New Jersey Casinos Agree to Pay Horsetracks
With friends like Governor Jon Corzine, why would New Jersey horsetracks need enemies? Monday, Corzine announced an agreement under which Atlantic City casinos would contribute $90 million over three years to state tracks, but video lottery games would still be illegal at the racing venues.
The payout is an increase over the previous arrangement, a four-year plan under which the casinos paid $86 million. However, a state study last year indicated New Jersey could make over $400 million annually by installing the video poker, blackjack, and slots formats at racing establishments.
Corzine sided with the casinos, which have felt the impact of slots and video gaming at tracks in nearby neighboring states. New Jersey tracks argue they need video gambling to compete with the tracks in Pennsylvania and other states that allow them.
"Both the equine industry and the casino industry play important roles in New Jersey, from preserving open space to attracting visitors, and it was essential to strike a balance that will allow both industries to thrive," Corzine said.
New Jersey horse racing has declined in recent years. One study showed a 25% dropoff from 1999 to 2006 in racing revenue. State legislators have been split, with lawmakers from the northern portion of the state favoring protecting racing at the Meadowlands, and those from the south looking to Atlantic City's interest.
It is probably unreasonable for Atlantic City to continue to ask for this protection much longer. Unless the casinos are willing to make up a much larger share of what the tracks lose without video lotteries, the end result is mainly putting the tracks at a huge competitive disadvantage against other racing sites. The casinos will still continue to lose business to the out-of-state tracks until they distinguish themselves as offering a completely different package and experience, something the transformation to a resort destination town will do.
