New Jersey Takes Another Step Forward on Horse Race Wagering in Bars and Restaurants

On January 17, 2012, New Jersey Governor Chris Christie signed a bill, now codified as P.L. 2011, c.228, which establishes a pilot program for wagering terminals at “eligible taverns, restaurants, and similar venues where food, alcoholic beverages, or both” are served for on-premises consumption –i.e, bars and restaurants.

The legislation provides that the New Jersey Racing Commission may issue a license to an entity that currently leases a state-owned racetrack, for the establishment at not more than 12 bars of not more than a total of 20 wagering terminals. Only one license may be issued, however, a licensed entity may enter into an agreement with another licensed entity that also has an agreement with the state for the lease or sale of a state-owned track to jointly implement this program. The Meadowlands lessee and Monmouth lessee may agree to jointly operate this program (or either can do it itself, but if one does, the other cannot).

The license issued to operate the terminals will be reviewed on an annual basis and expire within three years of issuance. Moreover, terminals are only permitted in the “northern part of the State,” defined as Bergen, Hudson, Essex, Passaic, Union, Morris, Somerset, Hunterdon, Warren, Sussex, and northern Middlesex and Ocean Counties.

Applications for a terminal are to be jointly submitted by a bar and by the track lessee to the Racing Commission; the application must establish financial stability; good character, honesty, competency, and integrity; the absence of a conviction of a crime involving fraud, dishonesty, or moral turpitude; and any additional standards that the Racing Commission may establish by regulation. In deciding whether to grant a license, the Racing Commission is required to consider the proximity of the proposed location to existing or proposed racetracks, OTWs, and simulcast facilities; if the Racing Commission finds that the issuance of a bar license would be inimical to the interest of any of those, it may not license the facility.

On March 30, 2012, the Racing Commission temporarily adopted regulations to govern this pilot program. A bar license requires an application fee of $2,500. The program operator and the bar must provide the Racing Commission with information regarding the location’s physical plan, security, proposed number of terminals, and proposed hours of operation. Moreover, the application must establish to the satisfaction of the Racing Commission that the bar has sufficient financial resources to establish and conduct wagering on-site. The applicant bears the burden of establishing that the issuance of the license is not inimical to the interests of a planned or existing racetrack, OTW, or simulcast facility. The applicant must also describe the plan for its establishment, including the number of jobs expected to be created and the gross revenues expected to be generated.

Once an application is deemed complete, the Racing Commission is required to notify all existing racetracks, OTW licensees, and simulcasting facilities of the competed application, and the scheduled date on which the Racing Commission will conduct a hearing on the application, so that comments can be submitted.

Each employee of the bar, and each person who is responsible for supervising the bar (whether an employee or not) is required to be licensed by the Racing Commission as either a pari-mutuel employee or vendor.

Licenses must be renewed annually, for a $1,000 renewal fee.