N.J. Racing News

[richard burch]

Whelan: End Casinos' $30M Subsidy Of Horse Tracks
WAYNE PARRY, Associated Press Writer

ATLANTIC CITY, N.J. (AP) ― The bad blood between New Jersey's horse racing tracks and its casinos escalated Tuesday when two state senators who support the casinos proposed ending the $30 million annual subsidy that the casinos provide to help keep the tracks alive.

Sen. James Whelan, a former mayor of Atlantic City, said the subsidy should end, even if it means the end of horse racing in New Jersey.

"That's what happens in a capitalist society," said Whelan, a Democrat from Atlantic County. "If there's no demand for a product, why should we as an industry and as a society feel obligated to prop it up?"

Whelan made his comments during the opening remarks at the East Coast Gaming Congress, a casino industry gathering in Atlantic City.

Later in the day, state Senate President Stephen Sweeney echoed those comments.

"There's a commitment in New jersey not to tear this place apart," Sweeney said. "Race tracks have to be able to stand on their own. The casinos have made an enormous investment here, billions and billions of dollars.

"I don't think casinos should be spending $30 million on horse racing," he said. "They should be spending it on promoting casinos."

In recent years, race tracks and casinos have been fighting each other for a dwindling pot of money from gamblers. The tracks say they can't survive without a subsidy from the nearly $4 billion Atlantic City casino industry, and also want the right to install slot machines at race tracks.

That's something the casinos adamantly oppose, and something Sweeney vowed not to allow a vote on.

Thomas F. Luchento, president of the Standardbred Breeders & Owners Association of New Jersey, blasted Whelan's proposal.

"What they want to do is to try and stomp out the horse racing business," he said. "As soon as we were done for, they'd move right up there. It's clear that if we weren't in their way, they would move in."

He said horse racing is a $1 billion-a-year industry in New Jersey.

"How can you turn down a $1 billion a year?" he asked. "I understand that the average guy in Newark doesn't care whether there is horse racing in New Jersey. But he does care that his property tax goes down."

Luchento said earlier this year that racing's share of state gambling tax revenue in New Jersey has decreased from 81 percent to 1 percent since casinos were first allowed in 1978.

Casinos have subsidized New Jersey's tracks since 2004 to help them provide the same kind of purses now being offered in neighboring states by tracks equipped with racinos, an industry term combining racing and casinos, to describe a race track that has slot machines. The higher purses are needed to attract the best horses and jockeys.

The total amount of the subsidy through 2011 is estimated at $176 million.

The racing industry has about 2,050 employees and generates about $31 million in annual state and local taxes, according to a 2007 study by Rutgers University.

Whelan said he is waiting for the recommendations of a panel appointed by Gov. Chris Christie to study the state's gambling industry. A spokesman for the governor said the report is due at the end of June.

"Until then, legislation aimed at protecting turf seems a bit premature," he said. "Our goal is to come up with a comprehensive approach that considers the future use of all of New Jersey's entertainment assets."