New Jersey - Beginning sports betting revolution

  New Jersey sports betting story/sent by Linda Dougherty       Flash back seven decades, to Thoroughbred racing’s “golden age,” when pari-mutuel wagering alone was able to sustain American racetracks. Huge crowds jammed grandstands, horses were heroes, and the sport had incredible popularity.    But as that “golden age” began to tarnish beginning in the 1980s, it became apparent that pari-mutuel wagering could not keep most racetracks afloat. And so, by the mid-1990s, a new revenue stream had emerged, and that came from expanded gaming from slot machines.    Racetracks in West Virginia were the first to reap the benefit of expanded gaming, and slowly but surely neighboring states in the mid-Atlantic region, like Delaware, Pennsylvania, New York, and Maryland, legalized slot machines for their racetracks, too. All of them saw once-paltry purses inflate like balloons -- all except those in New Jersey.    Saddled with the burden of coexisting with the Atlantic City casinos, with its importance to the state’s economy through both gaming and tourism, the horseracing industry in the Garden State has been unable to persuade the electorate to allow the installation of slot machines at racetracks. A casino industry purse subsidy to horseracing, which helped keep Monmouth Park and Meadowlands open, was terminated by Governor Chris Christie in 2011, leaving racing to try and survive while horsemen shopped elsewhere for richer races. But Christie, ironically, played a big role in what was to come for horseracing in his quest to legalize sports betting.    On May 14th, after hearing an oral argument in Christie v. National Collegiate Athletic Association, the Supreme Court struck down the 1992 federal law called the Professional and Amateur Sports Protection Act (PASPA) that banned commercial sports betting in most states. It opened the door for not only the state of New Jersey to benefit handsomely, but the racing and breeding industries, too -- by tens of millions of dollars each year.    For Monmouth Park, the Supreme Court decision won’t bring back the sport’s wonderful “golden age,” but the revenue will help keep the elegant oval, just miles from the sea, alive for many years to come.    “The future is rosy for us because the sports betting revenue will certainly generate the money that we need to have higher purses, extend our season, have more opportunities for our horsemen, our breeders, and bring New Jersey back to its glory days,” said Dennis Drazin, a lawyer who is the chief executive officer of Darby Development, the company that runs Monmouth Park, and an avid Thoroughbred owner and breeder.      A long road to sports betting      Congress passed PASPA almost unanimously in 1992 to preserve what lawmakers at the time felt was the integrity of the games. PASPA was sponsored by then-senator Bill Bradley, a New Jersey Democrat who once played for the New York Knicks of the National Basketball Association (NBA). Four states were not included under PASPA: Nevada, Delaware, Montana, and Oregon.    Over the years, New Jersey tried several times to implement sports betting at racetracks and casinos. In 2011, 63% of the state’s voters approved a ballot referendum that allowed the state constitution to be changed to permit sports betting at the sites of current and former horseracing tracks and casinos, with Christie signing enabling legislation the following January, which ultimately lost in court. But shortly thereafter, four professional sports leagues -- the National Football League, the National Hockey League, Major League Baseball, and the NBA, plus the National Collegiate Athletic Association -- sued Christie over the legislation, claiming that betting would “irreparably harm” sports in the United States, and successfully argued that the state was in violation of PASPA, igniting a fierce battle.    In 2014, the process repeated, with a new twist: Christie repealed an old state statute that banned sports betting at casinos and racetracks, leaving in place only some broad limits on the activity. After a federal appeals court ruled that the move failed to circumvent the law, it earned New Jersey the opportunity to argue before the Supreme Court, which led to the May 14th decision.    The legal battles have cost New Jersey taxpayers more than $9 million since 2011, according to the Wall Street Journal.    The American Gaming Association (AGA), in its amicus brief (a legal document filed by non-litigants with a strong interest in the subject matter) to the Supreme Court in support of New Jersey, stated that, “PASPA has thus had the perverse effect of pushing an enormous market underground by way of federal decree while stamping out state and local efforts to adapt their own laws pursuant to their own citizens’ wishes.”    According to the AGA, sports betting is a $150 billion business in the U.S., with all but $4.5 billion coming from illegal operations.    New Jersey’s appeal was backed by 19 states, including Pennsylvania, New York, Connecticut, Maryland, Michigan, Oklahoma, South Carolina, and West Virginia. Other parties that filed amicus briefs in the sports betting case were Christie (representing the state of New Jersey), the N.J. Thoroughbred Horsemen’s Association (a defendant and appellant alongside the state), sports law experts Ryan Rodenberg and John Holden, the European Sports Security Association, and N.J. representative Frank Pallone.      The Supreme Court Decision      By a 6-3 decision, Supreme Court justices found on May 14th that the prohibition of sports betting in most states was unconstitutional, and that PASPA impermissibly directed states to keep their bans on the books.    The gambling industry, not surprisingly, cheered the decision.    “The ruling makes it possible for states and sovereign tribal nations to give Americans what they want: an open, transparent, and responsible market for sports betting,” said AGA president Geoff Freeman in a statement.    But the NFL released a statement that reflected the opinion of professional and college leagues: “Congress has long-recognized the potential harms posed by sports betting to the integrity of sporting contests and the public confidence in these events.”    It then called on lawmakers to pass a uniform national standard for sports betting.    The New Jersey Thoroughbred industry celebrated the Supreme Court’s decision, with Drazin predicting that Monmouth Park’s profits from sports betting could range from $25 million to $50 million annually, which would be split evenly with William Hill, a London-based bookmaker that partnered with Monmouth Park several years ago in anticipation of sports betting.    “Today we’ve had an historic victory for this country and the state of New Jersey,” said Drazin at a hastily arranged press conference at Monmouth Park. “It’s the culmination of a long fight that the N. J. Thoroughbred Horsemen’s Association and the state have been engaged with, battling the leagues who’ve tried to stop us from moving forward with sports betting. This has been a fight which really is tantamount to the survival of the horseracing industry in the state. The horseracing industry represents 13,000 jobs, we are responsible for the preservation of open space of 176,000 acres, and it is a $4 billion economic industry that generates significant revenue on an ongoing basis for the state.”    Besides Monmouth Park, Meadowlands, and harness oval Freehold Raceway, the former Atlantic City Race Course in Mays Landing would be eligible to offer sports betting if it were to reopen, as well as the site of the former Garden State Park in Cherry Hill.    The sports betting bill bars one Atlantic City casino, the Golden Nugget, from sports betting because its owner, Tilman Fertitta, owns the NBA’s Houston Rockets.      Partnership with William Hill      The William Hill Sports Bar, located in a former cafeteria at the front entrance of Monmouth Park, was built in 2013 as part of Darby Development’s deal with the company. The renovation cost more than $1 million.    Joe Asher, chief executive of William Hill US, said the company invested early in New Jersey because the state was committed to going the distance to legalize sports betting. He said he believed the state’s market could grow to more than twice that of Nevada’s.    “We anticipate that when this Sports Bar becomes full-blown on sports betting, people will gravitate here,” said Asher.    Prior to the Supreme Court decision, the Sports Bar offered only pari-mutuel wagering on horseracing but provided numerous televisions that broadcast other sporting events.    “Depending upon what’s going on, people are drawn to this room,” said Drazin. “When local teams are playing, obviously there are more people, and we have enough parking to accommodate 60,000 cars, if need be.”    On May 29th, William Hill expanded its reach in New Jersey by partnering with Ocean Resort Casino, an oceanfront hotel in Atlantic City. William Hill will operate a 7,500-square foot sports book in the heart of Ocean’s gaming floor.    “We have had great success working with Ocean’s senior management in Las Vegas, and we are excited to have the chance to do so in Atlantic City at what will be the best sports book in town,” said Asher.       Impact on New Jersey racing      A crowd of 20,736 attended Monmouth Park’s opening day on May 5th, kicking off a season full of hope for the failing Thoroughbred industry.    Drazin believes sports betting throughout the state will handle $10 billion and Monmouth will handle $1 billion annually. Breaking that number down, the “win” on those wagers would be about 6%, or $60 million. After the state takes its share, it would leave about $54.6 million and half of that will go to William Hill. Monmouth would ultimately get about $27.3 million, a large chunk of which would go towards repaying money it borrowed from the state. After expenses, the remainder would go towards purses.    The last two years, Monmouth distributed average daily purses of about $314,000, on a par with Laurel Park but slightly less than Parx Racing and about $110,000 more than Delaware Park. Drazin said he’d like to have an “elite meet” again, emulating the 2010 season when the Oceanport oval distributed nearly $800,000 daily over 49 days.    He also said that, beginning in 2019, Darby Development intends to turn over the Standardbred track at the Meadowlands for dirt racing again and add racing dates. The last few years, Meadowlands has presented short, all-turf meets. This year, Monmouth will run 52 days and Meadowlands six days. Ultimately, Drazin would like to start the Thoroughbred season in May and run through December.    “We need to get the New Jersey racing industry going again, because we’re all struggling,” said Jeanne Vuyosovich, a longtime Garden State trainer, breeder, and owner. At her Sunset Meadows Farm in Farmingdale, which she’s operated for 37 years, Vuyosovich would regularly foal upwards of 25 mares, but she hasn’t foaled any in the last four years.    “People don’t want to breed in the state because of so few racing days,” she said. “It’s scary and disheartening, because people like me have put our lives into it. We’re all hoping and praying that sports betting will mean better purses and more racing days. Monmouth Park used to be considered an elite racetrack where horsemen would fight for stalls. Now, we’re a second-rate track and there’s plenty of empty stalls on the backstretch.”    Michael Campbell, the executive director of the Thoroughbred Breeders’ Association of New Jersey, said he’s hoping sports betting revenue will help revive a moribund breeding industry.    According to The Jockey Club, in the 10-year period from 2007 to 2017, the number of stallions standing in the state dropped from 29 to six, and the number of mares bred to those stallions plunged from 392 to 20. The foal crop dropped accordingly, from 401 registered New Jersey-breds in 2017, to 79 in 2016, the most recent number available.    “We’re committed to working with Darby Development and the N.J. Thoroughbred Horsemen's Association to find new and creative ways to revitalize the breeding program in the Garden State,” said Campbell. “We’ve received calls from breeders who are going to move their mares to New Jersey, and a few calls from owners of established stallions who believe the New Jersey-bred program is headed in a positive direction. Do I see a revival of the New Jersey-bred program? You bet I do!”    Campbell said that any revenue the New Jersey-bred program receives from sports betting will come as a result of discussions with Darby and the horsemen, and pointed out that Drazin has been very supportive of the breeding program over the years, producing such good runners as his Grade 3 stakes-winning homebred, Sunny Ridge, in addition to Isabelle de Tomaso’s millionaire Irish War Cry, winner of this year’s Grade 3 Pimlico Special on Preakness weekend.      The ribbon-cutting      On June 14th, one month after the Supreme Court’s decision, N.J. governor Phil Murphy placed the state’s first legal sports bet at Monmouth Park, in front of about 1,000 patrons on the first floor of the grandstand.    “There’s an old adage that you bet with your head, not your heart,” said Murphy. “So for the past seven years, our heads and hearts were in alignment as we fought to overturn an unlawful and unfair federal law. We knew in our heads we were right, and we knew in our hearts we would win.”    At 10:33 A.M., Murphy bet $20 on Germany to win the World Cup, and $20 on the N. J. Devils to win the Stanley Cup.    Said Drazin, who joined Murphy in the grandstand: “Throughout this process, Governor Murphy has always had Monmouth Park’s back, and as he is a Monmouth County resident, we’re delighted that sports betting in New Jersey gets started right in his backyard. We are thankful to all those who will make this a day long remembered, and even more so, looking forward to sports fans from all over converging on Monmouth Park to partake in sports betting, which was overwhelming approved by Garden State voters nearly seven years ago.”    The Division of Gaming Enforcement will have responsibility for licensing and creating of regulations, while the N. J. Racing Commission would be involved in racetrack-related approvals.    With that first wager, a new era in the long history of New Jersey racing began.

By Linda Dougherty

Flash back seven decades, to Thoroughbred racing’s “golden age,” when pari-mutuel wagering alone was able to sustain American racetracks. Huge crowds jammed grandstands, horses were heroes, and the sport had incredible popularity.

But as that “golden age” began to tarnish beginning in the 1980s, it became apparent that pari-mutuel wagering could not keep most racetracks afloat. And so, by the mid-1990s, a new revenue stream had emerged, and that came from expanded gaming from slot machines.

Racetracks in West Virginia were the first to reap the benefit of expanded gaming, and slowly but surely neighboring states in the mid-Atlantic region, like Delaware, Pennsylvania, New York, and Maryland, legalized slot machines for their racetracks, too. All of them saw once-paltry purses inflate like balloons -- all except those in New Jersey.

Saddled with the burden of coexisting with the Atlantic City casinos, with its importance to the state’s economy through both gaming and tourism, the horseracing industry in the Garden State has been unable to persuade the electorate to allow the installation of slot machines at racetracks. A casino industry purse subsidy to horseracing, which helped keep Monmouth Park and Meadowlands open, was terminated by Governor Chris Christie in 2011, leaving racing to try and survive while horsemen shopped elsewhere for richer races. But Christie, ironically, played a big role in what was to come for horseracing in his quest to legalize sports betting.

On May 14th, after hearing an oral argument in Christie v. National Collegiate Athletic Association, the Supreme Court struck down the 1992 federal law called the Professional and Amateur Sports Protection Act (PASPA) that banned commercial sports betting in most states. It opened the door for not only the state of New Jersey to benefit handsomely, but the racing and breeding industries, too -- by tens of millions of dollars each year.

For Monmouth Park, the Supreme Court decision won’t bring back the sport’s wonderful “golden age,” but the revenue will help keep the elegant oval, just miles from the sea, alive for many years to come.

“The future is rosy for us because the sports betting revenue will certainly generate the money that we need to have higher purses, extend our season, have more opportunities for our horsemen, our breeders, and bring New Jersey back to its glory days,” said Dennis Drazin, a lawyer who is the chief executive officer of Darby Development, the company that runs Monmouth Park, and an avid Thoroughbred owner and breeder.

A long road to sports betting

Congress passed PASPA almost unanimously in 1992 to preserve what lawmakers at the time felt was the integrity of the games. PASPA was sponsored by then-senator Bill Bradley, a New Jersey Democrat who once played for the New York Knicks of the National Basketball Association (NBA). Four states were not included under PASPA: Nevada, Delaware, Montana, and Oregon.

Over the years, New Jersey tried several times to implement sports betting at racetracks and casinos. In 2011, 63% of the state’s voters approved a ballot referendum that allowed the state constitution to be changed to permit sports betting at the sites of current and former horseracing tracks and casinos, with Christie signing enabling legislation the following January, which ultimately lost in court. But shortly thereafter, four professional sports leagues -- the National Football League, the National Hockey League, Major League Baseball, and the NBA, plus the National Collegiate Athletic Association -- sued Christie over the legislation, claiming that betting would “irreparably harm” sports in the United States, and successfully argued that the state was in violation of PASPA, igniting a fierce battle.

In 2014, the process repeated, with a new twist: Christie repealed an old state statute that banned sports betting at casinos and racetracks, leaving in place only some broad limits on the activity. After a federal appeals court ruled that the move failed to circumvent the law, it earned New Jersey the opportunity to argue before the Supreme Court, which led to the May 14th decision.

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