The leadoff speaker was Jon Hanson, Chairman of the Governor's Gaming, Sports and Entertainment Advisory Commission. Hanson reviewed the charge of that group, which started work last year at the behest of then newly elected Governor Chris Christie. Hanson, along with fellow Commission member Robert Mulcahy, who is also a past CEO of the New Sports and Entertainment Authority, Chris Woronka of Deutsche Bank and Dr. Karyn Malinsowksi of Rutgers' Equine Science Center, also participated.

Hanson reviewed the charge and results of the Commission's findings, which included stronger oversight and financial assistance to Atlantic City for marketing and infrastructure changes to expand appeal of the seaside gambling resort. "The Governor's charge was to get the Sports Authority out of the profit and loss business," he said. "That's not the proper role of government and that's the direction we're moving in."

Hanson noted the large volume of business Atlantic City has lost to the "daytripper" business in other states and noted that the casinos worked very hard to keep visitors inside the building and thus, the cachet of the town never developed like that of Las Vegas.

Robert Mulcahy spoke to the outcome of the Commission's work, bills that will both decrease what he called outdated forms of regulation and the creation of a tourism district to, "somehow get control of what was happening in marketing and development and make a plan that meshed."

Tom Carver, former Executive Director of the NJ Casino Reinvestment Development Authority (CRDA), noted that the casinos in Atlantic City have long been hampered by a city structure that, "just doesn't function. Simple as that. They can't progress without the direct involvement of the state of New Jersey." Carver noted that several years ago the CRDA set aside $3 million for upgraded equipment, such as in car computers and crime tracking, for the police department. To date that money has not been spent because the Police Department did not change procedures.

Dr. Malinowski reviewed the role that horse racing plays in supporting open space and other equine related industries in New Jersey, the most densely populated state in the United States. Standardbreds outnumber Thoroughbreds by a 2:1 margin in the state and overall horses in the New Jersey have a $1.1 billion economic impact. Equine related assets, most of them racetracks, training centers or large farms, account for $4 billion in equine related assets.

Malinowski noted that there are 13,000 equine-related jobs in New Jersey, 7,000 of them directly related to racing. Overall, about 222,000 acres in the state are supported by the horse industry and 30% of the agricultural land is being used in an equine related function. She also reviewed numbers of horses bred in neighboring New York and Pennsylvania, both states where casino operations and tracks work together. New Jersey is falling by about 30%, while Pennsylvania and New York are both on steep and steady upswings.

The presence of New Jersey license plates on cars at Pennsylvania racinos was also reported by Malinowski. One sampling showed as many as 24% of license plates at the Sands Casino in Bethlehem, Pennsylvania from New Jersey, about 31% at the former Philadelphia Park and 15% at Harrah's Chester.

Jeff Gural, the real estate executive who also operates Vernon and Tioga Downs and is negotiating to lease The Meadowlands, was optimistic, "Today's the deadline," noted Gural, " but I think in another two weeks we'll either have a deal or call it a day. We need to deal with the unions. It's not easy for their leaders to tell members they're getting a wage and benefit decrease. For The Meadowlands to survive, others must make concessions.

"I'm reasonably optimistic, I've spoken to quite a few tellers and I have to say most have been supportive. I did tell one woman, ‘We're putting up $100 million of assets, does that count?' ‘Not really.' So there's two extremes. But I'm meeting with two major investors and by the end of the day tomorrow, we should have in place a verbal commitment."

Gural noted that racing's business model has changed since The Meadowlands opened, and noted that many customers do not visit the track, but rather bet by computer or at an OTB facility. He characterized as, "horrible, terrible, catastrophic," the practice of operations that collect bets from racing fans, provide rebates, but do not contribute to the overall upkeep of a track. "I don't know if it can be undone or if we have the will, but it makes no sense."

He noted that with Tioga, an operation that started from scratch, "there were no old customers." He described their success in bringing fans to the track, though it has been difficult to make them more then small bettors. Gural declared, "I can get people to come to The Meadowlands and make it a fun thing. Make the food affordable, don't gouge people, make it edible, that will also help. I figure it costs $2,000 for a family to go to a Jets game vs $50 for the races.

"There are 750,000 people within 50 miles of Tioga and no old customers. The Meadowlands has 20 million people within 50 miles. I have a great partner in Lee Amatis at Cantor Gaming. He has great ideas and wagering formats to make it a fun thing and you don't need program. We'll try everything possible to see what works or what doesn't."

Suzette Parmley, gaming writer for the Philadelphia Inquirer, has covered both Atlantic City and Pennsylvania gambling closely and also formerly covered the administration of New Jersey Governors McGreevey and Whitman. She noted that the two states have largely been the inverse of each other, with horse racing and gambling rising in Pennsylvania, which has a blended business model of tracks and casinos and New Jersey, with the opposite model, falling.

Parmley noted that 2006 was a "peak year" for Atlantic City, with 5.2 billion in revenue at the casinos, but Pennsylvania was "not on their radar." Since November of 2006, when the first Pennsylvania casino operation started, the 5.2 billion in revenue has fallen to $3.6 in four years. "By the end of next year," Parmley said, "the ten casinos in Pennsylvania can surpass Atlantic City revenue. She noted that the Pennsylvania casinos will have managed to do that in five years, against a 25 year history of gambling in Atlantic City.

Parmley also noted that Atlantic City's 17,000 hotel rooms fall far short of the 25,000 room mark that is necessary for, "serious, major conventions to come to Atlantic City, where over 50% of the business is done in three summer months."

Jim Simpson, President of Hanover Shoe Farms, recalled the history of horse racing and casinos working together to bring a coordinated casino operation to Pennsylvania. "Both sides were on life support," he noted. "I don't see why so much push back [in New Jersey]. Slots passed by one vote [in Pennsylvania] at 2:30 in the morning, but we've had no opposition to the $2 billion in property tax relief. Pennsylvania proves that harness, Thoroughbred and casinos can work together. Just look across the border. We have a model that's working."

by Ellen Harvey, HRC

Courtesy of the US Trotting Association's Web Newsroom