With all the hoopla surrounding the recent sports betting launches at Monmouth Park and the Meadowlands Racetrack, it was easy to forget that there is a third horse racing track operating in New Jersey: Freehold Raceway.
Sports betting is coming there, too — but not on the opening weekend or two of football this fall, a top track official has told NJ Online Gambling.
Chris McErlean, a vice president at Penn National Gaming — which for two decades has co-owned the Freehold track with Greenwood Racing — said no exact date for a sports betting launch has been determined.
“The goal was to be up and running by the start of football season, but the reality is we’ll start sometime during the football season,” McErlean said. “We don’t think that is going to be a big detriment.”
Seeking a betting partner
Freehold did recently apply to the state Division of Gaming Enforcement for a transactional license, McErlean said, but negotiations are ongoing to land a partner to run the sports betting operation (Monmouth Park has a deal with British bookmaker William Hill, while FanDuel Group is running the sports betting show at the Meadowlands).
The high volume of legal sports betting applications led DGE officials to warn that we’ve reached the point where it won’t be practical to reach all of the final casino and racetrack approvals before NCAA football kicks off in late August.
McErlean believes that “sports betting is not going to move the needle as much as people think. There’s not a lot of margin there. It’s a nice added amenity, but not a huge bonanza.”
That thinking is based not only on expectations about revenue — which might only be 5 percent of the total amount bet — but also on the fact that the sports betting partner collects a significant chunk of the revenue. Then there are state taxes of 8.5% for land-based betting and 14.25% for online sports betting run through a racetrack like Freehold.
Adding to the feeling that sports betting won’t cause a massive windfall for Freehold Raceway is competition from Monmouth Park, which is only 17 miles east.
But McErlean said that Monmouth’s proximity to the Jersey Shore might give Freehold “a geographical advantage.” McErlean is referring to the fact that as New Jersey’s westernmost track, it’s the closest sports betting option for those out as far as eastern Pennsylvania, where sports betting is approved but not yet launched.
An upgraded area on the fourth floor at Freehold had some appeal as a main sports betting area, McErlean said — except that bettors would have to go down to the first floor and outside to smoke. That makes Favorites, a simulcast area on the first floor already serving food and drink, a better bet.
A different animal from horses
McErlean noted that sports betting is far different than horse racing, where the track gets a portion of the parimutuel handle.
“With sports betting, you can lose money” on a particular game, McErlean said. (Note that New Jersey racetracks can and often do lose money overall, because the overhead and infrastructure costs outpace the racing revenue.)
Penn National operates tracks or casinos in Pennsylvania, West Virginia, and Mississippi — three states that are among the favorites to follow Nevada, Delaware, and New Jersey across the sports betting finish line — so it’s in the company’s interest to carefully manage this opportunity in NJ.
Will sports betting boost purses?
Some horse racing fans at Freehold may be dreaming of bigger purses, deeper cards, and more racing dates coming from the arrival of sports betting.
McErlean gently poured some cold water on that angle — something he also has had to do with the horsemen, who wish to see a sliver of sports betting revenues devoted to purse supplements.
“There’s a lot of speculation, but the real answer is we don’t know,” McErlean said of whether purses will increase. “We have to invest in upgrades at the track, and we expect that in the beginning, marketing and promotional costs will be high. And New York and Philadelphia are two of the largest TV markets on top of that, and let’s face it, it’s a tight business.”
There’s another wrinkle, too: New Jerseyans may be able to bet on sports online within the next ten days, and at least a half-dozen such sites affiliated with a New Jersey track or casino will surely be up and running by the time Freehold offers its first sports bet.
“I think we’ll do well with special events like March Madness and the Super Bowl, and really NFL Sundays,” McErlean said. “Beyond that, it’s hard to say if people will want to drive to the track or just bet at home. We’ll see how it plays out.”