The Supreme Court has ruled that the Professional and Amateur Sports Protection Act of 1992 is unconstitutional and the floodgates are about to open, with legalized sports betting expected to be up and running in dozens of states within the next few years. There's little doubt this wouldn't be the case if not for Dennis Drazin, chairman and CEO of Darby Development, operator of Monmouth Park. Never giving up despite several defeats in lower courts, Drazin spearheaded the effort to have legalized sports betting in New Jersey and, in particular, Monmouth.
Drazin was a recent guest on the TDN podcast, presented by Taylor Made. Excerpts from that podcast appear below.
TDN: These last several years have not been good ones for Monmouth, the only track up and down the East Coast that does not benefit from casino revenue. Is it fair to say that sports betting will be the savior of Monmouth Park?
DD: Monmouth Park's very survival was tied toward trying to find an alternative revenue source. My intention was on behalf of the horsemen to preserve racing at Monmouth Park and do the best that we could to preserve some semblance of days and some semblance of a decent purse structure. We were unable to compete with the surrounding states that have casino revenues. In order to reestablish Monmouth as world-class venue and to put on a bet-able product and to give our horsemen extended days and a longer season, this decision was critical for the survival on a world class level. Would we have stayed open anyway and struggled along? Yes, I was committed to doing that. But this puts us in a totally different picture so far as out future goes.
TDN: Not unexpectedly, the professional sports leagues now have their hand out and are asking for anyone taking legal sports bet to pay them what they are calling an integrity fee. How do you feel about that?
DD: Yes, the leagues are out there trying to get this integrity fee and the integrity fee has kind of morphed over time. When they went to other states in the beginning they suggested they were entitled to 1% of the handle, which really equates to 20% of our revenue. That's unreasonable. The Senate President in New Jersey has told them they are getting zero. They get nothing from Vegas for an integrity fee. His view is they should get the same in New Jersey, zero. I have been very vocal about the nerve of the leagues coming after an integrity fee when in fact they fought us for six years, they've been in court, they cost the taxpayers of New Jersey $9 million and the horsemen $1.5 million in legal fees. They have tried to slow us down at every step while they, in bad faith in our view, continued to grow these markets by being equity panthers with fantasy sports and have moved teams to Las Vegas. The leagues have acted in bad faith all along. All they really wanted from this was a revenue share and now they're out there trying to get it.
TDN: With more money about to come in for purses, will the emphasis be on more racing dates or higher purses, like you had with the elite meet in 2010?
DD: You have to do it carefully. Horsemen have different views. The New Jersey horsemen versus the horsemen that come here from out of state, they're not always on the same page. I see that some of the local guys have expressed they would rather have a lengthier season, even if the purse level was only $200,000 day.
I don't think that approach makes sense. They have their reasons. They think that is an adequate amount and an amount where they don't have to compete with out-of-town horses coming in to race at a higher level. They think they are better off that way. I think you have to have a good mix, a good blend.
When I look at this, I try to look at formula. How much do you need to be competitive in your region? You have to look at New York, Pennsylvania, Maryland, Delaware and you have to say what level do you want to compete at? The answer to me, and this may not be the same answer for everybody, is I want to compete at a world-class level. That's the goal.
If I could repeat the elite meet I would be more than happy to do that. What I'd like to do is carefully develop both, to try to have an elite meet at Monmouth and to try to increase racing days at the Meadowlands. Beginning in 2019, we intend to turn over the Standardbred track at the Meadowlands, so we can have dirt racing there again. We really want to add more days up there and have an extended season up there where we capture revenue from the nighttime betting market.
TDN: Because the horsemen lease and operate Monmouth Park, sports betting profits will benefit racing. That's not the case in other states. In fact, elsewhere people are worried that sports betting competition will hurt racing. What advice do you have for horsemen in other states?
DD: I had been telling people they need to be proactive and get involved in the early stages. Now that this is a reality everybody is doing more than they did before. The NTRA is monitoring the situation and is working to make sure racing gets some share. In other states, horsemen have to be proactive and go to their legislators and lobby, testifying about the need for horse racing to get a share. Otherwise they can be left out.
If they are saying that New Jersey got a piece so we will too, they are mistaken. They really have to be out their doing their homework, going to legislators and educating them. They need to go to their governors to advocate their positions. Those who aren't aggressive will lose out.