When you think of government subsidies, what comes to mind? Is it families struggling to heat their homes in the winter, or food stamps for the poor? How about a subsidy to increase gambling purses? Well, that is what the New Jersey State House did on Thursday with bill A-4810.
The measure will provide New Jersey horseracing tracks with $100 million over five years. With New Jersey losing population and ranking #48 in fiscal condition, we cannot afford to subsidize wealthy thoroughbred racehorse owners and people who can afford to gamble on horses. Gov. Phil Murphy recently allocated $20.6 million to expand existing preschool programs. Couldn’t the case be made for using the $20 million allocated for horseracing to further support early childhood education?
The recent state audit released results which showed that the state lacked processes to make sure companies actually created or retained the jobs that were promised as part of taxpayer-funded corporate subsidies.
The measure passed by the legislators requires the recipient of the subsidy to track and file a report on the following metrics: amount of bets, number of horses in the races, number of New Jersey-bred horses in the races, number of New Jersey-bred horses winning races, number of New Jersey broodmares and New Jersey-bred foals born, as well as the New Jersey Sire Stakes Program. None of these metrics directly track job growth or the associated economic impact of the legislation. So the lawmakers in Trenton are making the same mistake again.
If the goal is to increase or maintain farmland dedicated to horse farms and the associated farmhand jobs, then those are the specific metrics which should be measured. It is necessary to measure the desired outcome; otherwise these are just metrics for recordkeeping’s sake.
New business model?
The race tracks previously received subsidies, but instead of being taxpayer funded, they came from casino revenue. Meanwhile horseracing’s popularity continues to decline from 4 percent in 1985 to 1 percent in 2015, according to the Harris Poll. Nationwide, gross horseracing purses have declined over the last five years, according to the Jockey Club. The whole industry is shrinking and this is not the time to prop it up with taxpayer money.
With sports gambling recently legalized, now is the time for the industry to get a boost from sports betting. Recent investments at the Monmouth and Meadowlands Sportsbooks by William Hill and Fan Duel show that they are poised to grow and reap in revenue from sports betting. There’s no doubt, the industry needs to re-evaluate its business model. Now is the time to innovate for the 21st century, find new sources of revenue, and become self-sustaining.