Measure Necessary to Allow State Facilities to Stay Competitive and Offer Simulcasting of Popular Out-of-State Horse Races
TRENTON – A bill sponsored by Senator Jim Whelan to amend the State’s Casino Simulcast Act to give casinos the flexibility and profitability to continue partnering with out-of-State racetracks to simulcast high profile races has been signed into law by Governor Chris Christie.
“Given the casino industry’s importance to the South Jersey economy, we need to give our State’s casinos every tool we can to help them be profitable,” said Senator Whelan, D-Atlantic, and Chairman of the Senate State Government, Wagering, Tourism and Historic Preservation Committee. “Unfortunately, the way our Casino Simulcast laws were previously structured, casinos did not have the ability to negotiate a payment to out-of-state tracks that reflected the realities of the market. This was threatening the future of their simulcast business, and to push horse racing enthusiasts out of state to bet on these exciting races. Rather than forfeit profits to racinos out of state, this will allow us to keep those dollars here in New Jersey.”
The law, S-1025, will allow casinos and out-of-State racetracks to negotiate the amount that a casino pays for the transmission of simulcast horse races from the sending track. Under previous law, casinos were prohibited from paying more than 3.5 percent of the parimutuel pool on each race, or, in the case of not more than 28 races per calendar year, and for races run annually at the Breeder’s Cup World Cup Championships, six percent of the parimutuel pool on each race. According to the Casino Association of New Jersey, certain simulcast signal providers had threatened to withhold their signal if New Jersey did not increase the simulcast fees paid out by casino simulcasting facilities – a move which would have prohibited casinos from taking bets on premium races like the Kentucky Derby or the Preakness.
Under the new law, casinos will be allowed to pay up to six percent of the parimutuel pool on each race, and will be allowed to go up to nine percent for the more popular races.
The law will also allow the casino licensees to retain 55 percent of the remaining takeout rate amounts from horse betting, instead of the current 50 percent allowed under previous law. Senator Whelan said that increasing the casino takeout rate recognizes that off-track simulcasting at casinos has been hurt by the availability of table games at horse tracks outside of New Jersey, and said that the higher rate would encourage casinos to negotiate with out-of-state racetracks to continue to provide simulcasting.
“At the end of the day, the expansion of gaming at Dover Downs in Delaware and at betting parlors in Pennsylvania has had a serious impact on casino gaming in Atlantic City,” said Senator Whelan. “We want to make sure we give our casinos the tools they need to succeed and to compete with out-of-state facilities, and we want to make sure they come to the table as willing partners with out-of-state tracks. This law will ensure that the lucrative partnership between Atlantic City casinos and out-of-state simulcasting horse tracks continues well into the future.”
The law takes effect immediately.