Published: Friday, October 26, 2007

ATLANTIC CITY - The Breeders' Cup, the "Super Bowl of horse racing," plays out today at Monmouth Park in a crowning achievement for New Jersey's beleaguered horse industry. Although the presence of so many top thoroughbreds will no doubt be a boost for racing, the horse tracks are looking to another industry as their ultimate savior - the Atlantic City casinos.

With Gov. Jon S. Corzine's office acting as an intermediary, the casinos and the racing industry have been negotiating a new agreement for the casinos to subsidize the tracks in exchange for a ban on slot machine-like video lottery terminals, or VLTs, in New Jersey.

Negotiators are discussing a three-year deal for $90 million. The pact essentially would be an extension of a four-year, $86 million subsidy agreement that the casinos and tracks entered into in 2004.

"I believe the casinos and the horse-racing industry should be partners," said Leon Zimmerman, a lobbyist for horse owners and breeders. "We see this as our survival."

Joseph A. Corbo Jr., president of the Casino Association of New Jersey, stressed that the gaming industry wants to continue a moratorium on VLTs at the tracks if a new subsidy agreement is approved. Such a ban would allow Atlantic City to maintain its monopoly on casino-style gambling in New Jersey.

In an opening round of talks, lawmakers and representatives of the horse industry met with Corzine on Oct. 12 at the governor's mansion in Princeton. Another meeting was held last week in Atlantic City between casino officials and a state delegation led by Gary Rose, who heads the governor's office of economic growth.

"The governor realizes the importance of the horse-racing industry to the Garden State in general and is committed to working with horse-racing advocates and other stakeholders to help stabilize horse racing's economic future," Corzine spokeswoman Lilo Stainton said.

Over the years, the financially ailing tracks have been lobbying the state Legislature for approval to add VLTs to their operations. The casinos have vigorously opposed the expansion of slot-style gambling outside Atlantic City and appear to have Corzine in their corner, according to Zimmerman.

"We're not getting VLTs," Zimmerman said of the tracks. "It ain't happening. The governor doesn't want it."

Casinos grudgingly subsidized the tracks in the first agreement and are equally reluctant - if not more so - this time around because of declining gaming revenue this year caused by extra competition from Pennsylvania's new slot parlors and Atlantic City's partial casino smoking ban.

"We have not reached a consensus, but we have committed to continue to work with the Governor's Office for a way to continue to assist New Jersey's horse-racing industry to become self-sufficient, provided that it is done in a manner that does not impact the significantly greater benefits that our industry generates for the state, or the growth opportunities that currently exist," Corbo said in a carefully worded statement.

Casinos don't want any financial bailout of the tracks to sidetrack or harm the $9 billion in new construction that the gaming industry plans for Atlantic City in the next few years, Corbo indicated.

"This investment, of course, interests the state, as it will be a catalyst for job creation, increased tax revenues and even more capital investment," he said.

Under the four-year pact, casino subsidies helped the Meadowlands, Monmouth Park and Freehold Raceway to pay out bigger purses and attract higher-quality races that made them more competitive with horse tracks in neighboring states. Atlantic City Race Course, which has limited live racing, was excluded from the deal because its operations were considered too small.

While it appears the next agreement will be for $90 million over three years, the horse industry believes that $50 million annually is needed to sustain the tracks, Zimmerman said. Racing representatives argue that the gaming industry should subsidize their operations because casinos have harmed the tracks since the start of legalized gambling in Atlantic City in 1978.

"I'm sure when push comes to shove, they will help the horse-racing industry, because it is worth helping," Zimmerman said. "Since the advent of casinos, we have plummeted."

According to a Rutgers University study, the state's horse industry generates $1.1 billion annually in economic benefits, including nearly 13,000 jobs and $160 million in tax revenue.

"It is part of the fabric of our state. Horse racing has been in existence for hundreds of years," Zimmerman said. "I think there is a moral obligation to support the horse-racing industry."