Post by thanksforthecash on Feb 5, 2008 13:27:34 GMT -5
Corzine Gets Caught in Fight Between New Jersey Casinos, Horses
By Adam L. Cataldo
Feb. 5 (Bloomberg) -- New Jersey's horse industry is racing for its life.
Racetrack owners say they can't survive unless they are allowed to install video-lottery terminals or get a subsidy to make up for not having them.
Governor Jon Corzine doesn't want to legalize the video games outside Atlantic City because they might hurt casinos' business. The casinos, already facing revenue losses as neighboring states open gambling parlors, say they can't afford to renew the $20 million subsidy they paid for four years.
More horse owners may move their operations elsewhere unless New Jersey's four tracks find a way to fatten their purses, which have shrunk as betting declined. The breeders and tracks contribute $1.1 billion a year to the state economy, according to a study by the Rutgers Equine Science Center.
``The clock is ticking,'' said Senate President Richard Codey, a horse-racing fan. ``If they don't do anything quick, especially with the subsidy, all hell is going to break loose.'' Eleven states already have so-called racinos, combined racetracks and casinos. New York has eight and Pennsylvania's sixth is opening this month.
Revenue from the video lottery terminals allows tracks to offer bigger race purses. VLTs are similar to slot machines but are hooked up to a central computer that randomly generates winning numbers. Slot machines, which account for most of Atlantic City casinos' revenues, each pick winners separately.
Corzine in Middle
Corzine said last week that his administration is negotiating with both sides. He says he wants to help horse racing without hurting Atlantic City, which has had a state monopoly on casino gaming since it was legalized in 1976.
``It would be very undermining, or potentially undermining, of what I see as a huge investment coming to Atlantic City to make it a real destination resort and create tens of thousands of jobs,'' Corzine, a first-term Democrat, said in an interview.
Lawmakers say New Jersey's horse industry will perish if a solution isn't found. The tracks and breeders pay about $63 million annually in state and local taxes, according to the Rutgers study.
Wagering on New Jersey horse races declined 25 percent to $924 million in 2006 from 1999, according to a state- commissioned study released last year by Christiansen Capital Advisors, a New York gaming-research firm.
The survey showed that purses are shrinking in New Jersey and increasing in New York and Pennsylvania, and the trend is projected to continue. That's encouraging owners of the best horses to leave, said Michael Harrison, president of the Thoroughbred Breeders' Association of New Jersey.
Disappearing Horses
Joe Jennings of Monmouth County said 25 of the 150 mares he bred last year were moved to Pennsylvania.
``If the breeding industry dies in New Jersey, there is no hope for the racing industry,'' Jennings said.
The casinos say they shouldn't have to continue subsidizing horse racing.
``For them to blame us for their failure is ridiculous,'' said Joseph Corbo, president of the Casino Association of New Jersey. ``Even if that were the case, so what? Is Smith Corona looking for a subsidy from IBM?''
Legislation to place 5,000 video-lottery terminals at the Meadowlands racetrack in East Rutherford failed in 2005, opposed by casino owners including Caesars Entertainment Inc. and Trump Entertainment Resorts Inc.
State Senator Paul Sarlo introduced the measure again last month and asked the casino group to drop its objections.
``New Jersey needs to develop a united front to preserve all elements of our gaming industry,'' wrote Sarlo, a Democrat whose district includes the Meadowlands Racetrack. The others are Monmouth Park Racetrack, Freehold Raceway and Atlantic City Race Course.
Corzine Turnabout
Corzine advocated video-lottery terminals in his budget address a year ago, saying they could raise money to help fix the state's finances. That was before the Christiansen report found that the machines would hurt casinos.
Atlantic City casinos' revenue declined last year for the first time, to $4.92 billion, which they blame on competition from other states and restrictions on smoking.
The casinos purchase $2.2 billion of goods and services in the state each year and generate $1.1 billion of state tax revenue annually, according to the industry group.
The industry has made $12 billion of capital investment since its inception, and $10 billion more is planned, Corbo said. Those projects could be scaled back or canceled if video- lottery machines take away business, he said.
``Installing VLTs at the racetracks would make us seriously reconsider any further investment in Atlantic City,'' said Thomas Hickey, a spokesman for Trump Entertainment, which owns three casinos there. ``The potential exists for it to have a negative impact on our market.''
To contact the reporter on this story: Adam L. Cataldo in New York at acataldo@bloomberg.net .
Last Updated: February 5, 2008 00:13 EST
By Adam L. Cataldo
Feb. 5 (Bloomberg) -- New Jersey's horse industry is racing for its life.
Racetrack owners say they can't survive unless they are allowed to install video-lottery terminals or get a subsidy to make up for not having them.
Governor Jon Corzine doesn't want to legalize the video games outside Atlantic City because they might hurt casinos' business. The casinos, already facing revenue losses as neighboring states open gambling parlors, say they can't afford to renew the $20 million subsidy they paid for four years.
More horse owners may move their operations elsewhere unless New Jersey's four tracks find a way to fatten their purses, which have shrunk as betting declined. The breeders and tracks contribute $1.1 billion a year to the state economy, according to a study by the Rutgers Equine Science Center.
``The clock is ticking,'' said Senate President Richard Codey, a horse-racing fan. ``If they don't do anything quick, especially with the subsidy, all hell is going to break loose.'' Eleven states already have so-called racinos, combined racetracks and casinos. New York has eight and Pennsylvania's sixth is opening this month.
Revenue from the video lottery terminals allows tracks to offer bigger race purses. VLTs are similar to slot machines but are hooked up to a central computer that randomly generates winning numbers. Slot machines, which account for most of Atlantic City casinos' revenues, each pick winners separately.
Corzine in Middle
Corzine said last week that his administration is negotiating with both sides. He says he wants to help horse racing without hurting Atlantic City, which has had a state monopoly on casino gaming since it was legalized in 1976.
``It would be very undermining, or potentially undermining, of what I see as a huge investment coming to Atlantic City to make it a real destination resort and create tens of thousands of jobs,'' Corzine, a first-term Democrat, said in an interview.
Lawmakers say New Jersey's horse industry will perish if a solution isn't found. The tracks and breeders pay about $63 million annually in state and local taxes, according to the Rutgers study.
Wagering on New Jersey horse races declined 25 percent to $924 million in 2006 from 1999, according to a state- commissioned study released last year by Christiansen Capital Advisors, a New York gaming-research firm.
The survey showed that purses are shrinking in New Jersey and increasing in New York and Pennsylvania, and the trend is projected to continue. That's encouraging owners of the best horses to leave, said Michael Harrison, president of the Thoroughbred Breeders' Association of New Jersey.
Disappearing Horses
Joe Jennings of Monmouth County said 25 of the 150 mares he bred last year were moved to Pennsylvania.
``If the breeding industry dies in New Jersey, there is no hope for the racing industry,'' Jennings said.
The casinos say they shouldn't have to continue subsidizing horse racing.
``For them to blame us for their failure is ridiculous,'' said Joseph Corbo, president of the Casino Association of New Jersey. ``Even if that were the case, so what? Is Smith Corona looking for a subsidy from IBM?''
Legislation to place 5,000 video-lottery terminals at the Meadowlands racetrack in East Rutherford failed in 2005, opposed by casino owners including Caesars Entertainment Inc. and Trump Entertainment Resorts Inc.
State Senator Paul Sarlo introduced the measure again last month and asked the casino group to drop its objections.
``New Jersey needs to develop a united front to preserve all elements of our gaming industry,'' wrote Sarlo, a Democrat whose district includes the Meadowlands Racetrack. The others are Monmouth Park Racetrack, Freehold Raceway and Atlantic City Race Course.
Corzine Turnabout
Corzine advocated video-lottery terminals in his budget address a year ago, saying they could raise money to help fix the state's finances. That was before the Christiansen report found that the machines would hurt casinos.
Atlantic City casinos' revenue declined last year for the first time, to $4.92 billion, which they blame on competition from other states and restrictions on smoking.
The casinos purchase $2.2 billion of goods and services in the state each year and generate $1.1 billion of state tax revenue annually, according to the industry group.
The industry has made $12 billion of capital investment since its inception, and $10 billion more is planned, Corbo said. Those projects could be scaled back or canceled if video- lottery machines take away business, he said.
``Installing VLTs at the racetracks would make us seriously reconsider any further investment in Atlantic City,'' said Thomas Hickey, a spokesman for Trump Entertainment, which owns three casinos there. ``The potential exists for it to have a negative impact on our market.''
To contact the reporter on this story: Adam L. Cataldo in New York at acataldo@bloomberg.net .
Last Updated: February 5, 2008 00:13 EST