02/08/2012 3:40PM

New Jersey horsemen reach agreement to operate Monmouth

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The New Jersey Thoroughbred Horsemen’s Association will operate Monmouth Park next year under a lease agreement with the state-owned New Jersey Sports and Exposition Authority as long as final negotiations on the deal are complete by the end of February, the horsemen’s legal counsel said on Wednesday.

Under the proposed deal, Monmouth Park will run at least 51 live racing days at an average daily purse distribution of $400,000, according to Dennis Drazin, who has been conducting negotiations with the state on behalf of the NJTHA. Another six days will be run in the spring at the Meadowlands, which is also owned by the authority but is being leased by Jeff Gural, and another 14 days could be run in the fall either at the Meadowlands or in combination with Monmouth.

The agreement is likely to be structured substantially similar to a deal the sports authority reached to lease Monmouth to the New York real estate developer Morris Bailey last year. That deal was scuttled in December, when Bailey announced he was walking away from it, without specifying the exact reasons.

A spokesman for the authority said on Wednesday afternoon that the authority had no comment on the proposal.

The deal sought by the horsemen would run for five years, with three 10-year options for renewal that would be reserved to the horsemen, Drazin said. A fourth 10-year option could be exercised by mutual consent between horsemen and the authority.

The state has given the horsemen and the authority until Feb. 29 to work out the final details of the deal. Last year, Gov. Chris Christie vowed to sell off or lease both Monmouth and the Meadowlands, citing losses on the authority’s racing operations.

According to the state, Monmouth Park has lost tens of millions of dollars over the past several years. Late last year, the state said that if it could not find a leaseholder for the track, it would run 141 dates at Monmouth at an average purse distribution of $150,000 a day. Under that plan, the authority estimated that it expected to lose $8 million on Monmouth in 2012.

When asked whether horsemen were confident that a reduced schedule could erase that projected deficit, Drazin said “yes,” citing lower expenses for day-to-day operations and the horsemen’s plan to establish off-track betting facilities in the state by the end of next year, a plan that would generate additional revenue.

“I can’t say to you that purses will be at that high level [$400,000] this year when we get to the fall,” Drazin said. “Certainly during the 51 days at Monmouth we’ll have it. But for the fall days, if we can only pay less, so be it.”

The six-day spring meet at the Meadowlands will be conducted as dual cards with harness horses, Drazin said. Thoroughbreds will run during the afternoon, with harness races following that night. The fall dates could include a Thoroughbred-only meet run exclusively on the Meadowlands turf course, or additional dates at Monmouth.

During 2012, Drazin said, horsemen will explore other ways to raise revenue for Thoroughbred racing, including an examination of exchange wagering and whether Monmouth could install Instant Racing machines, a type of slot machine that uses races run in the past to generate random numbers to determine payouts. Instant Racing machines are in use at Oaklawn Park in Arkansas and Kentucky Downs in Kentucky.

Exchange wagering was legalized by the New Jersey legislature last year, largely due to the lobbying efforts of Television Games Network, which is owned by the British exchange-wagering pioneer Betfair.