NY/NJ Horse Racing Czar Rips NY Sports Betting Process

High tax rate puts New York at risk of a major failure, predicts Meadowlands Racetrack's Gural
saratoga race course entrance

A week after the New York Gaming Commission announced that it had received six bids with the goal of offering mobile sports betting in the state, Meadowlands Racetrack operator Jeff Gural remained in an ornery mood this week at the Racing and Gaming Conference held at Saratoga Springs, N.Y.

“I’m being nice — I won’t be so nice later,” Gural said on Tuesday morning during a Q&A portion of one conference panel, as he warned two elected officials that if the process fails, “You’ll have everybody laughing at you.”

And as part of the last panel of the two-day event at the iconic racetrack, Gural showed he was not joking.

As owner of two upstate New York harness racing tracks — Tioga Downs and Vernon Downs — Gural has reason to have mixed feelings about New York’s plan for a mobile betting tax rate of at least 50%.

The more inefficient a formula that plays out in New York, the more likely it is that the FanDuel Sportsbook at this Meadowlands site — the highest-grossing such book in the country — suffers minimal harm. But for the 79-year-old New York and New Jersey real estate mogul, putting forward what he sees as a poor business model seems to offend Gural most of all.

Asked for his overall opinion of the New York plan, Gural groused, “I don’t think they got anything right. They got everything wrong.”

Cuomo blamed for gambling missteps

A key target of Gural’s wrath is outgoing Gov. Andrew Cuomo, who is blamed for a curious initial decision by the commission in 2014 to award only three of a possible four commercial licenses. That left out the Tioga Downs proposal offered by Gural, who spearheaded the move to bring private casinos to the state in the first place.

The state soon reversed course by reviving the process and ultimately granted Tioga Downs its casino license — but Gural hasn’t forgotten what he sees as a deliberate slight.

“[Cuomo] had a scheme up his sleeve as to who would be the winners and who would be the loser — starting with me being the loser,” Gural told the audience of his fellow Democrat.

As for the new sports betting proposals, Gural predicted, “They will award the licenses to DraftKings and FanDuel — unless they are really stupid” and choose to bypass the daily fantasy giants who dominate the New Jersey sports betting landscape.

The scenario Gural lays out has such winners agreeing to a sky-high tax rate at first — then within two years, threatening to stop spending money on marketing designed to lure gamblers from illegal, offshore sites to the regulated industry unless the state agrees to lower the tax rate.

Such an outcome, Gural said, will amount to a “bait and switch.”

The smart approach for the commission, Gural suggested, would be to require winning sports betting operators to meet their projected revenue figures or be subject to losing their licenses within two years. “But they probably won’t,” Gural said.

Luring young fans to track has proven a daunting task

Asked how horse racing might evolve into attracting younger bettors — an obsession of most executives in the industry — Gural said he tried with the $120 million grandstand he built at the Meadowlands eight years ago. But he said that hasn’t attracted a younger betting clientele, in spite of having been told that building such a “cool” new site would do the trick.

“Young people have no interest, because they don’t want to sit around for a half-hour [before the next race goes off],” Gural said.

Still, Gural offered a nod to the event site’s longstanding summer cachet.

“If I say to someone, ‘I’m going to Saratoga,’ it’s cool,” Gural said. “But if I say to someone, ‘I’m going to Aqueduct,’ I’m [thought of as] a degenerate gambler.”

The core problem in New York, Gural added, is that “New York doesn’t really like gambling — and the Assembly really hates gambling.”

As Gural’s panel was titled “What’s Next on the Gaming Horizon?” there was discussion by other panelists of potential gambling innovations to come.

One suggestion further irked Gural. “Why would any parent be wanting their kid to be playing video games for money? That’s insane. It’s crazy,” Gural interjected.

When it was pointed out that a handful of young gamers have earned six- and seven-figure prizes from winning such tournaments, Gural said, “I have no problem with that.” His ire was directed at the idea of amateur players tapping into a parent’s credit card information in an ill-fated get-rich-quick scheme.

NFL also gets under Gural’s skin

Three years after a U.S. Supreme Court ruling struck down a federal law mostly limiting legal, regulated sports betting to Nevada, Gural remains annoyed with what he sees as the NFL’s hypocrisy.

“This may be the only time in history when the loser of the lawsuit is the biggest winner,” said Gural, who spent what for most would amount to a small fortune bankrolling a six-year legal fight by New Jersey against the federal government, the NFL, and other sports organizations.

“That was the dumbest thing I have ever seen,” said Gural, who in the fall of 2018 was not permitted by the Giants and Jets — who control that section of the Meadowlands Sports Complex — to put up signs instructing football fans as to the location of shuttle buses that would take them to the nearby FanDuel Sportsbook to place wagers.

As for the number of online betting licenses, or “skins,” Gural noted that an earlier New York proposal called for up to 14 licenses with a $25 million upfront fee. While the Cuomo-led plan now in place calls for a minimum of four sportsbook operators, Gural said the state likely will be throwing money away. That’s because, Gural said, when he asked an industry expert if there really were 14 companies willing to pay the $25 million, he was told, “Jeff, there aren’t 14 companies — there are 20.”

Fixed odds not in cards at Meadowlands just yet

Finally, when asked by NJ Online Gambling what he thought of Monmouth Park’s plan to go “all in” on fixed odds wagering next summer, Gural sounded skeptical.

“We heard a few years ago about how successful exchange wagering was in England and in Australia,” Gural said of the private exchange that allows bettors to offer their own wagers to other gamblers in a parallel marketplace. “But nobody bet on it here.”

“So I said to Dennis [Drazin, Monmouth Park’s operator], ‘Try fixed odds, and we’ll see how it goes,'” Gural added. “Nobody [else] really wants to take that risk.”


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