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.”

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