Odds On Racing - Harness Racing

SBOA-NJ Forges On

March 26, 2010

The Standardbred Breeders & Owners Association has intensified its campaign to bring slots to racetracks by distorting the drastically different roles that New Jersey's casino industry and horse racing industry play in our economy. Consider the following information relating to both industries and make your own judgments based on fact, not fiction.

Capital investment: The New Jersey casino industry has invested more than $17 billion of its own capital to build world-class casino facilities in Atlantic City, including more than $6 billion on projects completed since 2003 alone. In the process, the casino industry created thousands of construction jobs year after year for New Jersey's building trades. That's far more than has been invested in the racinos in Pennsylvania and New York, and it is in stark contrast to the absence of any private investment by New Jersey's racing industry in the last few decades.

Based on New Jersey Sports and Exposition Authority annual reports, slightly more than $100 million of capital was expended at all of its facilities, including racing facilities, since 2003, mostly all public funds. Even if all those funds were racing-related (which they are not), the amount represents a small fraction of the casino investment. For racing, a significant portion of these funds was expended by Monmouth Park to host the Breeders Cup - and, again, that was taxpayers' money, not private investment.

Employment: In 2009, the New Jersey casino hotels directly employed approximately 38,000 individuals, most of them in full-time jobs with good wages and full benefits. This compares to a few thousand jobs in Pennsylvania, and less than 2,000 jobs at New Jersey racetracks (a total lower than the employment at the smallest Atlantic City casino). According to the American Horse Council, many jobs in the equine industry are part-time and seasonal, with the average job equating to 0.65 of a full-time job. Applying that ratio to New Jersey racetracks would mean the tracks support the equivalent of fewer than 1,300 full-time jobs, many without benefits.

Gaming taxes: In 2009, New Jersey casinos directly paid close to $1 billion in total state and local taxes, with $295 million dedicated to seniors and people with disabilities. Incredibly, the New Jersey horse racing industry is not even subject to any revenue tax - its pari-mutuel tax was repealed in 1994. New Jersey taxpayers get no tax benefit from wagers on horses.

Money spent with N.J. businesses: In 2008, the casinos paid $4.15 billion to their vendors, $2.3 billion of which was paid to 2,119 New Jersey vendors located in all 21 counties in the state. These purchases sustained or created an estimated 20,000 additional jobs. No data is available on racing-industry purchases. However, the total economic impact of the racing industry, according to a 2007 Rutgers University study, is $502 million, which includes vendor purchasing, salaries, equipment, facilities and feed, as well as indirect spin-off impacts.

The New Jersey casino industry is the second-largest casino market in the United States. It is one of the largest employers in New Jersey, and it does not rely on subsidies for its existence. On the other hand, the New Jersey racing industry has been on life support, with fans and wagering dwindling year after year, and the industry doing nothing to deal with the changing economics in its business. Even when empowered to operate profit-producing off-track facilities by the New Jersey Legislature, the tracks dragged their feet for years before opening any facilities and only recently opened three of the 15 approved facilities.

The indisputable bottom line is that the racing industry (including many wealthy horse-farm owners) owes its existence to subsidies from taxpayers and other sources. The New Jersey Sports and Exposition Authority's racing operations have an operating deficit of about $20 million annually, even after spending the $30 million paid to the racetracks by the casinos to bail them out. All told, there are annual subsidies of approximately $70 million - money that could be used to improve education, protect public safety and meet other critical needs in our state.

Despite what the racetrack slots proponents would have you believe, when it comes to economic benefits for New Jersey, it's hardly a photo finish between the two industries. Atlantic City's casinos beat the racetracks by a country mile. We need to protect the investment in Atlantic City's casino industry because the return on that investment for New Jersey taxpayers is too important to put at risk.