Updated on 06/23/2011 6:47PM

Monmouth Park lease agreement reached, needs governor's signature

Bill Denver/Equi-Photo
Jon Forbes, the president of the New Jersey Thoroughbred Horsemen's Association, said on Thursday he was looking for "continuity"on the New Jersey racing circuit.

Morris Bailey, a New York real-estate developer who owns an Atlantic City casino, has reached agreements with New Jersey horsemen and state officials that will allow him to lease Monmouth Park for the next five years if the deals are approved by Gov. Chris Christie, several officials, including Bailey's attorney, said on Thursday.

The deals were reached late on Tuesday night after a marathon negotiating session, according to officials who participated in the talks. Under the deals, Bailey has agreed to run at least 71 days a year at Monmouth Park for the next five years and has guaranteed over that time frame an average daily purse distribution of $400,000, a figure far exceeding the track's historical level of purses.

Ron Riccio, Bailey's attorney, said on Thursday that the deals included agreements with the New Jersey Thoroughbred Horsemen's Association; the New Jersey Sports and Exposition Authority, the state agency that owns Monmouth; and Jeff Gural, a New York real estate developer and racetrack owner who has been tabbed by the state to lease the sports authority's Meadowlands, a harness track.

The lease will allow Bailey to control all of the operations at Monmouth Park for at least five years, and it includes "multiple" 10-year renewal options, Riccio said. Under the deal, Bailey will be required to pay for the upkeep of Monmouth.

Christie, whose office participated in the negotiations, is expected to approve the deals. The two tracks were put out to bid to potential leaseholders earlier this year, at Christie's direction.

Jon Forbes, the president of the New Jersey horsemen's group, said on Thursday that the deals would finally bring some "continuity" to the New Jersey racing circuit after more than six months of uncertainty surrounding the status of the meet and amid threats by Christie to close the track if leaseholders couldn't be found.

"We can't say that the future is certainly bright, but we're very optimistic," Forbes said. "It helps a lot to know where we'll be for the next five years."

If and when the agreements are approved, Bailey will begin the process of establishing locations for as many as five new offtrack betting parlors in the state, according to Riccio. Under the deal, Bailey received five unused licenses for OTBs, as well as an existing offtrack betting site in Woodbridge.

Bailey also will receive half of the authority's 70 percent share of a statewide account-wagering system. The other half of the 70 percent share will go to Gural, Riccio said. The remaining 30 percent share is owned by Freehold Raceway, a harness track in the state co-owned by Greenwood Racing and Penn National Gaming Inc.

With the exception of last year - when Monmouth used a $19 million subsidy to boost purses to $800,000 a day during an abbreviated meet - purses at Monmouth have typically averaged approximately $330,000 a day. But Monmouth and the Meadowlands combined have usually conducted at least 141 live days of racing each year, stretching interest in the Thoroughbred product thin.

Negotiations over the deals have taken place over the last two months. In the past week, both Bailey and Christie threatened to walk away from the negotiations, according to participants, but both sides were convinced to return to the bargaining table.

"It wasn't so much a matter of being contentious as it was a matter of being complex," said Riccio.

The deals with Gural pertain to the splits of revenue from cross-breed simulcasting and from account-wagering. Riccio said the deals generally allow Thoroughbred horsemen to retain approximately 65 percent of the handle from simulcast bets, even though 85 percent of the handle on imported signals in New Jersey is on Thoroughbred races.

"We recognize that they rely on selling Thoroughbred bets to survive," said Forbes, referring to Standardbred interests. "We want them to survive, and we need to coexist."