Legislation that would allow gamblers to bet on pre-recorded horse races could revitalize New Jersey’s slumping horse racing industry while bringing an unexpected boost to Atlantic City.
Known as “instant racing” in a proposal being floated in Trenton, the state’s horse racing industry wants to offer gaming that would allow players to bet from terminals on previously run horse races with identifying information removed from the jockeys and horses. The bets would have to flow through Atlantic City casinos to avoid any challenges to the state’s constitution, much like the state’s Internet gambling industry, lawmakers say.
That would mean Atlantic City casinos and Internet gambling firms could partner further with racetracks to offer instant wagering through electronic terminals. Atlantic City casinos would see a portion of the revenue through the arranged relationships, state Sen. Jim Whelan, D-Atlantic, said.
“It’s not live racing. It’s a race that’s been run years ago. So that complicates things, frankly, to the benefit of Atlantic City,” Whelan said. “They would then have to run the instant wagering through an Internet company in Atlantic City.”
Kentucky and Arkansas are among the handful of states that currently allow the practice credited in some cases with saving thoroughbred racing industry. Unlike live racing, during which there are significant time lapses between races and the scheduling of live events, with instant racing, gamblers can bet continuously from terminals that select races at random, much like slot machines.
Facing competition from casinos in neighboring states, Oaklawn Jockey Club in Hot Springs, Ark., began instant racing in 2000. Today, instant racing accounts for $90 million in annual revenue, outpacing the $60 million to $70 million realized through live racing and simulcast revenue, Oaklawn Vice President and Chief Operating Officer Louis Cella said in testimony Monday before a legislative wagering committee.
“Will this solve all of racing’s problems? Absolutely not,” Cella said. “However, instant racing is a start. It will help New Jersey’s racing industry without asking for any hand-outs, without asking for subsidies.”
Dennis Drazin, an adviser to the operators of Monmouth Park Racetrack, said he’s already spoken with one Atlantic City casino operator who would be willing to partner. Terminals offering the wagering would be placed at racktracks, off-track betting facilities and casino simulcast facilities.
The legislation would have to be amended to reflect the requirement that bets flow through Atlantic City, an issue that was raised Monday just prior to a hearing before the Senate State Government, Wagering, Tourism and Historic Preservation Committee.
“If the New Jersey Division of Gaming Enforcement permits the casinos to have a machine that offers the historical races, then your constitutionality issue would work the same as online gaming and would sustain any challenge to it,” Drazin said.
The stronghold of the state’s horse racing industry is located in North Jersey with the recently reopened Meadowlands Racetrack, Freehold Raceway and Monmouth Park Racetrack. The legislation also would allow the practice at the Atlantic City Race Course in Mays Landing, which currently sees just six days of live racing each year.
In a statement prepared for the committee, Meadowlands operator Jeff Gural said instant racing could be New Jersey’s answer to making horse racing sustainable in the state.
“Instant racing allows for the horse racing industry to keep up with the times through the use of new technology,” Gural said. “As competition continues to mount on all borders, instant racing will help us to compete with our neighbors whose purses and breeding programs are enhanced by slots.”
Whelan acknowledged that instant racing approaches casino gaming but is still far enough removed that he doesn’t see it as a threat to Atlantic City’s casinos.
“My general position is, give them everything they want but casino-style gaming,” Whelan said. “I understand what the horse people are trying to do. The fact is that over time, people’s tastes change. We used to ride horses in this country, and now we drive cars. That’s what they’re dealing with.”
Also at issue is regulation. Lawmakers are debating whether the New Jersey Racing Commission or the New Jersey Division of Gaming Enforcement should have control over instant racing.
Whelan said he supports the DGE regulating the practice, citing the division’s ability to get Internet gambling up and running in less than a year. Meanwhile, jabs were taken Monday at the Racing Commission’s expense for failing to implement another practice known as exchange wagering — a form of betting where two customers wager on opposing outcomes — after regulations were approved more than two years ago.
“There are a lot of people who thought, ‘Nine months for Internet (gaming)? No way,’” Whelan said. “They made it work. Two-plus years for frankly what’s a simple process ... We’ll leave it go at that.”
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