- Per SB 2992, New Jersey sports betting shares profits with the state’s horse racing industry.
- The bill also granted the NJ horse racing industry an injection of $20 million over 5 years.
- It’s still too early to tell how helpful sports betting can be to the NJ Thoroughbred and Standardbred industries.
OCEANPORT, N.J. – On Friday, the New Jersey State Bar Association (NJSBA) hosted its annual Day at the Races event. The meeting, designed to focus on legal issues in the state horse racing industry, was held at Monmouth Park.
Last year, Monmouth Park made headlines by taking the first legal sports bet in New Jersey, when Gov. Phil Murphy put $20 on Germany to win the FIFA World Cup.
The NJSBA event was moderated by Monmouth Park CEO Dennis Drazin, who was recently inducted into the Sports Betting Hall of Fame for his role in bringing the industry to New Jersey.
Along with Drazin, former New Jersey senator Ray Lesniak was on hand to discuss the status of horse racing in the Garden State.
“Less than one year [after the PASPA overturn], sports bettors wagered more in New Jersey than in Nevada which had a virtual monopoly on legal sports betting for more than 20 years. It took New Jersey less than a year to overcome that more than 20-year advantage,” said Lesniak.
Lesniak also predicts that the state’s horse racing marketplace will grow healthier as a result of statewide sports betting. Per Lesniak, New Jersey’s horse racing industry was “in serious jeopardy before sports betting brought [it] back to life.”
While revenue data is available for New Jersey casino gaming and sports betting, raw numbers for racebook handle and hold are more difficult to nail down.
According to a 2019 Rutgers University report that compiled data from the years leading up to legal sports betting in New Jersey, the horse industry was indeed in bad shape.
“New Jersey racehorse owners, trainers, and breeders are still unable to compete with purse structures and breeder incentive programs that exist in neighboring states where racing is supported by alternative gaming. …
There is no way New Jersey racehorse owners and breeders can continue to remain competitive with New York and Pennsylvania based on the indicators of industry health…without assistance from other forms of gaming, the now legalized sports wagering, and or an appropriation from the State of New Jersey.”
Since the above was written (working largely off of data from 2014 through 2017), the changes to New Jersey sports betting laws have started to make a measurable difference.
In addition to the legislation that legalized sports betting in the state, another law – Senate Bill 2992 – was aimed directly at bailing out the beleaguered pony market. This bill, signed in February 2019 by Gov. Murphy mandates a series of horse racing subsidies.
Per SB 2992, horse racing concerns would receive a cut of sports betting revenue from each state-licensed book, along with $100 million in taxpayer funding. This latter windfall is scheduled to be paid out over five years at a rate of $20 million per year.
With that sort of financial injection, it’s obvious that the horse racing market in New Jersey is looking up. How much further it needs to go to break into consistent profitability is another matter, and the available data isn’t enough to make an educated guess.
Still, the Rutgers report did make mention of the potential relief that sports betting has provided to the horse racing industry:
“In anticipation of an increase in purse structure and breeder incentives due to revenue from sports wagering or an appropriation from the State of New Jersey, in 2019, there are already signs of investment in the horse breeding segment of the racehorse industry with an increase in the number of Standardbred stallions standing from 6 in 2017 to 15 in 2019.”
If nothing else, this shows that the private market has reacted positively to the current climate of horse racing in New Jersey, as bolstered by sports betting.
Whether or not sports betting can save the New Jersey horse racing industry remains to be seen. But the blinders are off, and the future’s looking brighter than it has in some time.
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News tags: Dennis Drazin | Gov. Phil Murphy | Horse Racing | Monmouth Park | New Jersey | New Jersey State Bar Association | New York | NJ SB 2992 | Pennsylvania | Ray Lesniak | Rutgers | Standardbred | Thoroughbred
Andy has been writing professionally for nearly two decades, with the last three years being dedicated to his primary passions: sports wagering news and gambling industry analyses. A walk-on punter, Andy has a particular interest in professional football, baseball, and horse racing betting. Come early May, you can always catch Andy – clad in all white, mint julep in hand – on Millionaires Row at Churchill Downs. In his dreams.