Casino Referendum Trounced in New Jersey

A proposal that would have likely brought casino gambling to the Meadowlands and would have, in turn, boosted purses at Monmouth Park, was soundly rejected by Garden State voters Tuesday.

With over 93% of the votes having been counted late Monday, only 22% of the voters had approved the referendum. The proposal called for two new casinos in the state, which would be the first ones outside of Atlantic City. Though the referendum did not specify where the casinos would be, it was widely expected that one would be at the Meadowlands and another in Jersey City. The loss at the ballot box was hardly a surprise as polls had predicted the casino question was going to be soundly defeated.

The ballot proposal came without any enabling legislation, specifics that might have included where the casinos would be, what would be done with the revenue and how it would be split. Anti-casinos forces, which were bankrolled by, among others, Genting, which operates the casino at Aqueduct, took advantage of the vague nature of the language on the ballot. They ran an ad campaign that said New Jersey politicians could not be trusted and that they must have something to hide since so few details were available to the public.

“I thought all along the ballot question would be defeated,” said Dennis Drazin, who heads the team that operates Monmouth. “It was clear from the polling information.”

The polls were so lopsided that Meadowlands track owner Jeff Gural and Paul Fireman, who was behind the proposed Jersey City casino, ended their ad campaigns well before the election.

“For quite some time now, especially after Gural and Fireman announced they were bolting on their campaigns and stopping their efforts to try to get it passed, everyone saw that the lack of transparency and the failure to pass enabling legislation is what derailed this issue,” Drazin said.

It also didn't help that the Thoroughbred industry did not initially throw its weight behind the pro-casino campaign. The two breeds were going to get only a 2% cut of the casino revenue and that was to be split between the Standardbred and Thoroughbred industries. Drazin thought that he had an agreement with Gural whereby Gural would guarantee a sizeable chunk of his profits toward purses at both tracks. But with Drazin unable to get Gural to put the guarantee in writing, Thoroughbred forces did little to nothing to help push for the casinos.

That did not change until the day before the election, when Gural and Drazin reached a deal whereby Gural guaranteed to supplant thoroughbred purses by $15 million annually if he was awarded a casino. Only at that time did Monmouth officially support the referendum.

“Jeff should have made this deal with me a long time ago,” Drazin said.

With the results in, the entire New Jersey racing industry was scrambling to figure out what to do next. Drazin said if the language of the referendum was changed significantly it could reappear on the ballot next year. Others believe casino expansion cannot be voted on again until 2018. Either way, Drazin acknowledged that it might be impossible to turn around a 78-point defeat. He said, for that reason, he will focus his efforts on trying to find other ways to bring in additional revenue to Monmouth. He said it is possible to legalize VLTs at the tracks with legislative approval only, thereby taking the voters out of the equation. He is pushing a bill to do just that.

“If you sit back and analyze it strategically the no vote passed by a 78-percent margin,” he said. “So if you see a window to do VLTs, which does not require a ballot question passing, you'd probably be smarter to try to proceed with that issue rather than taking the risk of going in front of voters again.”

Online casino gaming is legal in the state for New Jersey residents, and Drazin believes he could also use that to his advantage. He envisions opening an area at Monmouth where fans could play casino games on computer screens in a building built to look and feel like a casino. He said he believes Atlantic City would be behind that proposal because it would share in the revenue.

Drazin also speculated that the results of the U.S. Presidential election could work out in favor for Monmouth. New Jersey Governor Chris Christie is set to head Donald Trump's transition team and Drazin said it's possible he might resign as governor to focus on that task. That would mean Lieutenant Governor Kim Guadagno would take over as governor and she is viewed as far more racing friendly than Christie is.