Bigger is Better The Health of the Racing Industry in Depends on Large Purses

by Kenneth F. Oettle

n casino games such as blackjack and roulette, one ages from different pools. In New Jersey, the track can take up bets against the house, not the other players. It’s a to 17 percent from pools where bettors select one horse, up to head-to-head contest, with the odds skewed in the 19 percent where bettors select two horses, and up to 25 per - house’s favor so that over time, the house is a net win - cent where bettors select three or more horses. 4 Generally, the ner. The house does not take a percentage of each bet. more complex the bet, the greater the track’s permitted share of the betting pool, and thus the greater the take-out. In poker, in contrast, one bets against the other players, Payoff odds are determined by the amounts bet on each I 5 not against the house. When a player wins, the other players horse in a race. The odds change as the bets flow in, and they lose, aside from split pots. The house participates in the game remain fluid until just before the race begins. This contrasts only through a small ‘rake’ from each pot ( e.g., 10 percent up with fixed-odds betting, where the payout is agreed to when to a maximum of $4 per hand in $2/$4 Texas Hold ‘Em). the bet is made. 6 Money bet on horseracing is also subject to a rake, called the ‘take-out’ or ‘take’a statutorily limited percentage a race - Setting the Odds track is permitted to extract from the money wagered before The odds on particular horses are calculated by comparing winning bets are paid. 1 The take-out pays the track’s expenses the amount bet on that horse to the total amount bet on all and funds the ‘purses,’ that is, the prize money available to the horses in a race after the take-out has been subtracted. pay the winning horses in all the races on a given date. Before any bets are placed, an oddsmaker estimates the initial Betting in horseracing follows the pari-mutuel system, in odds for a race, called the morning line. 7 The odds then adjust, which bettors compete against each other for the same pool depending on how much is bet on each horse scheduled to of money. In this system, after the bets are pooled and the run in the race. Shortly before the race begins, betting is halt - take-out is removed, payoff odds are calculated, and the ed, and the odds are set. remaining money is distributed among the winning bettors. 2 Assume that a total of $50,000 is bet on all the horses in a Different types of bets are aggregated in separate pools. race; the permitted take-out for a win-place-show pool is 17 Bets on one horse to win, place or show ( i.e., to come in first; percent ($8,500); and $14,000 was bet on horse #3. To deter - first or second; or first, second or third) are called straight mine the odds to win on horse #3, first subtract the take-out bets. Bets on more than one horse are called exotics. This from the total amount bet ($50,000 minus $8,500, leaving includes, for example, the daily double (winners of two select - $41,500 as the available payout), then subtract the amount ed races), the exacta (first and second in one race in exact bet on the horse to win ($14,000) from the available payout order), the trifecta (first, second, and third in one race in exact ($41,500 less $14,000, leaving $27,500). Now divide that order), and the superfecta (first, second, third, and fourth in number by the amount bet on the horse ($27,500 divided by one race in exact order). 3 $14,000). The odds on horse #3 are approximately two-to- Racetracks are permitted by law to take different percent - one. This means that a bettor will win approximately two dol -

14 NEW JERSEY LAWYER | April 2013 WWW .NJSBA .COM lars for every one dollar bet. 8 Because more enticing. For example, a favorite tracks, and casinos. the bettor also recovers his or her origi - in a field of six might go off at even On the other hand, many horsemen nal bet, the bettor will receive back odds (one-to-one), whereas in a larger (those who breed, train, and race horses) approximately three dollars for every field with faster horses, the odds on the prefer more racing dates (a longer one dollar bet. 9 favorite might be two-to-one, five-to- ‘meet’) to give them more opportunities As more money is bet on a horse in two, or even longer. If bettors see an to win prizes, albeit smaller, to showcase comparison to what has been bet on the opportunity to leverage their money, their horses and give them racing expe - other horses in a race, the odds on the they tend to bet more, the take-out is rience, to stable their horses longer in horse go down, for example, from four- larger (though the percentage is limited one place, and to provide employment to-one to three-to-one, meaning that by statute), the purses can be larger, and, for those who work in, and provide serv - instead of betting one dollar to win four, in a seamless circle of causation, more ices to, the racing industry. the bettor is wagering one dollar to win and better horses come to compete. Suc - Having money circulating in the three. If people bet heavily on a particu - cess breeds success. horseracing economy is important not lar horse ( e.g., Seattle Slew), the horse The central economic issue for the only to racetracks looking to meet could go off at odds of one-to-two or horseracing business is thus the size of expenses and to the state, which collects lower, meaning that a bettor would the purses, how to keep them large taxes on winnings, wages, and, when have to bet two dollars to win enough to attract more and faster hors - applicable, track profits, but also to one,unattractive odds unless the horse es, generate betting interest, and pro - horsemen because, among other things, is almost sure to win. duce enough income to sustain the owning a race horse is expensive. A Low odds don’t ensure that the horse industry. 11 horse owner typically pays a monthly is faster than all the other horses in the retainer or, in North America, a day rate field. They mean only that people are Number of Racing Dates to his or her trainer, together with fees betting on the horse. 10 Whether the bets The size of purses is a function, in for use of a training center (if the horse are made with smart money remains to part, of the number of racing dates. is not stabled at a racetrack), veterinari - be seen. Often, the general public isn’t Generally, more racing dates means an and farrier (horse shoer) fees, and very smart, whereas veteran handicap - smaller purses, and fewer racing dates other expenses, such as mortality insur - pers who take into account, among means larger purses. Having more rac - ance premiums, race entry fees, and other things, prior performance, track ing dates tends to reduce the size of the jockeys’ fees. The typical cost of owning conditions, the health of the horse, the purses because on most days, the fields a racehorse in training for one year is competition, and the jockey can make a tend to be smaller, fewer patrons attend, said to be on the order of £15,000 in the living at it despite the track’s substantial less money is bet, and the take-out is United Kingdom and as much as take. less. With fewer racing dates, atten - $35,000 at major race tracks in North dance tends to be higher per date, and America. 12 Prize money helps pay for the The Track Needs the Take-out the field in each race tends to be larger. expense of feeding, stabling, training The take-out is necessary to pay the As discussed, large fields stimulate bet - and racing a horse, and for the cost of racetrack’s operating expenses and to ting interest, and the track’s take-out breeding more racehorses. provide the purses or prize money. It’s a tends to be larger. The larger the take- truism in the racing business that the out, the larger the purses, the faster the Legislative Support best horses race where the purses are horses, and so forth. The New Jersey Legislature has largest. If purses are generous, owners Track operators tend to prefer fewer declared that the state’s horseracing bring faster horses and more horses to racing dates so they can generate industry is economically important to the track, stiffening the competition enough revenue to cover the daily cost the state and that “the general welfare and increasing the size of the ‘fields’ of operating the track and awarding of the people of the State would be pro - (the horses in a given race). The size of prizes. These costs must be covered by moted by the advancement of horse rac - the purses is, ultimately, what keeps admission fees, concessions, and the ing and related projects and facilities in horseracing viable. track’s share of the money bet on the the State.” 13 As racing enthusiasts know, If fast horses race, more interest is races, whether the bets are placed at the the impact of horseracing is felt more generated, and more money is bet. In track or at off-track sites that receive the than just at the track. Thousands of addition, if more horses race, the odds track’s video signal, including off-track acres of open space are maintained in on the favorites become longer and wagering parlors (OTWs), other race - the state for breeding, training, and rac -

WWW .NJSBA .COM NEW JERSEY LAWYER | April 2013 15 ing horses; thousands of jobs are gener - by payments from the Atlantic City casi - commission action not approved by the ated by the industry; and hundreds of nos in two successive multi-year deals governor would be null and void. 24 The millions of dollars are pumped into the intended to induce the racing industry commission isn’t the only agency whose state’s economy by the breeding and not to seek slot machines,an enhance - minutes are subject to gubernatorial racing of horses. 14 ment that racetracks have added in approval, 25 but this concession by the Looking to accommodate the racing Pennsylvania, New York, and elsewhere commission to the governor of a second- industry in its effort to maximize purses, in the region. The casinos initially pro - guess opportunity undermined the Legis - the Legislature has frequently adjusted vided $86 million to augment purses lature’s intentions when the governor the required minimum number of racing over four years 19 and then $90 million vetoed the Racing Commission’s attempt dates, mandating, for example, no fewer over three years. 20 In 2011, casino sup - to award casino cost savings to the racing than 141 annual thoroughbred racing port came to an abrupt halt when the industry to augment purses. dates,a number that is attractive to governor refused to approve an award of On June 29, 2011, the commission horsemen, who like more dates rather additional casino money set aside for approved the allocation to the industry, than fewer, as discussed above,but the racing industry by the Legislature. to be awarded in 2012; 26 and on July 1, allowing that number to drop to as low After the two casino deals totaling 2011, the governor vetoed the award, as 71 dates for thoroughbred racing with $176 million, the Legislature tried to stating that the proposed payment con - the consent of the New Jersey Thorough - give the racing industry further support tradicted and jeopardized the state’s bred Horsemen’s Association (NJTHA). 15 by providing that regulatory costs saved goal of creating a self-sustaining Similar flexible mandates are applied to through the elimination of duplicative horseracing industry. 27 harness racing at the Meadowlands Race - regulation by the Casino Control Com - The NJTHA appealed the governor’s track and Freehold Raceway—151 stan - mission and the Division of Gaming veto, and on Dec. 7, 2012, the Appellate dardbred racing dates at the Meadow - Enforcement could be awarded to the Division affirmed, principally on the lands and 192 at Freehold, reducible to racing industry to augment pursesup to ground that the Legislature had given 75 dates at each venue upon written $15 million the first year, $10 million the governor veto power over the consent from the Standardbred Breeders’ the second year, and $5 million the actions of the Racing Commission and and Owners’ Association of New Jersey. 16 third year. 21 The plan was to wean the that the New Jersey Constitution did The Legislature has even tried its hand horseracing industry away from reliance not prevent one branch of government at mandating minimum purses. The on monies from the casino industry from effecting a clear-eyed sharing of statutory section mandating minimum while still helping to augment purses. 22 power with another branch. 28 racing dates provided that from 2004 to The savings would be identified by the The court acknowledged that it was 2007, the holders of permits for running division, paid by the casinos to the Casi - “an ostensibly inconsistent result,” thoroughbred races at Monmouth Park no Reinvestment Development Authori - given the Legislature’s statutory and the Meadowlands—at the time, the ty (CRDA), and allocated by the CRDA to acknowledgement of the racing indus - permit holder was the New Jersey Sports the Racing Commission to support the try’s importance to the state, but the and Exposition Authority (NJSEA)— racing industry through the augmenta - result was sustainable because the Legis - could schedule as few as 120 thorough - tion of purses. The amount to be collect - lature specifically referred to and chose bred race dates between the two venues, ed and allocated in support of horserac - not to amend the statute granting the but only if the permit holder would guar - ing would be established at a Racing governor authority to review Racing antee certain minimum purses for stakes Commission meeting and reflected in Commission minutes when it enacted races 17 and for the traditional meet (for the minutes, which would be sent to the legislation to fund racing industry purs - the traditional meet at Monmouth Park, governor for review and approval. 23 es from casino regulatory savings. 29 daily purses of at least $320,000 for 2004, And there was the rub. Because the A petition for certification has been $325,000 for 2005, $330,000 for 2006, governor had to approve the allocation, filed with the New Jersey Supreme and $335,000 for 2007). 18 it became a gift that was never given. Court. 30 The Legislature has not mandated When the Legislature passed the Off- On June 20, 2012, the Racing Com - minimum purses since 2007. Track and Account Wagering Act in 2001, mission again voted a supplement for it added to the Racing Commission’s the racing industry, 31 and again the gov - Support from the Casinos enabling act a provision that the minutes ernor vetoed it. 32 A separate appeal was Between 2004 and 2010, purses at of every commission meeting would be filed but was not resolved by the Appel - New Jersey racetracks were augmented delivered to the governor and that any late Division’s ruling on Dec. 7, 2012. 33

16 NEW JERSEY LAWYER | April 2013 WWW .NJSBA .COM Governor Chris Christie’s vetoes of that would have been distributed in the would be worth $75,000. 46 the proposed casino supplements in first year of the program (2012) was to The plan worked. By the end of its 2011 and 2012 came as no surprise. The be $2.5 million. 40 By comparison, Mon - 50-day Elite Summer Meet in 2010, governor had made clear that the state mouth Park awarded a total of $33.2 Monmouth Park had averaged the high - would no longer subsidize the racing million in purses over 77 days of racing est purses in the nation, at $797,079 per industry. 34 This policy decision ultimate - in 2011. 41 day, leading to a 213 percent increase in ly resulted in the privatization of the average daily handle over 2009, includ - and Monmouth Monmouth Park’s ing a 79 percent increase in on-track Park, as evidenced by long-term leases Elite Summer Meet of 2010 handle (as opposed to off-track wager - entered into by the NJSEA, the former Monmouth Park experienced signifi - ing), a 47 percent rise in attendance, permit holder for both the Meadowlands cant increases in betting ‘handle’ (the and a 25 percent gain in field size. 47 Racetrack and Monmouth Park, with amounts bet) from awarding extraordinar - In 2009, by comparison, 141 days of New Meadowlands Racetrack, LLC for ily large purses in 2010. For that racing thoroughbred racing had taken place the Meadowlands Racetrack in Dec. season, the Legislature relaxed the mini - between Monmouth Park and the 2011 35 and with the NJTHA for Mon - mum days requirement for thoroughbred Meadowlands, with Monmouth Park mouth Park in March 2012. 36 racing, albeit for that year only, to “no offering a daily average of $330,000 in The privatization leases include sever - fewer than 71 race dates in the aggregate,” purses over 93 dates. According to one al terms intended to give the new permit all to take place at Monmouth Park. 42 The commentator, “Much of the racing [in holders a head start. For example, under plan was for Monmouth Park to conduct 2009] was poor, with small fields, the the lease for the Meadowlands Racetrack, a 50-day meet on Fridays, weekends, and kind that bettors shun.” 48 the rent for the first five years will be $1 three Monday holidays, from May 22 Having fewer racing dates with the per year, then the greater of $500,000 or through Labor Day, with purses of an resultant larger fields and larger purses 10 percent of the lessee’s net operating industry-leading $1 million per day. 43 was a success in terms of excitement and profits. The lessee obtains certain OTW By comparison, Monmouth Park’s action. But it was not a panacea. The rights and has the right to conduct gam - chief competition, Saratoga Race Course NJSEA still lost $6 million for the year ing at the Meadowlands Racetrack if state in upstate New York, offered daily purs - on thoroughbred racing. 49 Moreover, the law changes to allow it. 37 es of about $730,000 for its 2009 meet huge purses for the Elite Summer Meet Under the lease for Monmouth Park, in late July and August. That was tops at Monmouth Park were not sustainable the NJSEA is advancing the NJTHA up to in the sport. 44 To fill out the legislatively because they were subsidized by $19 $5 million, to be repaid over five years, required 71 racing dates, Monmouth million from the casino industry in the beginning in 2015, and it is providing a Park would hold a second, 21-day meet last year of a sequence of seven years in $4 million grant for the 2012 racing sea - from mid-September to late November, which the casinos paid the racing indus - son to offset what was projected to be an offering smaller daily purses. try up to $30 million per year to aug - $8 million loss. The state also agreed to Monmouth Park had been conduct - ment purses and support breeding in advance up to $2 million to cover operat - ing racing on a Wednesday to Sunday return for the racing industry’s agreeing ing losses for 2013 and 2014, to be repaid schedule from June through August. By not to seek slot machines at the tracks. 50 over five years, beginning in 2016 and reducing the number of racing dates In 2011, the size of purses returned to 2017. 38 As with the Meadowlands lease, and offering the highest purses in the the levels of 2009. 51 The thoroughbred rent is initially $1 per year. During the country, Monmouth hoped to attract permit holder (NJSEA) ran live racing on first 10-year renewal term, beginning in larger fields and better horses for the 12 only 71 dates, 52 but the governor had 2017, the annual rent will be the greater or so races it would run each day. That, made a decision to cease providing state of $250,000 or five percent of the NJTHA’s in turn, was expected to lead to a signif - funds to augment purses. Consequently, net operating profits. If the gaming laws icant increase in the amount of money the purses at Monmouth Park in 2011 change, NJTHA has the right to conduct wagered. The plan was modeled after were several hundred thousand dollars permitted gaming from the racetrack. 39 similar approaches in Japan and Aus - less per day than in 2010. The loss of the supplemental casino tralia, where most horseracing is held money hurts, but only to a degree, given on weekends with huge purses. 45 The The Hanson Report that the money would be split among minimum purse for a single race would While plans were being developed several stakeholders. For example, Mon - be $30,000, and even races for maidens for the 2010 Elite Summer Meet at Mon - mouth Park’s share of the $15 million (horses that had never won a race) mouth Park, an advisory commission

WWW .NJSBA .COM NEW JERSEY LAWYER | April 2013 17 created by Governor Christie’s Executive off-track wagering totaling $9.5 million. The constitutional issues were argued Order 11 on Feb. 2, 2010, (the Hanson As a result, the combined loss of the on Feb. 14, 2013. Commission, named for its chairman, Meadowlands and Monmouth Park was The racing industry continues to Jon Hanson), was looking into New Jer - $9.7 million in 2009 versus $6.0 million hope for slot machines to place the sey’s gaming and entertainment indus - in 2008. Freehold Raceway suffered a tracks on an even footing with race - tries, including horseracing. One of the net loss of $4 million for 2009, and it tracks in neighboring states. But in issues the Hanson Commission was was forced to make major cutbacks in 2012, the governor said he would give directed to examine was the “perceived expenses to remain financially viable. 59 the casino industry five years to recover need to ensure that New Jersey’s horse In 2010, Monmouth Park lost $6 mil - before considering the installation of racing industry becomes self-sustain - lion, the Meadowlands lost $10 million, slots elsewhere in the state. 64 Conse - ing.” 53 On July 10, 2010, halfway Atlantic City Race Course lost $711,000 quently, that potential source of rev - through the Elite Summer Meet, the (in a six-day meet), and Freehold Race - enue for the racing industry is on hold. commission issued an economic recov - way lost $3.9 million. 60 Off-track wagering is another source of ery plan for the state’s gaming, racing, In 2011, with 71 days of live racing, revenue with which to supplement purs - and entertainment industries known as Monmouth Park’s average on-track han - es,possibly the most important source the Hanson Report. 54 dle (amount wagered) came in at under present circumstances. The race - The commission concluded that to $490,999, a 19.9 percent gain over the track permit holders have the right to compete with regional racetracks whose amount wagered on average during the operate existing OTW parlors and to purses were funded by the proceeds 93-day 2009 race meet (validating the build more. 65 According to Dennis Drazin, from gaming machines, “major and dra - thesis that fewer dates means increased a consultant to the NJTHA and former matic changes need to be made to rac - per-day handle). 61 The total average han - head of the Racing Commission, a build- ing, including shorter meets, higher dle jumped 49.1 percent, with $4,695,424 out of the OTWs allocated to the permit purses and larger fields for racing.” 55 The wagered in 2011 versus $3,148,339 in holder at Monmouth Park is necessary for Hanson Report opined that these 2009. The 2011 racing year, like that of that venue to become profitable: changes “would result in a reduced but 2009, did not feature an elite meet with higher quality product,” and they specially augmented purses. Obviously, in order for this place to would “be reflected in higher wagering In 2012, average daily attendance at turn around we have to build out the and thereby create greater purses.” 56 Monmouth Park was 8,403 for the 65- OTWs. We have to bring in the rev - The Hanson Commission concluded day meet, up 10.9 percent from 7,574 in enues that come from that. 66 that the 50-day elite meet concept, then 2011. 62 However, purses at Monmouth being executed at Monmouth Park, “will in 2012 averaged $366,047 per day, Under their privatized leases, the per - have a positive and lasting effect on the down from $430,672 in 2011. Field size mit holders at the Meadowlands and industry.” 57 However, the report cau - averaged 7.66 horses per race, down Monmouth Park also have a 50 percent tioned that the purse enhancements for slightly from 7.76 in 2011. 63 interest in net revenues from ‘account the Elite Summer Meet at Monmouth The New Jersey racing industry is wagering’ (betting by telephone and the Park were enabled in part by casino waiting on developments in several Internet). 67 money, and it urged that secondary rev - areas, including , gaming Finally, in exchange for one of the enue sources, such as food and beverage, machines, and the build-out of OTWs. OTWs allocated to the permit holder for general admission, parking, and reserved As reported recently on almost a daily Monmouth Park, the NJTHA has seating, be “maximized” if the meet basis, the state of New Jersey and the obtained exclusive rights under a pilot were to be reduced to 50 racing dates. 58 NJTHA are litigating in federal court program to operate up to a total of 20 against the professional sports leagues, electronic wagering terminals spread Where Does the Industry the National Collegiate Athletic Associa - among up to 12 restaurants and bars in Go From Here? tion (NCAA), and the federal govern - the northern part of the state. 68 This The New Jersey racing industry has ment regarding New Jersey’s contention form of off-track wagering is not yet in struggled in recent years. The combined that the federal statute prohibiting operation. net operating loss for the Meadowlands sports betting is unconstitutional. If In addition to the concessions grant - and Monmouth Park totaled $19.3 mil - sports betting were installed at the race - ed by the state in connection with the lion in 2009, softened by income from tracks, it would provide revenue to aug - privatization of the Meadowlands Race - account wagering (discussed below) and ment purses. track and Monmouth Park, the tracks

18 NEW JERSEY LAWYER | April 2013 WWW .NJSBA .COM are free to add amenities and market Id. per year at top level. their product. Monmouth Park, looking 4. N.J.S.A. 5:5-64. 13. N.J.S.A. 5:5-128 – preamble to the to enhance its appeal as an entertain - 5. Wisegeek.com, “How do They Off-Track and Account Wagering ment destination at the New Jersey Determine Odds?” Act, L. 2001, c. 199. shore, has installed four large-screen 6. Wikipedia – pari-mutuel, supra , n. 2. 14. According to S. Strunsky, Gov. Chris video boards and a miniature golf com - 7. Wisegeek.com, supra , n. 5. Christie announces deal to give plex, 69 and it has plans for a water theme 8. Id . If $15,300 rather than $14,000 Monmouth Park’s 2012 race dates, park, a hotel on an adjacent property, a were bet on horse #3, the odds Star-Ledger , Dec. 20, 2011, Mon - boardwalk and an arcade. 70 would be approximately one point mouth Park, the Meadowlands and As changes installed by the new eight to one ($27,500 divided by related businesses provide 7,000 lessees at the Meadowlands and Mon - $15,300). Because horseracing odds jobs and $780 million in economic mouth Park take hold, as the OTWs con - are expressed in whole numbers, activity for the state each year (cit - tinue to churn out revenue and new one point eight to one is converted ing a 2007 study by the Rutgers OTWs are built, and as the overall econ - to odds of nine-to-five. Id. Equine Science Center). The Rutgers omy continues its slow recovery, the 9. The amounts paid out are rounded study is available at www.esc.rut - uncertain economic outlook for the rac - down to intervals of 10 cents. The gers.edu/news_more/PDF_Files/200 ing industry in New Jersey may rounding loss is known as breakage, 7_Equine_Economic_Impact_Study improve. The situation remains fluid. and is removed from the pool and _Report.pdf. The state has given the racing indus - allocated by statute to various stake - 15. N.J.S.A. 5:5-156(a). In thoroughbred try a stake, as it were, through privatiza - holders ( e.g ., the racetrack permit racing, jockeys ride horses that run tion deals that require low initial rent holder, purses, the Racing Commis - as fast as they can in an asymmetri - and provide collateral revenue sources, sion, health and welfare funds for cal gait called a gallop. In harness but the state has otherwise left the jockeys and harness race drivers, racing, in contrast, the horses pull a industry to fend for itself. In the give and programs to aid horsemen’s two-wheeled cart called a sulky and and take of politics (the allocation of associations), depending on race in a symmetrical gait called a resources and power), the industry is whether the breaks are from on- trot or a pace. A trotter moves its seen as worth saving, but no longer track or off-track wagering. See legs forward in diagonal pairs (right worth subsidizing. 71 N.J.S.A. 5:5-64 (“The breaks are front and left hind, then left front hereby defined as the odd cents and right hind striking the ground Endnotes over any multiple of $0.10.”). See simultaneously), whereas a pacer 1. See N.J.S.A. 5:5-64. also , N.J.S.A. 5:5-123 to 126 and moves its legs laterally (right front 2. See http://en.wikipedia.org/wiki/ N.J.S.A. 5:5-147 and 150 to 152. and right hind together, then left Parimutuel_betting (“Wikipedia— 10. Low odds mean something is likely front and left hind). See pari-mutuel”). The pari-mutuel sys - to happen. High odds mean some - http://en.wikipedia.org/wiki/Har - tem is also used for greyhound rac - thing is not likely to happen. See ness_racing . ing, jai alai, and other sporting http://grammar.quickanddirtytips.c 16. N.J.S.A. 5:5-156(b) and (c). Stan - events of relatively short duration om/high-odds-low-odds.aspx. dardbreds are so named because in in which participants finish in a 11. “Purse money is essential to the suc - the early years of the standardbred ranked order. Id. cess of the racing industry. Without stud book, only horses that could 3. Id. A ‘box’ can be placed around sufficient purse money, horsemen trot or pace a mile in a standard exotic bets such as the exacta, trifec - will race their horses elsewhere.” time (or whose progeny could do ta or superfecta, thus placing a bet Motion by Commissioner Caputo at so) were admitted to the book. They for all permutations of the numbers Racing Commission meeting of have proportionally shorter legs in the box. An exacta box with two June 20, 2012; Minutes at 19. than thoroughbreds and longer numbers, commonly called quinel - 12. See http://en.wikipedia.org/wiki/ bodies. Standardbreds generally la, is a bet on either of two permuta - Thoroughbred_horse_racing . These have a more placid disposition, suit - tions: A first and B second, or B first figures may be low. See J. Cooper, able for a horse whose races involve and A second. It costs twice the base “How Much Does It Cost to Own A more strategy and re-acceleration bet. A trifecta box, with six permu - Racehorse With A Thoroughbred than thoroughbred races, because of tations, costs six times the base bet. Partnership?,” suggesting $60,000 the admixture of non-thoroughbred

WWW .NJSBA .COM NEW JERSEY LAWYER | April 2013 19 blood in the breed. 27. See I/M/O the Veto by Governor 46. B. Finley, With Elite Monmouth The founding sire of today’s Christie of Racing Commission Meet, New Jersey Hopes to Make standardbred horse was Messenger, Minutes of June 29, 2011, 2012 N.J. Money by Spending Money, NY a gray thoroughbred brought to Super. LEXIS 186 at *6 (Veto Ruling) Times , May 18, 2010. America in 1788 and purchased by (approved for publication). 47. NJSEA press release, Nov. 22, 2010. Henry Astor, brother of John Jacob 28. Id . at **7-9. 48. Finley, supra, n. 46. Astor. From Messenger came a 29. Id . at **10-11. 49. Racing Commission meeting of great-grandson, Hambletonian 10 30. Docket number 072000. Dec. 20, 2011; Minutes at 22. (1849–1876), who gained a wide 31. Racing Commission meeting of 50. See M. Hegarty, Christie signs following for his racing prowess. June 20, 2012; Minutes at 23. horseracing subsidy legislation but The lineage of virtually all North 32. Racing Commission meeting of still holds veto power, Daily Racing American standardbred racehorses Aug. 15, 2012; Minutes at 6. Form , Feb. 2, 2011, at www.drf. can be traced from Hambletonian 33. Docket number A-5571-11T3. com/news/christie-signs-horserac - 10’s four sons. http://en. 34. See NJSEA press releases of Aug. 11, ing-subsidy-legislation-still-holds- wikipedia.org/wiki/Harness_racing 2011 and Dec. 22, 2011. veto-power. #Races . 35. See Racing Commission meeting of 51. NJSEA press release, Nov. 10, 2011. 17. A stakes race is a horserace in which Dec. 20, 2011; Minutes at 9-15, and 52. Id . the prize offered is made up, at least NJSEA press release of Dec. 27, 2011. 53. Hanson Report at 4. in part, of money (as entry fees) put 36. NJSEA Signs Terms for Leasing of 54. Report of the Governor’s Advisory up by the owners of the horses to New Commission on New Jersey Gam - entered. Merriam-Webster’s Collegiate Jersey Thoroughbred Horsemen, Mon - ing, Sports and Entertainment, July Dictionary, 11th Ed. mouth Park News & Stats , March 1, 21, 2010 (Hanson Report); available 18. N.J.S.A. 5:5-156(d). 2012. www.monmouthpark.com/ at www.nj.gov/governor/news/ 19. See Star-Ledger, Nov. 23, 2004, Edito - News.aspx?id=5743 (NJSEA Signs reports/pdf/20100721_state_docu - rial at p. 18. Terms). ment_final2.pdf. 20 . See P. L. 2008, c. 12, sec. 3: “This 37. See J. Burd, Sports authority 55. Id. at 20 act...shall become operative upon approves racetrack contract with 56. Id. the certification by the chair of the Gural, NJBiz.com, Dec. 23, 2011. 57. Id. at 22. Casino Control Commission to the 38. See T. Luicci, Monmouth Park gets a 58. Id. at 23. State Treasurer that an agreement new lease on life thanks to Thor - 59. Racing Commission meeting of has been executed between the New oughbred Horsemen’s Association, Sept. 15, 2010; Minutes at 7. Jersey Sports and Exposition Star-Ledger , March 1, 2012; and 60. Racing Commission meeting of Authority and the Casino Associa - NJSEA Signs Terms, supra , n. 36. Dec. 20, 2011; Minutes at 22. tion of New Jersey for the benefit of 39. NJSEA Signs Terms, supra , n. 36. 61. NJSEA press release of Nov. 10, the horse racing industry, for 40. Racing Commission meeting of 2011. $30,000,000 annually for a three- June 29, 2011; Minutes at 12. 62. T. LaMarra, “Officials see Mon - year period.” See N.J.S.A. 5:12-38a, 41. T. LaMarra, Officials See Monmouth mouth meet as Starting Point,” 5:12-144.2. Meet as Starting Point, at Bloodhorse.com, Oct. 10, 2012, at 21. N.J.S.A. 5:12-223(a). www.bloodhorse.com/horse-rac - www.bloodhorse.com/horse-rac - 22. Motion by Commissioner Caputo at ing/articles/73419. ing/articles/73419/officials-see- Racing Commission meeting of 42. P.L. 2010, Ch. 18, Sec. 1 (approved monmouth-meet-as-starting-point. June 20, 2012; Minutes at 21. May 22, 2010). 63. Id. 23. See n. 21. 43. T. Luicci, State’s cure for horse rac - 64. J. Albright, Christie doesn’t want 24. N.J.S.A. 5:5-22.1. ing calls for tripled purses, fewer competition for AC casinos, Jersey 25. See , e.g ., N.J.S.A. 13:18A-5 racing days at Monmouth Park, Star- Journal, Aug. 23, 2012; see (Pinelands Commission) and Ledger , Feb. 25, 2010. See www.nj.com/ hudson/voices/index N.J.S.A. 5:9-9 (State Lottery Com - www.nj.com/sports/njsports/index. .ssf/ 2012/08/capital_clips_christie_ mission). ssf/2010/02/monmouth_park.html. doesnt.html. 26. Racing Commission meeting of 44. Id . 65. The permit holder at Monmouth June 29, 2011; Minutes at 12-13. 45. Id . Park is obliged to pay NJSEA 10 per -

20 NEW JERSEY LAWYER | April 2013 WWW .NJSBA .COM cent of its net operating profits from the Woodbridge OTW beginning on the second anniversary of the ground lease. See NJSEA Signs Terms, supra , n. 36. 66. T. Luicci, Positive changes for Mon - mouth, Star-Ledger , May 9, 2012 at 44. 67. See NJSEA Signs Terms, supra , n. 36. 68. P.L. 2011, c. 228; N.J.S.A. 5:5-186; see also J. Burd, Off-track wager pol - icy is called off base in suit, NJBiz.com, June 18, 2012 at www.njbiz.com/article/20120618/N JBIZ01/120619887. 69. See T. LaMarra , supra, note 51. 70. J. Meggitt, Horsemen take reins at Monmouth Park, News Transcript , May 23, 2012. 71. When the Racing Commission approved the privatization of the Meadowlands Racetrack in Dec. 2011, the motion as read by the executive director stated, “While the Racing Commission’s approval here today can provide the harness industry with the equivalent of a ‘shovel,’ it is up to the impacted industry parties to collectively use that ‘shovel’ to construct the road to recovery for the racing industry.” Minutes of Dec. 20, 2011 at 10.

Kenneth F. Oettle is senior counsel at Sills Cummis & Gross P.C. in Newark, and handles complex commercial litigation and a range of administrative matters with an emphasis on gaming law. He has authored articles on the financial stability of New Jersey casinos and the qualification require - ments for institutional investors under the New Jersey Casino Control Act, and is a trustee of the International Association of Gaming Advisors (IAGA).

WWW .NJSBA .COM NEW JERSEY LAWYER | April 2013 21