03/04/2010 12:00AM

New Jersey plan: high risk, high reward

Email

Horsemen and racetracks in the Northeast are anxiously waiting to hear whether the state of New Jersey plans to press forward with a plan that would triple purses at Monmouth Park during a boutique 50-day race meet this summer, a high-risk proposal that could have dramatic effects on the racing landscape.

Although the plan is subject to change and may not even be implemented, many New Jersey officials who support the proposal call it a potential "revolution." Under the proposal, Monmouth Park would offer $1 million in purses each day - tops in the U.S. - while holding live racing only on days the track can expect to draw thousands of casual customers from the throngs that surge to the Jersey Shore during summer Fridays, Saturdays, Sundays, and holidays. The meet would run from late May until Labor Day and most significantly affect meets at Belmont Park and Saratoga Race Course by drawing horses from the two New York tracks.

The proposal underlines dramatic changes taking place in Thoroughbred racing as a result of precipitous drops over the last 18 months in handle, purses, and the foal crop. To stand out on a national landscape cluttered with racetrack-casinos offering subsidized purses and extended live meets, many racing officials say, non-subsidized tracks will have to adopt plans similar to the Monmouth Park proposal, even if it means disrupting traditional circuits.

"We need to figure out ways for horseracing to survive, and not only to survive, but ways for horseracing to thrive in New Jersey," said Tom Swales, the president of the Thoroughbred Breeders' Association of New Jersey, an organization involved in the negotiations over the 2010 Monmouth Park meet. "This is one avenue."

Critics of the plan contend that local horsemen who have relied on a nearly year-round, five-day-per-week racing calendar will be squeezed out and have to seek opportunities for cheaper stock on other circuits, most likely in Pennsylvania, where subsidies boosted total purse distribution in 2009 to $115.2 million, third-highest in the U.S. More problematic, the purses at Saratoga - the upstate New York racetrack that offers the country's richest purse structure and advertises itself as "the summer place to be" - would be eclipsed by those at Monmouth.

"I don't know how in the world you are going to tell an owner with a good 2-year-old that he should race for $40,000 in New York when they're running for $75,000 or $80,000 in New Jersey," said Rick Violette, a New York-based trainer who is the president of the New York Thoroughbred Horsemen's Association.

It is unclear how New York might respond to such a threat, and officials of the New York Racing Association did not immediately return phone calls.

The Monmouth proposal couldn't come at a worse time for New York. Although New York legislative leaders have picked an operator for a slot-machine casino at Aqueduct that could boost purses to Monmouth-like levels, the process continues to be beset by controversy, and a casino is not expected to be running until late 2010, at the earliest. In addition, New York City Off-Track Betting Corporation has filed for bankruptcy - with a $15 million debt to NYRA unpaid and OTB leaders contend that it must cut its payments to the racing industry to reorganize as a viable company.

According to officials, the Monmouth plan is being pushed aggressively by Gov. Chris Christie and his staff. Last year, under a previous administration, the state balked at providing the financial guarantees to support the $50 million purse outlay, but the state has now indicated it is willing to provide the guarantee, if only on a one-year basis.

According to one participant in the negotiations, who spoke on the condition of anonymity because of the sensitivity of the issue, the broad outlines of the meet have been generally accepted. The participant said early last week that an announcement regarding the meet would come in the next few weeks. Any plan would need the approval of both houses of the state legislature because of a law that guarantees horsemen 141 live racing dates a year through 2016. In addition, the state's rank-and-file horsemen have not yet signed off on the plan.

Last year, purses totaled $30.7 million for a 93-day meet at Monmouth, approximately $330,000 each day. Under the new plan, officials said, maiden special weights - both open races and races restricted to New Jersey-breds - would offer purses of $80,000, the highest in the country. First-level allowance races would also offer $80,000. Second-level allowances would run for $85,000, third-level for $90,000. Overnight stakes would offer $120,000.

The 50-day meet, with 12 races a day, would be followed by a more traditional 21-day meet at Monmouth, starting in mid-September, with racing only on Fridays and Saturdays and purses averaging $250,000 to $300,000, according to officials. There would be no Thoroughbred meet at the Meadowlands.

Bruce Levine, a New York-based trainer who led the trainer standings at Monmouth last year with 46 wins, said he was ambivalent about the proposal. On one hand, he said, he welcomed the larger purses, but he also acknowledged it's going to be far more difficult to win races this year, with top-class horses shipping in from other circuits, especially New York. In addition, Levine said trainers cannot lower expenses the way racetracks can, by cutting days from their schedules.

"My horses have to eat, my people have to care for them, so it's going to be hard on the local guys," Levine said. "It's not like my guys aren't going to be employed on dark days. I'll still have those expenses."

According to officials, Monmouth's racing office would attempt to mitigate the impact on local horsemen by giving preference in races to trainers who are stabled on the grounds. Still, with purses at such high levels and so few racing opportunities, races could quickly become filled, leaving horses waiting to race.

Sal Sinatra, the racing secretary at Philadelphia Park Casino and Racetrack, said his track would almost certainly benefit from a proposal to shorten the meet at Monmouth and prop up the purses.

"I'm just an outsider looking in, but if a race doesn't fill, a guy can't wait four or five weeks for the next [condition] book to come out," Sinatra said. "He's going to find someplace to race. And that would probably mean more entries over here."

Breeders in New Jersey are excited about the proposal, and it's hard to see why they would be opposed. In 2008, the crop in New Jersey was 286 registered foals, according to the Jockey Club. But despite that paucity - a mere 0.9 percent of the North American foal crop - the Monmouth proposal would guarantee an average of 2 1/2 races per day restricted to New Jersey-bred horses.

Parties involved in the negotiations emphasized the plan would be conducted only on a one-year experimental basis. In part, the unwillingness to commit any longer is because of the risk of the meet turning into a financial disaster. New Jersey, like nearly every other state, is already struggling with a budget deficit.

For comparisons, Saratoga Race Course needed to draw an average of $14.5 million in average daily all-sources wagering to fund an average daily purse level of $723,000 - and that figure was only possible by using funds generated during winter racing to prop the numbers up (the figure also includes breeders' awards). Monmouth Park had average all-sources handle last year of $3.1 million and would probably need to draw, conservatively, $20 million in all-sources wagering each day to justify the $1 million per-day purse outlay.

The rewards, however, could be significant. Overnight, Monmouth Park could become the center of the summer racing world and a place for handicappers to focus their bankrolls and for fans to keep an eye open for the sport's next superstar. As one participant in the negotiations said: If New York is scared, well, it should be.