03/04/2008 12:00AM

New casino deal for N.J. tracks

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New Jersey legislators and the state's casinos have reached an agreement that will provide $90 million in casino subsidies for racing purses over the next three years, Gov. Jon Corzine announced on Monday night.

The agreement, which will prohibit New Jersey racetracks from operating slot machines over the three years of the subsidy, will require legislation in order to be enacted. Leaders of the state legislature were involved in the negotiations, and a bill putting the agreement into place is expected to be introduced soon, according to officials in Corzine's office.

Over the past four years, Atlantic City casinos had provided $86 million in subsidies to the racing industry in order to retain their state monopoly on slot machines. Without a new agreement in place, the racing industry was expected to lobby aggressively for approval to operate slot machines.

Three New Jersey racetracks hold significant meets: the Meadowlands in East Rutherford, just across the river from Manhattan; Monmouth Park on the Jersey Shore; and Freehold Raceway, a harness track in central New Jersey. The Meadowlands and Monmouth are both owned by the New Jersey Sports and Exposition Authority, a state agency. A fourth track, Atlantic City Race Course, holds a short spring meet.

The agreement does not designate how the money will be distributed, except to say that the funds will go to purse subsidies and breeder awards. In addition, the $90 million will be distributed in three annual installments of $30 million. All of the money will come from casino revenue in Atlantic City, the only city in the state that allows for casino-style gambling.

The exact distribution formula is expected to be part of the enabling legislation for the agreement. According to Corzine, both the assembly and the senate agreed to the broad terms of the deal during the negotiation process.

As part of the agreement, casinos will be given tax breaks on the awards of comps and promotions to customers. The casinos had previously paid state taxes on the value of the awards, but the agreement will allow the casinos to avoid the taxes when the value of the comps reaches a certain threshold.