ASBURY PARK PRESS OP-ED
SEPTEMBER 25, 2007 — The Sept. 16 op-ed piece "Do or die time for state's racetracks" contained incorrect information relative to the $86 million that Atlantic City's casinos are paying to subsidize horse racing in New Jersey.
The agreement that calls for those payments expires at the end of 2008, not in 2007, as the commentary stated. Under that agreement, the casino industry already has provided $63 million and soon will make a final payment of $23 million. The news that funds are not available to subsidize purses in 2008 is a surprise to us. If this is indeed the case, an audit is in order to determine where the funds have gone. Has the remaining $23 million payment already been spent?
Under the agreement, all of the subsidy funds were required to be placed in a segregated, interest-bearing account so they could be tracked and all parties to the agreement could be certain they were spent in accordance with the terms of the agreement. However, the funds were not placed in a segregated account; therefore, we cannot be certain how they were spent. Apparently, these funds weren't allocated to ensure purses would be subsidized through 2008, as we had expected.
The casino industry is being asked to provide subsidies to help the horse racing industry survive. As such, isn't it reasonable for us to ask the horse racing industry to do its part as well? In New York, for example, almost 80 percent of wagering on horse races has occurred at off-track wagering facilities. This is a significant source of additional revenue for horse racing that easily could exceed the subsidy being sought from casinos.
Why then has only one of the 15 off-track facilities authorized by the Legislature in 2001 been opened? Why did it take six years for that lone facility to open its doors? Why has there been a similar delay in the implementation of account wagering?
We understand the intent of the purse subsidy is to help the New Jersey horse racing industry. Yet our review of races in New Jersey indicates substantially more than half of the top three finishers in New Jersey horse races are owned by out-of-state interests. Because our subsidy funds were not segregated as required, we cannot know how much of the subsidy we provided was used to pay prizes to New York, Pennsylvania and Delaware horses.
The bigger question that should be asked is: Why must the casino industry subsidize horse racing at all? Casinos cannot be blamed for horse racing's economic problems. Tracks in states that have no legal casinos are suffering the same declines in attendance. The subsidy provided over the last four years has not helped improve attendance or generate on-track wagering at New Jersey's horse tracks. Yet we are being asked to continue to provide subsidies. What would future subsidy payments realistically accomplish?
We will continue to participate in all such discussions and would welcome a fair solution to solving problems we did not create. However, it is reasonable for us to insist the horse racing industry comply with the terms of any agreement and be held accountable for how the subsidy funds are spent. The horse racing industry should be held accountable for doing its part to generate revenues for purses. The casino industry should be given assurances that any and all subsidies we provide are used to support only New Jersey's horse racing industry and not the horse racing industries of New York, Pennsylvania, Delaware or any other state.
Casinos must abide by strict, transparent reporting rules for our operations. We support those rules as necessary. We believe those same rules should apply to the subsidies we provide.
Joseph A. Corbo Jr. is president of the Casino Association of New Jersey, Atlantic City.
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