Monmouth Park and the Case for Optimism
By Dan Montesano
Don’t write the eulogy for Monmouth Park- yet.
New Jersey’s only thoroughbred racetrack has found itself in the news much of this racing season for all the wrong reasons. A sharp decrease in purses, subpar racing, dwindling attendance and handle have been major points of discussion throughout the racing industry and on social media. Monmouth Park is in a precarious and potentially fatal position. The track is clearly struggling financially and with providing horseplayers with quality racing. All of which has led to the question that many horseplayers fear the answer to: Can Monmouth Park survive?
And the answer is – maybe.
How We Got Here
Prior to 2011, Monmouth Park had an agreement with casinos in Atlantic City in which the two sides agreed Monmouth Park would not pursue any video slot machines at its track in exchange for $30-million per year in subsidies. Monmouth Park used the money to supplement purses and remain competitive against other tracks in surrounding states that had implemented video slots at its racetracks.
However, in 2011, Gov. Christie ended the agreement between the track and casinos, stating horse racing in New Jersey must be a self-sustaining industry. Gov. Christie also oversaw the acquisitions of both Monmouth Park and the Meadowlands harness racetrack to private investors. The Meadowlands eventually went to Jeff Gural, who then built a new facility directly across from the original racetrack. Monmouth Park came under operation of Darby Development and The New Jersey Thoroughbred Horseman’s Association, led by New Jersey native and attorney Dennis Drazin.
Drazin began the slow and painful process of keeping Monmouth Park afloat financially while maintaining relevancy in the racing industry. Drazin and his group have done well to keep Monmouth Park open and attract a decent level of racing. In 2010, Monmouth Park allotted $54-million in purse money to be distributed during its meet. In 2016, the track has allotted just $20-million in purse money.
In 2015 — buoyed by the inclusion of Triple Crown Winner American Pharoah to its marquee event, the Haskell Invitational — the track enjoyed a record crowd of nearly 61,000 fans and record handle of $20-million. By all accounts, Monmouth hosted a great event and basked in positive media attention and praise. Still, even American Pharoah couldn’t help Monmouth turn a profit, as the track’s average daily handle for the meet was down about two percent from the previous year.
This year has been particularly difficult for Monmouth as several factors have played a significant role in the decrease of purse money and quality of racing. In 2016, Monmouth had to cut almost $2-million from its purse allotment, in addition to suspending the Grade-2 Monmouth Stakes entirely. Nearly $600,000 in stakes money was also cut from the budget. Additionally, the track eliminated eight non-graded stakes races from its summer schedule.
One reason for the reduction in purse money is Monmouth needed to come up with $4-million that went to partially repaying a loan from the state, an increase in its lease agreement to $250,000, as well nearly $2-million in taxes to the town of Oceanport, Drazin said in a www.app.com story back in March.
In addition to the drastic reduction in purse money available, yet another reason Monmouth Park is suffering has to do with competition from tracks from surrounding states that run their meets simultaneously. And many of the purses at those tracks are supplemented by casino revenue. Two of Monmouth’s biggest competitors are Laurel Park in Maryland and Parx in Pennsylvania. Each has received a commitment to its tracks and additional revenue from the casino industries. Further hindering Monmouth has been Gulfstream Park’s decision to have racing all year around, which has severely limited Monmouth’s ability to attract trainers and horses to New Jersey.
Aside from purse money being reduced and field sizes lowered, Monmouth Park is also suffering from an attendance issue. Consider Memorial Day Weekend of 2015 — typically one of Monmouth’s biggest weekends of the year with its food truck festival — when approximately 60,000 fans came to Monmouth Park over the course of the weekend. This year, attendance dipped to about 41,000. The reduction in attendance also led to a reduction in on-track handle, with 2016 being down about 33-percent compared to last year.
In taking into account the wide-ranging factors that have caused 2016 to be such a tumultuous year thus far for Monmouth Park, the question remains whether it can survive. While Drazin has been steadfast in his assertion that horse racing in New Jersey is here to stay and will be for the foreseeable future, many (including always-vocal horseplayers) are left wondering how long Monmouth can last. And if Monmouth does survive, how long will it be until it gets better?
Despite barely remaining financially afloat, there is reason for optimism. Monmouth has attempted to make the on-track experience better for its fans. Blu Grotto, an upscale Italian restaurant as well as outside decks with a beer garden over looking the top of the stretch is an effort to attract fans who want a fine dining experience. The track also added an “Ask me how to bet” tent on its grounds. This area is staffed by volunteers who are there to assist new fans in making selections and wagers. Although parking, admission and food costs still remain a sore spot with guests, Monmouth literally needs just about every dollar it can get.
While these additions may not seem like cornerstones for the turnaround of Monmouth, they should not go unnoticed. The criticism of Monmouth Park on social media has been mostly fair, but many longtime New Jersey horseplayers feel their needs and voices have not been heard. Without knowing the exact budget figures for the track’s marketing, media, and facilities, it is difficult to ascertain how much is simply beyond the track’s control.
Monmouth has also added exchange wagering, a new wagering platform the track hopes will become popular with younger generations. Exchange wagering allows bettors to secure odds they like as well as place bets while the races are being run. Officials are hopeful exchange wagering can potentially bring in a new generation of fans that see this form of betting as an exciting, action-filled way to play.
However, despite its efforts, Monmouth Park remains very much at the mercy of the courts and the public of New Jersey to determine its future. Much has been made of the upcoming casino referendum vote on November 8. This vote will determine if two casinos will be built in northern New Jersey – the likely sites are adjacent to the Meadowlands Racetrack and Jersey City. If the casinos are built, the estimated revenue for the state will be approximately $600-million per year.
Monmouth Park is slated to receive two percent of the revenue per year, or $12-million. Drazin has repeatedly stated Monmouth needs about $50-million to compete with tracks in the surrounding area. A portion of that $50-million would also go directly to the horse breeding industry, which has simultaneously suffered along with Monmouth Park. Moreover, officials have also discussed an increase of that two percent over time that would go back to Monmouth Park. The legislation tied to the distribution of casino revenue has been worded as such that it would provide an opportunity for Monmouth to see an increase in money from that revenue.
Many feel that while receiving two percent of casino revenue is a good start to helping Monmouth Park become competitive again, the manner in which the money is dispersed shows Monmouth will actually receive much less than two percent of the total revenue.
John Brennan, sports business writer for NorthJersey.com, recently highlighted the exact manner in which the money will be allocated. In his piece, Brennan showed the formula for which the money will be dispersed. Brennan revealed the following on his blog:
–Of the first $150-million, Atlantic City gets half to go toward non-gaming economic development. The other half is split 60-40 among various government programs designed for property tax relief, aid for senior citizens and disabled residents. The horsemen get two percent of the 40-percent, or $.06-million.
-Of the next $150-million, 40-percent goes to Atlantic City, or $60-million. The horsemen will receive two percent of $36-million, or $.72-million.
-Of the next $150-million, the horsemen receive two percent of $42-million, or $.84-million.
Of the final $150-million, 20-percent goes to Atlantic City, and the horsemen will receive two percent of $52-million, or $1.04 million.
-The total for the horsemen becomes $.06 + $.72 + $.84 + $1.04 = $3.44-million dollars.
As constructed, Monmouth Park would receive only about $3.4-million dollars per year from the casino revenue.
Further, a recent poll conducted my Monmouth University showed the voting will be very tight, with 48-percent polled being in favor of the casinos and 48-percent being opposed. Although track officials and others remain optimistic, there is no guarantee casinos will be built in North Jersey. And if casinos are built, there is no telling how long it will be until Monmouth Park begins to see any of that money. It may take three-to-four years for the casinos to be built – years the track may not have.
Finally, the legalization of sports betting in New Jersey, a battle that began 2011 is now in the Third Circuit Court awaiting a ruling. The state has already lost this case multiple times, most recently in 2015. However, despite the ruling, the court then relented and had 12 judges hear the case again. The ruling has yet to be announced.
The legalization of sports betting in New Jersey is the key decision that can save Monmouth Park. While the track may only see a small fraction of money from potential casino revenue, if sports betting were legalized, Monmouth Park would receive a significant portion of that revenue. Money generated from legal sports betting has been estimated anywhere from $600-million to $1-billion per year for the state. Monmouth could stand to see a potential of $75-million per year in revenue.
Monmouth Park had also partnered with William Hill U.S., a sportsbook based in Las Vegas to begin operating at Monmouth Park once the courts ruled. Monmouth has spent $1-million on the William Hill Race & Sports Book at the track. The track has planned a $5-million full-service race and sports book should sports betting be ruled legal. Monmouth has repeatedly said the track will be ready to take bets as soon as betting is deemed legal in New Jersey.
Despite the potential of casinos coming to North Jersey, Monmouth’s future will rest in the hands of the judges on the Third Circuit Court. While the Meadowlands Racetrack will see a boost in revenue from having a casino on its property, Monmouth Park will be the main beneficiary if the courts rule in favor of sports betting. The revenue gained from sports betting, as well as having a full-service sportsbook on its grounds would provide Monmouth with the money necessary to compete with tracks across the country.
The future of Monmouth Park is complicated and cloudy, mired in court rulings and public votes. So much of Monmouth’s future is beyond its control as the track operators struggle to keep it afloat. Track officials and New Jersey horsemen have remained committed to keeping racing in New Jersey and their dedication does inspire confidence that better days lie ahead.
For New Jersey horseplayers who have spent countless summers and created indelible memories at Monmouth Park – the track will survive. It just may not be the track they remember.
Dan Montesano is a graduate of the University of Delaware. He currently works in special education in New Jersey. He first contributed to Danonymous Racing in 2015. He spends most of his summers at Monmouth Park and Saratoga. Dan contributes a variety of pieces, as well as handicapping. He also covers Monmouth Park for shapperdacapper.com.