Odds On Racing - Harness Racing

Is Racing Headed for the Final Stretch?

February 26, 2010

State Senate President Steve Sweeney's recent blunt declaration about proposals to install video lottery terminals at the state's racetracks — "It ain't happening," he recently told an audience of Atlantic County business leaders — sets up a potential clash of wills, competing legal opinions and executive branch versus legislative branch litigation should the Christie administration choose to pursue the idea.

During his campaign, Chris Christie expressed his opposition to placing the VLTs at the tracks out of concern that it would further undercut the casino gaming industry already reeling from a year's worth of declining revenues because of competition from casinos and slot machine parlors in Pennsylvania and Delaware.

After the election, Christie seemed to back off his campaign pledge with the appointment of a special commission to study the state's involvement in gaming, the racetrack industry and sports ventures. The commission was asked to issue recommendations by the end of June.

Christie indicated he One review conducted by lawyers retained by the casino industry concluded that it represented an expansion of legalized casino gaming and, as a result, would require additional authorization via a constitutional amendment.

The state responded by claiming that the terminals, because they were different from casino slot machines, were merely an extension of the state's lottery system — already authorized by the constitution — and the state was therefore free to install the terminals just as it installed lottery terminals elsewhere.

This opinion also suggests it could be carried out without legislative approval — a view directly contrary to that of Sweeney.

Christie has not gone beyond his comment that he would await the report of the special study commission before deciding on a course of action.

Considerable speculation has swirled around the issue, including turning responsibility for the operation of the terminals over to the casino industry and providing it a cut of the proceeds, thereby softening its opposition.

While Sweeney is reflecting the feeling of his South Jersey political base, Christie is taking the broader view — including the potential for additional state revenue — and hoping the study commission will develop a comprehensive, long-term plan for the state's role in the gaming, sports and entertainment industries.

As revealing as Sweeney's "it ain't happening" pledge was his comment that the casino industry should be relieved of its agreement to contribute millions of dollars a year to purses at the state's tracks because racing is a "dying industry."

Sweeney's remark can only be construed to mean that he feels if horse racing cannot survive on its own without substantial outside assistance, it should fade quietly out of existence. His position is a major departure from that of previous legislatures and administrations that acted on a number of occasions to prop up the racing industry.

Sweeney's assertion must have stunned supporters of horse racing. If his view precludes any legislative action to subsidize the sport, it may well turn out to be the death knell for the industry.

The entire issue could become academic, of course, if the Christie administration decides the gaming industry should remain largely unchanged and confined to Atlantic City.

Should the issue be joined, though, political, legal, social and economic arguments will fly faster than the field coming out of the fourth turn and heading down the stretch.

The only certainty at the moment seems to be that horse racing in New Jersey may be on its last four legs.would not rule out placing lottery terminals at the tracks but that the commission's recommendations would weigh heavily in any final decision.

He later suggested he would hold expanding the VLT placement over the head of Atlantic City government to force it to implement more stringent internal reforms. A recent audit by the Office of the State Comptroller uncovered numerous problem areas and instances of failure to adhere to rules and regulations in city operations.

Administration officials said that unless the city government moved expeditiously to reform itself, outside investors looking to put their venture capital into the city would be scared off by the unstable political situation.

While the governor makes a valid argument about the shambles that is city government, the issue that will be the most contentious is whether the lottery terminals will be placed in track venues.

Sweeney has drawn a line in the sand over VLTs and clearly is convinced that any effort to place the devices at racetrack facilities will require legislative action.

In 2003, when an effort to bring VLTs to venues outside Atlantic City seemed to be gaining momentum, the competing interests commissioned legal opinions to determine if such a move could be made and under what circumstances.