handouts. Just give us a level playing field. Just give us the opportunity to have what they have,” said Luchento. “They have racing. They simulcast, but we don’t have slots. They’ve got all the games and they only want to keep us to one. How can you fight that? You can’t fight that.”
“Racing cannot stand on its own anymore. What’s happened with all the alternative gambling, such as the casinos and the lotteries, they have forced us into a position to have gaming. We’re in the gaming business, too, now, but the problem is we only have one game. We can’t play with one game. We need more games like everybody else. If you took all the games out and only had one game to play in Atlantic City, how well do you think they would do? Take the casinos out, take the lotteries out, and racing in New Jersey would flourish again, but that can’t happen with the competition. So who are we fooling by not putting the slot machines here?”
So while the deals were being made did the Meadowlands sustain any hits to its daily operation?
Tad Stockman, who has been director of racing at the Meadowlands since 2001, thinks the Meadowlands has maintained its status due in large part to the commitment of the New Jersey Sports and Exposition Authority.
“The main thing we all have to remember is money drives our industry, and as long as we have the money and as long as we still pay out the highest purses we’re still going to be the number one track,” said Stockman. “I have to commend the board of the Sports and Exposition Authority for coming right out and saying ‘no we’re not going to cut our purses, which would have had a devastating effect on the horse population’, but they came out and they backed us.”
“I think all the racetracks with the influx of additional monies affect us. Whether it’s Yonkers or Pocono or Chester, with more money out there it’s a great time to be a horse owner or a horse trainer. It’s a tough time to be a track administrator, because there’s a finite group of horses to go around and they’re opening up new tracks so it spreads the horseflesh thin. We’re very product-sensitive here, because we pay out more money than any place and we’d like to think the horses we have racing here deserve to get that money.”
As a track administrator, Dowd can relate to what Stockman is saying.
“The problem in operating a racetrack is: a) getting your purse money, and, b) distributing it,” said Dowd. “When you have a glut of purse money you have to find innovative ways to get rid of it, and I do see other tracks developing strong stakes programs over the next few years.”
Stockman is also aware that there is a price you pay by being the best.
“Sometimes we become a victim of our own success,” said Stockman. “The racing is so competitive, we go for so much money they race these horses on their tip toes every week and after a while they need some relief. They can now go to Yonkers or Pocono or Chester, race on a smaller track, don’t go quite as fast and go for just a little bit less money than we go for here. Where in the past, if you wanted to make money you had to race good horses here. Now there are three or four outlets for them.”
The three-year agreement does not preclude implementing slots at New Jersey OTW (Off Track Wagering) parlours. In 2001, legislation was signed legalizing a total of 15 parlours to be split between the owners of New Jersey’s four racetracks. The NJSEA, which owns the Meadowlands and Monmouth Park, are entitled to nine. Pennwood Racing Inc., which owns Freehold Raceway, can have four, and Greenwood Racing Inc., which owns Atlantic City Race Course, can have two. New Jersey currently has two operational OTWs, one owned by Greenwood and the other by the NJSEA.
But going to an OTW isn’t the same as going to the track and indeed the posh parlours could take away even more patrons from the racetracks.
“If they were to have the slot machines, not at the OTWs, but at the racetracks, they would way more than hold their own,” said Luchento. “But if you’re going to keep putting OTW parlours up and you’re not going to allow us to have slot machines at the racetracks, of course we’re going to lose. We can’t win that battle.”
So what’s the bottom line when it comes to the future of the Meadowlands? And if you consider all of the construction going on at the sports complex, such as for the new Giants Stadium and a rail line, will the track take a backseat or get lost in the shuffle?
“The Meadowlands should always be number one,” said Luchento. “It always was and it should be number one. Is there a worry? Yeah. If we don’t get what we need, certainly we won’t be on top forever.”
“Foxboro Stadium went up and suddenly the racetrack was an afterthought and suddenly people felt it was more valuable as a parking lot than a racetrack,” said Dowd. “That’s a scary thought. But do I see that happening at the Meadowlands? No. I see a commitment, and again, this piece of legislation, I think it’s a little late and I wish it was different, but the one thing that this piece of legislation says loud and clear is racing is important to the state of New Jersey. So if it says that, and I believe it does say that, then it’s got to say that the Meadowlands is important as a racing facility.
“We’re still quality. You go to the races on a Friday or a Saturday night and even some of the weeknights and you still get a thrill. It is the best. The quality of the racing, my hat’s off to our race office and all the trackmen and everybody that put the show on. I go there and my heart skips a beat.”