GamblingCompliance: New Jersey Tracks Eye Historical Racing As Revenue Boost

 

Horseracing in New Jersey has fallen on hard times, and to help boost revenues, purses and attendance at the state’s three racetracks, track executives and lobbyists believe historical racing is key to their survival.

Representatives from the racing industry recently appeared in Trenton before members of the New Jersey legislature calling on lawmakers to approve a measure to legalize the games.

“Based on models in other states, purses would be increased significantly so as to enable us to be more competitive with surrounding states, which have slot or casino revenue,” said Dennis Drazin, an advisor to the New Jersey Thoroughbred Horsemen’s Association.

“We do believe historical racing will increase attendance,” Drazin told GamblingCompliance in an email.

Historical racing, also known as instant racing, is a form of electronic gambling machine that allows players to bet on replays of horse races or dog races that have already run.

The machines are marketed and sold as a legal form of pari-mutuel wagering, with outcomes determined by pooled bets on previously run horse races.

“Customers bet on historical racing because it’s fast, simple and similar to slot machine play, but based on a pari-mutuel model,” Drazin said. “Fans are given past performance data, but can’t identify the race.”

Historical racing is already offered in Arkansas, Kentucky, Wyoming and Oregon with $1.1bn bet on the product in four states last year.

Idaho and Texas had approved historical racing, but then pulled the plug on the machines.

The Idaho legislature, for example, approved the machines in 2013 but then in 2015 lawmakers banned historical horseracing after concerns were raised the machines resembled illegal slot machines.

New Jersey Assemblyman Ralph Caputo, a Democrat and chairman of the Assembly Tourism, Gaming and the Arts Committee, said his committee was “very interested in learning about this new concept … that has been established in some other states and has been very, very profitable and also very successful.”

“The horseracing industry has deteriorated over the last number of years due to a lack of state support and also because of changing demographics,” Caputo said.

“Obviously, the state needs revenue, the horseracing industry needs revenue,” Caputo said. “So, we are very interested in any new concept that would help the racing industry, but also the general state of the economy of New Jersey.”

Chris McErlean, vice president at Penn National Gaming, owner of Freehold Raceway, agreed the New Jersey racing industry was struggling.

McErlean on Tuesday praised Caputo for holding a hearing on the issue, and was hopeful that historical racing gets some momentum in the legislature.

In 2011, Republican Governor Chris Christie ended a $30m annual subsidy for purses that Atlantic City casinos paid the racing industry to compensate them for a prohibition on slot machines.

The Assembly committee discussed historical racing at a June 1 hearing, but as of Tuesday had not scheduled a hearing to vote on Assembly Concurrent Resolution 196.

Senate Bill 2886 introduced in January also would permit historical racing in New Jersey.

As the results are based on actual pari-mutual races that took place in the past, supporters believe the format does not require voter approval.

Marshall Spevak, chief of staff for Assemblyman Vince Mazzeo, a Democrat who represents Atlantic City and is vice chairman of the Tourism, Gaming and the Arts Committee, said Tuesday that if historical racing is gambling then “there is a constitutional question.”

Under New Jersey’s constitution, new forms of gambling are prohibited unless they have been approved by state-wide referendum.

Spevak said his boss was “very protective of the casino business in Atlantic City.”

“That’s really the point, making sure we are not expanding gambling beyond Atlantic City,” said Spevak, adding that there needs to be “a lot more research and thought that goes into this.”

However, racing supporters insist historical racing machines simply give tracks a chance to sell their product in a new way.

Scott Wells, president and general manager of Remington Park and Lone Star Park, told attendees at last month’s Pan American Conference in Washington that historical racing was the next step in the evolution of pari-mutuel wagering.

“Not to allow racetracks to have historical racings … is a restriction of fair trade,” Wells said. “It keeps the industry in handcuffs.”

GamblingCompliance: New Jersey To Continue Sports-Betting Battle As NBA Favors Federal Solution

1ST JUN 2017 | WRITTEN BY: CHRIS SIEROTY IN NEW YORK CITY

The U.S. Solicitor General’s Office may have dealt a knockout blow to New Jersey’s six-year battle to legalize sports betting, but the state’s top gaming regulator says efforts will continue.

“We are still on hold,” David Rebuck, director of New Jersey’s Division on Gaming Enforcement (DGE), said Wednesday. “Right now, the long legal history of this case, we continue to fight the good fight.”

The solicitor general last week recommended that the Supreme Court not hear New Jersey’s case challenging the scope of the 1992 Professional and Amateur Sports Protection Act (PASPA).

PASPA bans legal sports betting in all states expect Nevada, Delaware, Oregon and Montana.

In the court brief, solicitor general Jeffrey B. Hall wrote that the case did not deserve the attention of the Supreme Court, as New Jersey had not raised valid constitutional problems and other states had yet to pursue similar legislation.

Still, sports-betting advocates remain unbowed.

“Hope springs eternal,” Joe Asher, CEO of William Hill US, said Wednesday about the prospects of rolling back the federal sports-betting ban.

“I think it was expected the solicitor general would weigh in against the court taking the case.”

But Asher predicted that if the Supreme Court allows PASPA to stand, there will be other litigation to follow in other jurisdictions. He put the chances at just 20 percent that the Supreme Court would hear the case following the solicitor general’s opinion.

Both Rebuck and Asher participated in a panel discussion at the IAGA International Gaming Summit in New York City.

Asher described PASPA as a “really obsolete law,” which has “created a large black market for illegal sports betting.”

The American Gaming Association (AGA) has estimated illegal sports betting to be a $150bn business in the United States. Others have estimated the value to be around $400bn annually.

“Clearly there is activity that is widespread throughout the United States,” Asher said.

There seemed to be division among the IAGA panelists as to who should regulate sports betting if and when it expands beyond Nevada.

Dan Spillane, senior vice president and assistant general counsel with the National Basketball Association (NBA), said there was no division about whether sports gambling should be legalized; the only disagreement is how you get there — state or federal regulation?

“The NBA endorses a federal solution,” Spillane said.

That position appears to go against the AGA’s and Rebuck’s preferred solution of states being able to choose the terms upon which they want to regulate sports betting.

Rebuck said that he was not against some federal minimum standards, but he believed there should be a state-by-state model to oversee “this type of wager in the future.”

The NBA, National Hockey League (NHL), Major League Baseball (MLB) and the National Football League (NFL) have all softened their traditional opposition to gambling in the last few years.

The NHL approved the Vegas Golden Knights as its 31st franchise that will take to the ice in September. Meanwhile, NFL owners voted 31-1 in March to allow the Oakland Raiders to move to Las Vegas, and gambling was not even an issue.

Asher said the one owner who voted against the move was concerned about teams moving, and not about any issues dealing with gambling.

Spillane admitted that the NBA helped drive the passage of PASPA out of concern over the integrity of their games.

But its position on sports betting has evolved since then.

“We have a global business,” Spillane said. “That global perspective shows us how they do it.”

As New Jersey waits for a decision from the Supreme Court, advocates are known to be lining up a further test of PASPA’s scope via a move to repeal the state’s prohibitions on sports betting and effectively permit the activity without any system of regulation.

A bill is expected to be introduced in the New Jersey House and Senate if the Supreme Court, as expected, rejects the state’s plea for a hearing on its sports-betting appeal.

Asher said that it is a “possibility that could happen.”

But Rebuck told GamblingCompliance after the panel that it was too early to discuss the possibility of New Jersey repealing its prohibition on sports gambling.

He expects a decision on whether the Supreme Court will hear the case by the end of June.

If you look at the state of gaming in the United States, it has “increased massively” since 1992 when PASPA became law, Rebuck said.

“Forty-nine states have some sort of legalized gambling,” the regulator said. “It used to be 48 states … I now call Utah in the box of legalized gambling. They don’t know it but they authorized daily fantasy sports (DFS) play.”

Rebuck added that most regulators believe DFS is “sports betting and if it is not sports gambling then it’s very close.”

He said DFS has raised the issue of sports betting with the general population.

“We love fantasy sports in the state of New Jersey for that reason,” Rebuck said.

Rebuck’s comments also came about a week after New Jersey Congressman Frank Pallone published draft legislation to overturn PASPA and establish a federal regulatory scheme for sports betting overseen by the Federal Trade Commission.

The proposed bill, known as the Gaming Accountability and Modernization Enhancement (GAME) Act, would also clarify the legality of online poker and casinos.

“Only Congress could come up with the GAME Act,” Rebuck said. “Whether it becomes legislation … it’s in its very early stages. It’s a start.”

Spillane said the NBA was looking at Pallone’s bill, but had no comment on the potential of the GAME Act becoming law.

“I appreciate it as another step forward,” Spillane said.