Waste of the Day: New Jersey Bets $20 Million on Horse Racing Subsidies

Topline: The New Jersey government will pony up $20 million next year to increase the money horse owners earn for winning a race, under a new law signed by Gov. Phil Murphy this September.

New Jersey subsidizing gambling winnings? YGTBK

It’s the latest step in a business competition that is hurting taxpayers. New York and Pennsylvania each boosted their horse racing industries with over $200 million in subsidies last year.

Key facts: New Jersey will spend $20 million each year through 2029 — for a total of $100 million — to subsidize horse race “purses” and help racetracks attract more business.

Proponents say higher winnings mean more horses will compete in New Jersey, preserving jobs and boosting tax revenue from what the state says is a $3.2 billion industry.

The subsidies themselves, though, will go straight into the pockets of wealthy horse owners.

The money will be split among three race tracks, with half going to Monmouth Park in Oceanport.

Murphy originally wanted to spend only $15 million per year, but the Democrat-majority legislature increased the cost in its final spending bill.

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The State’s neighbors pay billions – sweet

Background: Jeffrey Gural, owner of the Meadowlands Racetrack, told NorthJersey.com the subsidies are necessary to help his business compete with those in Yonkers, New York and the Poconos in Pennsylvania.

He has a point. Pennsylvania’s government has spent $3.5 billion on horse racing since 2004, and 90% of winnings are taxpayer-funded, according to The Center Square.

New York spent $2.3 billion between 2008 and 2021, according to the Times Union.

NY Gov. Kathy Hochul gave Belmont Race Track on Long Island a $455 million loan last year, though that’s something of a misnomer. The loan will likely be repaid using state subsidies over the next decade, since the track’s owners at the New York Racing Association have not turned a profit in years.

Critical quote: “Horse racing is not a public service, a benefit to the public at large, or frankly a benefit at all,” Peter Chen, a policy analyst with the progressive think tank New Jersey Policy Perspective, told NorthJersey.com. “It is, rather, a private multibillion-dollar industry, whose profits go largely to the pockets of executives and investors, not everyday New Jerseyans.”

Summary: At least gamblers have a chance at making their money back. New Jersey taxpayers are unlikely to be quite so lucky.

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This article was originally published by RealClearInvestigations and made available via RealClearWire.