HARNESS TRACKS OF AMERICA Executive Newsletter

HARNESS TRACKS OF AMERICAA SHOCKING & SCARY REPORTThe New Jersey Gaming, Sports and EntertainmentsTransition Committee, which has beenworking on approaches to racing, casino andother problems in the state, has issued a draftreport that will shock and frighten the entireracing community, harness and thoroughbred.It overlooks most of the positives of the industryand ignores entirely the most obvious potentialalternative -- slots at the state’s three tracks-- and suggests instead reforms including newagreements with horsemen, an end to subsidies,making racing self-sustaining, consolidating andrestructuring the racing industry, and the possibilityof discontinuing racing at the Meadowlands.The latter is last on the list of the committee’ssuggestions, indicating it may have very lowpriority, but as of the moment it is included inthe 20-page draft of the report that, if approved,goes to new governor Chris Christie.It seems unlikely that Gov. Christie, a successfullawyer and U.S. attorney for the last eight years,would not quickly see the folly of the proposal ofscuttling an industry that employs some 12,000,preserves thousands of green acres in the state,and produces $115 million in current taxesthat with the multiplier effect balloons to aneconomic impact of $750 million, according toa Rutgers University study produced little morethan two years ago. There are, of course, otherpositive actions that can help solve the problemthat are not considered in the draft report. Thegovernor says he and his staff will be studyingthe racing and gaming report -- along with 20others on various aspects of state administration-- and hopefully the racing industry will begiven an opportunity to respond. Jon Hanson,former chairman of the New Jersey Sports andExposition Authority, chairs the gaming,racing and sports committee making therecommendations, and Bob Mulcahy,Executive NewsletterA daily fax and e-mail report on racing and gaming developments in North America and beyondStanley F. Bergstein, EditorMonday, January 25, 2010former president and chief executive of theMeadowlands complex, is a member. The onlyharness racing member is Mike Gulotta, chiefexecutive officer of Deo Volente farm.Here is the committee’s draft executive summaryon racing and the New Jersey Sports andEntertainment Authority, in its entirety:As budgeted for 2010, horseracing on track isprojected to lose $22 million; the business modelis broken. The agreements with the variousHorsemen Associations will ensure continuedlosses; during 2010 these agreements need to bereopened and renegotiated. It is time to reviewoptions for racing in New Jersey. THE STATUSQUO IS NOT SUSTAINABLE. We encourageconsideration of all the options to make horseracingself-sustaining, including consolidation of racingstate-wide. The ultimate goal is to continue to havelive racing at a venue where the Sports Authorityand its OTW system (ed. note: off-track wagering)can operate without a subsidy. (NJSEA budgetedtotal deficit for 2010 is $38 million.) Anotheroption to be considered is a feasibility study for thecommercial redevelopment of the Meadowlands,including examining other potential uses such asNASCAR.The mission statement includes goals of “eliminatingentities that are based on deficit spendingand no longer relevant to the healthy future ofNew Jersey,” and “acting decisively and immediately.”The reference to closing the Meadowlandsis contained in a section called “NJSEA TransitionTeam Suggested Options to Resolve Losses/Create New Revenue,” and reads: “We need toexplore restructuring the entire operations of theSports Complex to make the Authority at leastrevenue neutral to the taxpayers. This may includediscontinuing racing at the Meadowlandsand restructuring the industry in NJ.”