The horse-racing industry in New Jersey is in jeopardy and cannot continue to be among the leaders in the nation or in fact survive without significant funding for racetrack purses and breeding programs.
Gov. Jon Corzine had promised as early as last summer and throughout the fall to help the horse industry with its fiscal crisis, but now the industry is in its fifth week of 2008 without a supplement or another commitment from the casino industry.
The casino industry has complicated the issue because casinos have essentially supported the racing industry in New Jersey with subsidies totaling more than $80 million over four years. In exchange, the tracks agreed not to pursue the installment of slots machines or video lottery terminals (VLTs). Now that the subsidies have run out, Freehold Raceway in Freehold and the state’s own track, the Meadowlands in East Rutherford, have been forced to lower purses to levels that will not allow them to remain competitive with tracks at surrounding states.
However, had the Legislature not approved the four-year deal with the casino industry to supplement racing purses, both the thoroughbred and standardbred industries would probably not exist today. According to the New Jersey Horse Industry Alliance (NJHIA), the state’s breeding and racing industry has suffered greatly over the past two decades, including the closure of two racetracks. Competition from in-state casinos and the lottery and out-of-state racetracks with casinos on all of New Jersey’s borders has worsened the situation.
Racing advocates in New Jersey say that installing slots or VLTs at the racetracks is crucial to saving the equine industry. They have even proposed sharing slot revenues with Atlantic City’s casinos.
More than 36 racinos, which are racetrack casinos, have opened in 11 states since 1992. In 2006 they brought in $3.6 billion in gross gaming revenues, a 16-percent increase from 2005, according to the American Gaming Association. They also contributed $1.4 billion in state and local taxes in 2006, an increase of 12.5 percent from 2005. More important, the increased revenues from racinos enabled racetracks to increase purses and remain competitive in a shrinking industry.
Any further erosion of racing in this state could have disastrous consequences for New Jersey’s economy because the equine industry, according to the Rutgers Equine Science Center, is valued at $3.5 billion. “New Jersey Equine Industry, 2007: Its Impact on the Economy, Agriculture and Open Space” reports that the state’s equine industry generates $1.1 billion annually, keeps 176,000 acres (about one-fifth of the state’s total acreage) in agriculture, employs 13,000 people and generates an estimated $160 million in annually paid federal, state and local taxes.
The racing subset is an economic driver for the equine industry, and if the lowered purse structure remains, horsemen and horsewomen will ship out in search of purses that will allow them to feed their families and pay their staff a decent wage, the Meadowlands will cancel premier events like the Hambletonian and Breeders Crown, and the state’s farmland and open space will be further threatened.
So, for the average person who may or may not wager at the track or care whether or not the tracks have slots, the edge of the collapse of the state’s horse industry should be a sobering thought because it is a direct threat to New Jersey’s open space. If New Jersey continues to create a negative business environment for the equine industry, the industry will seek to conduct activities in New York, Pennsylvania and elsewhere, and more and more New Jersey land will become developed.
The state must recognize the link between racing and farmland preservation. Residents who see the connection should contact the governor and state legislators and tell them to provide racing and the entire equine industry with a solution for longterm survival.
Whether the solution is installing slots at the racetracks, garnering another subsidy for the racetracks from the casino industry, or finding means to supplement the Sire Stakes and other breeding programs, the state must solve this crisis now, or New Jersey will lose this vital industry along with the economy boost, jobs, farmland and open space that it creates.