Failing states
New Jersey's largest daily newspaper, the Star-Ledger, suggested in an editorial this week that the state euthanize its once-thriving, if now withered racing industry.
Last month, Kentucky Republicans killed proposed legislation in committee that would have permitted slot machines at racetracks, turning its back with a swoosh of arrogant disregard for majority opinion — if not democracy itself — on the state's signature industry.
Two days before the July 29 opening of the summer meeting at Saratoga, New York thoroughbred breeders and other interested parties will stage a demonstration outside the State Capitol and demand that New York fulfill its obligation to establish a video lottery casino at Aqueduct more than eight years and several false starts after the passage of enabling legislation.
Editorial writers at the Star-Ledger and other major newspapers are fully aware of what a dinosaur looks like but executing the New Jersey Sports and Exposition Authority, which operates Monmouth Park and The Meadowlands, would serve no beneficial purpose other than proving company to those already in misery. Treating the malignancy would serve far more beneficial and productive constituencies.
Some 13,000 citizens of New Jersey are employed in the racing industry, almost 4,000 directly by racetracks, which are operating at a competitive disadvantage resulting from measures designed to protect Atlantic City casinos from loss of market share were slot machines permitted at Monmouth and the Meadowlands. Meanwhile, slot machines in Pennsylvania, Delaware Empire City, in New York, have resulted in purse structures in those states that have drawn horsemen away from New Jersey's tracks, both thoroughbred and harness. The most dangerous threat to racing in New Jersey is state government. In this respect, it is not alone.
New York's longstanding position as the capital of dysfunctional government is in danger of being surpassed by Kentucky.
A few days before a special session of the Kentucky legislature was to have considered what amounted to a stimulus package for its signature industry, a friend called to discuss a stock trade. Churchill Downs stock, he anticipated, would rally in anticipation of what most outside the Commonwealth saw as a no-brainer with the future of the racing and breeding industries threatened by alternative gaming in neighboring in the Bluegrass State.
As a speculative endeavor this trade appeared to carry risk roughly equivalent to betting on a 1-9 favorite in field of three. After a rally in Frankfort, Churchill stock was up slightly. But after a subsequent and outlandish decision to kill the bill in committee — roughly the equivalent of the 1-9 favorite being left at the gate — my friend suffered a small loss.
With breeders exporting mares more states with more promising breeding incentives and horsemen relocating stock to tracks in states with gaming-subsidized purses, what happened in the Kentucky senate last month defies even the most creative irrational explanation.
What is the benefit of subjecting the industry that is the backbone of the commonwealth's economy and directly supports tens of thousands of its citizens, to unnecessary hardship while supporting an outflow of gaming revenue to Indiana and, soon, Ohio? Only the Kentucky legislature can answer that but it has provided no rhyme to what it passes for reason.
Many prominent Kentucky horsemen have moved substantial portions of their stables to Pennsylvania, Delaware and Indiana while intransigent and myopic lawmakers, most of them Republicans, have placed the futures of Ellis Park Turfway Park in certain if unnecessary jeopardy while Churchill Downs cut racing dates during its recently concluded meeting.
The best efforts of Kentucky's misguided, self-interested solons notwithstanding, it is always difficult to outdo New York lawmakers in terms out outlandish discord that serves no one. A five-week standoff that followed a Republican attempt to change of leadership in the state senate during a special session of the legislature is unprecedented but the effort to establish a casino at Aqueduct has seen no progress since some time before the invasion or Iraq. The latest embarrassment of self-serving disregard of the public good is no more than a hiccup in the woeful history of politics in New York in general and specifically the Aqueduct casino, which has become something of a political pratfall.
Since shortly after the attacks of September 11, 2001, based upon the state's projections for revenue sharing from the Aqueduct casino, New York taxpayers have lost $1 million a day while owners and breeders still await a sharp increase in purses and incentives from their share of the casino proceeds. Purses at the soon-to-open Saratoga meeting have been reduced by seven percent from 2008 levels after a Belmont Park meeting during which only one stakes race was run on a Sunday during the month of July. The racing business has more than its share of problems but the most daunting, in many cases — Kentucky, New York and New Jersey the most egregious examples — is failure of government at the state level. In difficult economic times as well as in times of prosperity, it is the responsibility of elected officials to take measures that encourage and stimulate intrastate commerce and business.
Stimulating the economy is not solely the responsibility of the Federal government. But some state governments, particularly since they are handed the tools to proven to stimulate industries such as racing and breeding that have immediate and local impact, are the greatest impediment to progress.
We are, as they say, truly in the hands of the Philistines.
Paul Moran is a two-time winner of the Media Eclipse Award, and has received various honors from the National Association of Newspaper Editors, Society of Silurians, Long Island Press Club and Long Island Veterinary Medical Association. He has also been given the Red Smith Award for his coverage of the Kentucky Derby. Paul maintains paulmoranattheraces.blogspot.com and can be contacted at paulmoran47@hotmail.com.
