A run to save horse racing in New Jersey

Anthony Perretti remembers the glory days of New Jersey's equine industry.

The Meadowlands Racetrack in East Rutherford was the crown jewel of the nation's harness-racing venues, and Monmouth Park Racetrack in Oceanport was the premier site for thoroughbred racing in the state. Both drew roaring crowds and offered big purses.

Now Perretti, general manager of New Jersey's largest horse farm, is unsure what the future holds for the tracks. He has put 400 acres of Monmouth County's 750-acre Perretti Farms up for sale for $15 million.

Perretti, the largest standardbred horse breeder in the state, plans to sell scores of horses over two years, beginning Nov. 11 in Harrisburg. His 310-acre farm in North Hanover, Burlington County, will likely be leased.

Why? New Jersey "is no longer competitive" in the horse-racing industry, Perretti said.

"If the public wants horse farms and open space, then it has to have a business model that supports them," he said. "The one we have doesn't work anymore."

With New Jersey racing offering smaller purses - the portion of on- and off-track revenue shared by owners of winning horses - farm owners and breeders have begun to sell or to relocate their operations to states that provide a stable source of revenue. Dozens of farms are on the market.

The biggest reason is the shrinking incentive paid to owners of horses bred and born in-state, known as the New Jersey Sire Stakes.

In New Jersey, that incentive dropped from $7.5 million in 2007 to $6.2 million last year. The award increased from $4.1 million to $12.7 million in Pennsylvania and from $15.1 million to $19.5 million in New York during the period, according to a report released this spring by the Rutgers Equine Science Center in New Brunswick.

Originally, "we had the strongest and best [sire] purse structure," said the center's director, Karyn Malinowski. Track "attendance was high, so betting was up."

Without an infusion of money from other forms of gambling - slot machines, video lottery terminals, more off-track betting - to make the purse attractive, the number of New Jersey horses registered for sire stakes has decreased from 1,023 in 2003 to 774 last year, the report said.

In neighboring states, the number grew substantially during the period - from 672 to 1,064 in New York and 1,250 to 1,700 in Pennsylvania, the report said.

The take from slot machines at tracks in those states has buttressed racing purses and increased attendance. The non-racing wagering is combined with revenue generated by track betting and paid to owners of winning horses.

In addition to the Meadowlands and Monmouth Park, the New Jersey has tracks in Freehold and outside Atlantic City.

There were 110 stallions stabled in the state 15 years ago, Perretti said. Now, he said, there are five.

The state "once bred 3,000 mares [per year], and now it's under 700," he said. Without the stallions and breeding program, he said, racing declines, further decreasing revenue for the sire stakes.

New Jersey had 176,000 acres devoted to horse-related uses in 2010, including racing, boarding, training, breeding, and riding, the Rutgers Equine Science Center said. Of those, 20,700 acres were in Burlington County, 6,200 were in Gloucester County, and 1,600 were in Camden County. The industry also has a large presence in Hunterdon, Monmouth, and Salem Counties.

In 2007, Rutgers estimated that horse-racing training and breeding contributed $780 million to the state's economy each year. They supported 7,000 jobs and paid $115 million in taxes.

People in the racing segment are not leaving in droves, Malinowski said. But some owners are "looking to convert their land to another use," said Ed Wengryn, research associate for the New Jersey Farm Bureau.

"It could be turned into pasture, a winery, or converted into housing developments," he said.

Racing advocates say that the industry is endangered by Gov. Christie's opposition to putting slots at race tracks - which some say would threaten Atlantic City gambling - and his ending a long-standing practice of Shore casinos' helping to underwrite tracks.

The governor, who has sought to make racing more self-sufficient, this summer vetoed action by the state Horse Racing Commission to award $15 million - from an assessment on the casinos - to subsidize racetrack purses.

"The manner in which the commissioners distributed the $15 million in state subsidies defies reason and logic," Christie said in his July veto message.

The commissioners' "haphazard" allocations included "awarding state subsidies to groups that did not request money," he said.

Christie referred to the Meadowlands and Monmouth Park, which are to be leased by private investors. The New Jersey Sports and Exposition Authority has tentative agreements with New York developer Jeff Gural to operate the Meadowlands and with Resorts Casino co-owner Morris Bailey to run Monmouth Park. The agreements do not call for subsidies.

The success of the tracks is crucial to the future of horse racing in the state, Malinowski said.

"Can we bring back the glory days?" she asked. "Of course we can, but we need those tracks. . . . Right now, people are waiting."

They want to know if the purse structure is going to be supported as it is in neighboring states. Will track visitors be able to play slots and bet on sporting events while they're there?

"I wish there was a flow of money to bridge the gap and convince people to stay in New Jersey with their horses, but there isn't," Perretti said.

The Nov. 8 ballot contains a referendum on whether to amend the state constitution to permit sports betting at tracks and casinos. A Rutgers-Eagleton poll released this month showed the measure was supported by 58 percent of the 903 adults polled.

Voter approval will have no effect unless the federal government lifts its ban on sports betting, but it would position the state to take advantage of any change.

"Another type of gaming at the racetracks could increase revenue and increase the purse structure," Wengryn said. "It could expand the gaming experience. This would definitely benefit to the equine industry."

Approval of another revenue stream, such as slot machines, to support racing might be enough for Perretti to reconsider selling his properties and horses, he said.

"Slots and track betting go hand in hand," Perretti said. "Our Meadowlands is like Yankee Stadium.

"You need a place to attract the top players and you need financial support," he said. "You need slots."