Once thought to be a threat, the proliferation of sports betting has had a benefit for horse racing thanks to a deal between the SBOA of New Jersey and The Meadowlands to direct a small cut of the proceeds toward purses.

by Bob Duff

When addressing what the revenue that legal and regulated sports betting is generating has meant to the New Jersey harness racing industry, Jason Settlemoir is frank and to the point.

“Without sports betting, we’re probably not having this conversation,” said Settlemoir, chief operating officer/general manager of The Meadowlands.

When the Supreme Court was overturning the Professional and Amateur Sports Protection Act of 1992 (PASPA) in the spring of 2018, it left smiles on the faces of many people in a variety of industries in the Garden State. Certainly, those in the business of harness racing were among the grinning.

In 2018, the Standardbred Breeders & Owners Association of New Jersey (SBOANJ) signed a 10-year deal with The Meadowlands to add a minimum of $1 million to the purse account annually. The money comes from the track’s share of sports betting revenue.

Call it a lifeline, or a lifeboat if you will, there’s no doubting that the injection of revenue generated by sports betting, both live and online, has been a godsend for the New Jersey harness racing industry.

“It’s been good for us,” said Mark Ford, president of the SBOANJ. “I guess you always would like a little more, but there’s no doubt it’s been good for us.”

Certainly, the numbers bear out witness to exactly how good it has been for New Jersey standardbred racing. The purse structure at The Meadowlands has dramatically increased since legal and regulated sports betting went live in the state of New Jersey in 2019. In 2022 alone, some $4 million was injected into the purse pool at The Big M directly from sports betting revenue. In 2024, stakes races at The Meadowlands are going for a combined purse pool of almost $25 million.

HOW IT WORKS IN NEW JERSEY

It was New Jersey that led the way in getting PASPA overturned and specifically, Dennis Drazin, chairman and CEO of Darby Development, operator of Monmouth Park Racetrack, who was the driving force in leading the lobby to get it done.

Under New Jersey sports betting law, each sports betting site must have a skin with either a New Jersey-based brick and mortar casino, or a racetrack. The Meadowlands is partnered with the gold standard of U.S. sports betting sites, FanDuel.

The latest sports betting revenue numbers released by the New Jersey Casino Control Commission (NJCCC) show that through the end of March 2024, The Meadowlands is showing gross retail sports betting revenue of $7,139,156 and gross online sports betting revenue of $192,643,783 for the year. The Meadowlands also holds skins for Fanatics and Super Book sportsbooks.

It’s been a tougher go for Freehold, mostly through no fault of their own. One of their skins is with Penn Gaming. In 2022, Penn Gaming got out of its deal with Barstool Sportsbook and switched to a partnership with ESPN Bet. However, that changeover led to several months during 2023 when no sports betting revenue was coming in from this skin.

At Freehold, the gross retail sports betting revenue for 2024 is just $461,261. Online gross sports betting revenue works out to $1,051,164. Freehold’s other skin is with betPARX. There is a PARX retail sportsbook on site at Freehold.

The pacts between the sports betting sites regarding how much revenue they share with their racetrack partners are private deals and closely-guarded secrets. Settlemoir did confirm that their revenue-sharing deal with FanDuel runs through 2029.

“I can’t say enough about what a great partner FanDuel has been for us,” Settlemoir said.

Likewise, the pacts between the SBOANJ and the racetracks regarding purse structure boosts from sports betting revenue aren’t revealed for public consumption. But it isn’t difficult for the SBOANJ to decipher that everything is on the up and up. Data that is available to everyone is the monthly revenue earned from sports betting. The NJCCC posts the numbers as soon as they are available.

“They’re all right there for everyone to see,” said Al Ochsner, executive administrator of the SBOANJ, whose job it is to verify such data.

SPORTS BETTING CANNIBALIZING RACING

As much as the purses are on the rise thanks to sports betting, the movers and shakers in the harness racing industry admit that it is a bit of a double-edged sword. Certainly, the availability to bet on almost any sport is pulling some bettors away from the track and into the sportsbook.

“We’ve lost some bettors to sports betting, particularly among our younger customers,” Settlemoir said. That ship really isn’t sailing in the other direction. Those drawn to the racetracks to bet on sports generally aren’t also betting on the horses.

Still, as the old saying goes, it’s unwise to look a gift horse in the mouth. It’s easy to forget that prior to the advent of legal and regulated sports betting, The Meadowlands was overpaying on purses to the tune of $4 million per year. Freehold went through a downturn in the 2010s when purses were actually reduced. A 2019 study conducted by the Rutgers University Equine Science Center found that New Jersey horse racing was lagging behind New York and Pennsylvania, largely because there was no revenue-sharing program in place with the New Jersey casinos similar to operations in those states.

The fact of the matter is that a standalone racetrack in this day and age is a money-losing proposition. The injection of sports betting revenue into the purse structure, coupled with the annual subsidy of $10 million that the New Jersey state government puts into harness racing to boost purse structures and incentivize breeding operations and the New Jersey Sires Stakes, has proven a boon to the industry that can’t be ignored.

“Anything we can do to help this great sport of ours keep going, we’ve got to get it done,” Ochsner said.