Rutgers Equine Scientist Releases “2014 State of the New Jersey Horse Racing Industry” paper: Shows New Jersey Has Not Remained Competitive with New York and Pennsylvania  

November 6, 2014

NEW BRUNSWICK, NJ –

 The Rutgers Equine Science Center released – “2014 State of the New Jersey Horse Racing Industry” (PDF), a follow-up to the 2009 white paper which reported the impact of slot machines and video lottery terminals on the horse racing and breeding industry, agriculture, and open space.

The authors of the current report, Dr. Karyn Malinowski, Director of the Rutgers Equine Science Center and Dr. Paul Gottlieb, Chair of the Rutgers Department of Agricultural, Food, Resource Economics, utilized indicators of horse racing industry health in comparison to two neighboring states where alternative gaming revenue supports horse racing. These indicators included: purse monies awarded, number of race days, races restricted to state-bred horses only, mares bred, and foals registered.

Data were also collected to assess the number of horse farms entering the Farmland Preservation Program and the number of preserved horse farms sold during 2010-2014, the number of horse farms currently on the market, and any changes in hay, grain, or straw production by New Jersey animal feed producers.   Malinowski and Gottlieb believe that these parameters serve as indicators of the confidence race horse owners and breeders have in the future of the industry as demonstrated by their willingness to invest in it.

The year 2010 was chosen because it was during this year that the Report of the Governor’s Advisory Commission on New Jersey Gaming, Sports and Entertainment was released and the process began for privatization of the two racetracks operated at that time by the state.  Since 2010 it is evident that indicators of the health of the horse racing industry demonstrate that New Jersey race horse owners, trainers, and breeders have been hit hard by the cessation of the purse enhancement awards in 2010 and by competition from the purse and breeder incentive structures that exist in neighboring states where racing is supported by alternative gaming.

“While the horse racing industry and state government are to be commended for actions taken since 2010 to ensure sustainability of horse racing in New Jersey, indicators of the health and well-being of the horse racing industry suggest that the industry is struggling in spite of efforts by racetrack management and organizations representing horse owners and breeders,” says Malinowski.

Also reported is the fact that equine operations represent a small and declining share of New Jersey’s preserved farms, which means that their acres cannot be protected by deed restriction alone.  In addition, race horse breeding operations in the state’s preservation program are being sold at a disproportionately high rate.  These operations are now transitioning to other uses, including sport, competition, and recreational segments of the equine industry.

This comes at a time when New Jersey voters on November 4th 2014 overwhelmingly supported Ballot Question Two, which would reallocate money from the corporate business tax to specifically designate funds for the preservation of open space and farmland.

“There should exist a partnership, in New Jersey, between the casino and horse racing industries to enable both to remain sustainable, as competition for gambling dollars continues to escalate. Slot machines and table games in New York and Pennsylvania are impacting Atlantic City casinos now, and will continue to do so with increasing force as more gaming is put into place until the regional market is saturated.  The installation of casino gaming and sports betting at New Jersey racetracks would be a relatively quick and easy way to slow down these trends, much to New Jersey’s advantage,” says Malinowski.

Any increase in gambling revenue would enhance the state budget significantly (depending on state tax revenues) and provide capital for use by the casino and horse racing industries to keep them competitive. Casino gaming outside Atlantic City would also add jobs to the state, during construction and renovations of the racetracks as well as during operation.

The 2007 Equine Science Center economic impact study of the New Jersey horse industry found the industry to be valued at $4 billion (including racing & non-racing interests) and generated $1.1 billion annually in positive impact on the New Jersey economy.