Governor Chris Christie moved forward with his commitment to making horse racing in New Jersey a self-sustaining industry by signing legislation to expedite the establishment of off-track wagering facilities in New Jersey. Another step forward comes early next week, when the New Jersey Sports and Exposition Authority will issue a request for proposals to bring a long-term solution to Monmouth Park through private operation.

On December 17, 2010, Governor Christie announced a break-through agreement to end public subsidies of operations and purses for Standardbred racing at the Meadowlands Racetrack through the lease of that facility to the Standardbred Breeders and Owners Association (SBOA). Governor Christie is looking forward to similar progress with Monmouth Park and Thoroughbred racing there with the RFP for a private operator.

“We were successful in the Meadowlands, and we can do the same for Monmouth Park to the benefit of New Jersey taxpayers,” Governor Christie said. “I want to see a vibrant but self-sustaining horse racing industry in New Jersey, but that can be accomplished without tens of millions of dollars in taxpayer subsidies every year.”

Assembly Bill 1705, which Governor Christie conditionally vetoed on January 31 and the Legislature subsequently amended to include the Governor's recommended changes, removes barriers to the establishment of OTWs by permitting persons other than racetrack operators to run OTW facilities, making OTWs a permitted use in all municipal land use zones, and increasing the accessibility to liquor licenses for OTW operators.

Despite enactment of an original OTW law nearly a decade ago, only three of the 15 facilities allowed by law were established. Governor Christie’s conditional veto was necessary to preserve the NJSEA’s ability to transfer licenses in connection with the sale or lease of the state’s racetracks. It also eliminated a 1 percent fee on OTW operators, but expressly noted that the Administration will work with the Legislature to find an alternative source of revenue for OTW host municipalities

“Since its inception, off-track wagering has proven popular with horse-racing enthusiasts and has helped bring the excitement of race day to communities without the infrastructure for their own racetracks,” said Senator Sarlo, D-Bergen, Essex and Passaic. “Every year since they’ve been in operation, OTW parlors have been a proven economic success story, posting profits while other facilities are awash in red ink. This new law will help boost OTW development and create a new economic tool to help foster sustainability in New Jersey’s ailing horse-racing industry.”

The bill, S-1980, makes various changes to the State’s “Off-Track and Account Wagering Act,” to ensure that off-track wagering (OTW) facilities are being built in New Jersey. Under the previous law governing off-track wagering, the New Jersey Sports and Exposition Authority and private racetracks were permitted to develop 15 (OTW) parlors throughout the State. Under Senator Sarlo’s bill, the 15 current permit holders will have to show progress by January 1 2012, or those permits will revert to the horsemen organizations, and if the horsemen organizations cannot show progress, the permits will go to the open market, to allow any private investor to bid on the development rights for those facilities.

The bill was approved by the Senate in November and received final legislative approval by the Assembly in December, before receiving a conditional veto by the Governor. The Legislature complied with the Governor’s conditional veto to clarify that negotiations concerning the transfer or assignment of off-track wagering licenses in the event of a potential sale or lease of a racetrack would constitute progress for the purposes of the bill; eliminate a proposal to allow municipalities to collect a one-percent tax on the proceeds of OTW facilities within their borders; and permit the New Jersey Racing Commission a level of flexibility to adopt emergency regulations to make it easier to develop an OTW facility.

“Since New Jersey enacted the OTW law in 2001, only three of the planned 15 facilities have been built,” said Senator Sarlo. “While I recognize that difficult economic times make it harder for investors to front capital for projects, off-track wagering is a proven economic engine, and could be used to bring New Jersey horse-racing back from the brink of extinction. It’s time that we break the logjam of development on OTW parlors and start promoting this tool to help bolster our horse-tracks around the State.”

The version of the bill concurring with the Governor’s conditional veto was approved by both houses earlier this month.