In New Jersey, What a Difference a Year Makes

As March approaches, there's a new feeling throughout the New Jersey Thoroughbred racing industry for this time of year.

Last March, there was merely hope that the Supreme Court would rule in New Jersey's favor and pave the way for sports betting in the state. Prior to that, the early months of the previous few years featured widespread gloom as handle, purses, and racing dates shrunk while New Jersey found nothing frustration in its search for an alternative source of revenue.

But now there's optimism. Lots of it.

With sports betting in place and $10 million in annual purse subsidies from the state ready to kick in, there's the kind of enthusiasm for the upcoming Monmouth Park meet that promises to rejuvenate racing at the Jersey Shore.

"Since the state got out of racing and privatized it and the horsemen took over (in 2012) there was always nervous energy in the industry about how long we could last," said Dennis Drazin, chairman and CEO of Darby Development, which operates Monmouth on behalf of the New Jersey Thoroughbred Horsemen's Association. "Now with the purse subsidies and sports betting, those fears are gone and I'm happy to say Monmouth Park is on solid footing and the future is rosy. The industry is going to survive for decades to come."

The renaissance of New Jersey racing started May 14 when the United States Supreme Court overturned the Professional and Amateur Sports Protection Act. The decision brought an end to a lengthy legal battle fought by Drazin and Monmouth Park and allowed sports betting in the state.

A month later, the first sports bet was booked by Monmouth and its sports betting partner, William Hill, and by year's end, roughly $1.25 billion was wagered throughout the state, according to Drazin.

"I said New Jersey would take in a billion in the first year and people laughed. By the end of December, we were up to $1.25 billion," Drazin said. "At Monmouth, sports betting has been terrific. It's everything we expected."

The newest chapter in Monmouth's comeback tale was finalized Feb. 14 when Governor Phil Murphy signed into law a bill that provides Monmouth with $10 million in Thoroughbred purse enhancements for each of the next five years.

"The subsidies are a great help. The money is wonderful and meaningful for the New Jersey racing industry, and it's great that we have a governor in Phil Murphy and leadership in the state Senate and Assembly that support racing. We're no longer living in the (Governor Chris) Christie years (2010-18) when he did nothing for us," Drazin said. "Everything is positive, but having said that, when you compare it to what surrounding states are getting, it's a start, but it's not the end of what we need. It's something we need to build on. Racetracks in other states still get more from alternative revenue."

As a result of the financial stimulus from sports betting and the purse subsidies, the upcoming Monmouth meet will increase to 61 dates after a 52-day session last year. The season will start May 4 at the Oceanport, N.J., facility and run through Oct. 27. Typically, there will be three days of racing a week (Friday through Sunday), though October will feature racing only on Sunday to coincide with wagering on National Football League games. 

Additionally, there will be seven, all-turf afternoon cards at The Meadowlands on Fridays and Saturdays from Oct. 4-26. There also be one turf-only card at Far Hills Oct. 19.

Drazin expects average daily purses of $500,000, a big boost from the $308,431 offered at Monmouth and The Meadowlands (Thoroughbred meet) last year. As an example of what that means for horsemen, Drazin said the purses for maiden special weight races are likely to rise from $36,000 to $45,000.

"What's not to love about what's going on?" said trainer Jason Servis, an NJTHA board member. "We went through a couple of rough years with no money. It was a long fight to get the sports betting and I'm so happy for Dennis because he put his heart and soul into it, 150%."

Attached to the subsidies is a stipulation that the state must see evidence of a boost in the racing industry, such as increased handle or an upturn at breeding farms, or it can come to an abrupt halt.

"The big bonus for us is the governor and the legislature giving us the purse subsidies for five years. While we have to meet some benchmarks, what it tells breeders is that there's a bright future. If you bring a mare to New Jersey this year by the time that foal gets to the races you can take advantage of those increased purses," said Drazin, whose racing stable includes the homebred Sunny Ridge, the New Jersey-bred Horse of the Year for 2018 trained by Servis. "New Jersey-bred maidens will be racing for about $58,000-$59,000 and you're competing against less horses. It gives you a good chance to win all of your state-bred conditions and make your money back on a foal, and as a result, we're getting a lot of calls about people wanting to move their mares here. There's already been a positive impact."

Drazin said that in an effort to provide more support for the New Jersey breeding industry, which has seen the number of registered New Jersey-breds drop from 454 in 1996 to 79 in 2016, there will be a 40% purse bonus for state-breds who win or place in open company.

"We have to do what we can to increase the handle so the state gets their money and they stay on board with us," Servis said.

Higher purses can lead to bigger fields and increased wagering, and betting on sports figures to play a key role in providing a lucrative cash flow for Monmouth.

According to statistics provided by New Jersey's Division of Gaming Enforcement, Monmouth's revenue for sports betting was $2.3 million in December and slightly more than $2 million in January. The state divided Monmouth's January revenue as $830,792 wagered at Monmouth Park and another $1,171,980 bet online, but that does not include revenue from food and beverage at the racetrack.

"Sports betting keeps growing," Drazin said. 

February figures will include wagering on the Super Bowl, which set a new standard at Monmouth for betting on a single sporting event. Yet those mountains of cash wagered on the New England Patriots' win over the Los Angeles Rams Feb. 3 did not help Monmouth's bottom line. Unlike pari-mutuel wagering at a racetrack, where money is taken out of each wager, in sports betting the house can lose money if too many bettors flock to the winning side—which happened in the Patriots' 13-3 victory.

Thanks to quarterback Tom Brady's sixth Super Bowl win, Monmouth lost about $17,000 on the game.

"Crowds come to Monmouth because of the sports betting. They help to increase the racing handle and the sports betting is all new revenue for us. It's been very positive, but you don't win every day. People have the wrong impression if they think we win all the time. We're taking a risk and William Hill is doing a very good job of managing that risk," Drazin said. "You win most days. There were very few times we lost, but the books took a hit on the Super Bowl. It was our highest volume day and thankfully we managed our risk well. We lost only $17,000 while some books lost millions. There was a loss of over $4 million in New Jersey on the game. We did very well throughout the football season but a lot of people bet New England and they were rewarded."

One change in the 2019 New Jersey racing season that had nothing to do with sports betting involved Monmouth's signature race, the $1 million TVG.com Haskell Invitational (G1). The 1 1/8-mile test was moved forward a week to Saturday, July 20 so that it can be aired on NBC.

"We would have preferred to leave the Haskell where it was, but we were advised that in order to stay on NBC Sports that's where we had to go," Drazin said. "We believe that in order for Monmouth to maintain a world-class position, it's critical to have NBC coverage of our major event."

Looking into the future, New Jersey racing could very well have a different look next year as Drazin is focused on a 2020 schedule that would include 50 days at Monmouth and then 20 days of dirt and turf racing at night at The Meadowlands. Currently there is only turf racing for Thoroughbreds at The Meadowlands because of the configuration of the oval for harness racing, though, from 1977 until 2009 there was dirt and turf racing for Thoroughbreds at the East Rutherford, N.J., racetrack. 

"I believe The Meadowlands is a very viable night signal if you handle it properly, and it would be very popular across the country. There's not a lot of quality out there at night now. I'm not trying to be critical of anyone, but we can bring it to a higher level of quality," Drazin said. "In order to do that, you have to turn over the racetrack. You can't have an all-turf meet there where every time it rains you have to cancel. So, in our discussions with Jeff Gural, who operates The Meadowlands, he asked us for one more year of being able to utilize the track (for harness racing) and that we stay just on the turf this year. We'll add dirt racing next year."

While it's unlikely Thoroughbred racing at The Meadowlands will ever return to its glory days of the 1970s and 80s, when it attracted Hall of Famers such as Seattle Slew and John Henry, the prospect of an enhanced Meadowlands meet is most certainly another sign of the changing climate in New Jersey. After a long hiatus, good news finally appears to be in vogue again.