“If the rate of change outside of an organization is greater than the rate of change on the inside, the end is near.”  Jack Welsh, Jr., Retired CEO of General Electric, Management Consultant & Author

Good Afternoon Ladies and Gentlemen,

Thank you for the opportunity to speak with you today on matters of racing and gaming in the State of New Jersey.  My name is Scott Palmer.  Following my graduation from the University of Pennsylvania school of veterinary medicine in 1976 I moved to New Jersey to practice because your predecessors built the Meadowlands Racetrack. I am a past president of the American Association of Equine Practitioners and currently serve as chairman of the AAEP racing committee.  I own and operate the New Jersey Equine Clinic, a referral hospital for horses in central Monmouth County.  The New Jersey Equine Clinic has been in continuous operation for the past 34 years, serving the horse community of New Jersey and neighboring states.

Historically, the issue of racing and gaming in New Jersey has been politically divisive and viewed with a special interest paradigm that has polarized and paralyzed the State of New Jersey.  A new look at the racing and gaming industries in New Jersey is long overdue.  Both the racing and gaming industries of New Jersey are in trouble.  Declining revenues reflect pressures of the national and regional economy as well as increasing competition from surrounding states.  This issue has been the subject of numerous editorials and is hotly debated in forums around the state.  There is a great deal of “heat” and very little “light” being shed on the issues at hand.

There is the “North vs. South” perspective.  There is the “horsemen vs. casino” perspective and there is, of course, the Democrat vs. Republican perspective.  By viewing the racing and gaming issue in the Mid Atlantic region through any of these lenses, we polarize the participants and breed conflict.  The “win-lose” mentality is a “non-starter” in the current environment.  New Jersey racing and gaming can no longer be viewed as a special interest issue.  This is a State of New Jersey issue.

The State of New Jersey is facing tough and increasing competition in the racing and gaming market from New York, Pennsylvania, Delaware.  Maryland is on the verge of joining the gaming market as well.  Our neighbors have established convenience market share in this industry that is draining millions of dollars from New Jersey on a weekly basis.  In the meantime, we continue to argue over the relative merits of supporting one segment of the industry over another.  By doing so, we remain mired in the weeds of a counter-productive dialogue and are hobbled by a lack of vision and a lack of commitment to doing what is in the best interest of the state as a whole.

The solution is simple in concept, but extremely difficult to deliver to constituent groups in a form that is palatable to all concerned.  The only way for New Jersey to be competitive in the Mid Atlantic racing and gaming market is for the casino and racing industries to work together to create a unified racing and gaming marketplace that will keep New Jersey dollars in New Jersey while attracting wagering interests from around the world.

Building a consensus on the racing and gaming issue will require leadership with vision that extends beyond the respective special interests. It will require political will grounded in the principle that state legislators will make decisions that are in the best interest of the state as a whole and not any particular region.  It will require compromise, cooperation and dedication to a new vision of New Jersey racing and gaming.

Success will require a business plan that enables and empowers New Jersey racing and gaming markets to compete on a level playing field with New York, Pennsylvania and Delaware.  Mr. Welsh’s rate of change quote is prophetic and very appropriate to our condition.  Both segments of the racing and gaming industry in New Jersey need to reinvent themselves in order to meet the market needs of a changing demographic.  The status quo is no longer an option.  You may not like to hear it, but one of the most straightforward and definitive solutions is to put slot machines or video lottery terminals at the Meadowlands.  This change alone would generate 1 billion dollars of new income for the State of New Jersey each year.  If that option is truly off the table, then activation of the existing licenses for off track wagering facilities could generate up to 60 million dollars per year.  By combining this initiative with alternative wagering opportunities, the convenience gaming losses of New Jersey to our neighboring states can be reduced or eliminated.  Additionally, this influx of revenue will make New Jersey racing profitable once again.

By working together, we can re-define the issue of racing and gaming in New Jersey and create a model for innovation that supports both segments of the industry.  For example, promotional efforts at the racetrack could create rewards that could be redeemed in Atlantic City and vice versa.  Divided, we will continue to lose billions of New Jersey dollars to the casinos and racinos of our neighbors.  Divided, we will lose open space in New Jersey and squander one of our most precious natural resources and recreational opportunities – the horse industry.  The agribusiness of New Jersey is in large part dependent upon the horse industry in the state.  Thousands of acres of land in Green Acres and Farmland Preservation are invested in the horse industry.  The horse breeding market in New Jersey has dwindled from an innovative and successful program that existed 30 years ago to a shadow of its former self today.  The troubled economy is certainly a factor, yet Pennsylvania horse breeding programs are stronger than ever in the same marketplace due to the influx of gaming dollars and cooperative efforts between casino and racing operations.

A successful business model can be found right across the Delaware River.  We can build upon that example with unique innovations and a cooperative effort that will create a powerful state-wide economic engine that combines both the North and the South, both the casino and the racing industries.  To paraphrase Mr. Welsh: if the change within the New Jersey racing and gaming industry does not keep pace with the change in our competitive environment, the entire state will suffer the consequences of our greed and our shortsightedness.  It’s time to stop the madness and work together.  There are billions of dollars at stake, as well as the agriculture future of the State of New Jersey.

Veterinary services in the State of New Jersey are world class.  Equine veterinary care has evolved to support the horse industry in the state.  The sophistication of equine veterinary care is supported by the economics of racing.  Modern medical care in a non-insurance subsidized business model depends upon the client being able to afford the quality and sophistication of medical care that is available.  This includes state-of-the-art diagnostic tools such as digital radiography, digital ultrasonography, nuclear scintigraphy and magnetic resonance imaging.  It includes sophisticated therapeutic treatments such as minimally-invasive arthroscopy, laparoscopy, endoscopic surgery of the upper airway, laser surgery and hyperbaric oxygen therapy.  These facilities and services cost millions of dollars to provide with highly-trained professional and technical staff.  These costs are not paid by the taxpayers of New Jersey or by philanthropic donors.  They are underwritten by veterinarians, small business owners who endure enormous amounts of debt to provide this type of care to horses in New Jersey.  These services will not be available to horses in New Jersey without a healthy racing industry to justify the high investment and maintenance costs.  Veterinary services are just one example of a large number of agribusinesses in the state that depend upon racing to remain in New Jersey.  This is not about transient labor at the racetrack.   This is about a wide range of agribusiness interests and the jobs associated with them that include farmers, retailers, university professors, doctors, lawyers, accountants and other professionals.

You have challenged us to provide an innovative business model to make racing successful without casino subsidies.  We have that plan.  We are counting on you to make good business decisions that will support the entire racing and gaming industry in New Jersey, not one segment to the disadvantage of another.  As President Theodore Roosevelt once said: “The welfare of each of us is dependent fundamentally upon the welfare of all of us.”  This matter must be resolved with transparency, integrity and commitment to the welfare of the entire State of New Jersey.  Anything less is a formula for failure and that is unacceptable.

I’d like to conclude with a few comments on the subject of change.  Change is often an uncomfortable experience.  Resistance to change is usually rooted in a perception that change equals loss, either of power or money.  In order to overcome this resistance to change, effective leaders must provide a vision of the future that inspires us to make change, or the level of dissatisfaction with the status quo must reach a threshold to force change.  Right now we have a unique opportunity.  We are faced with a choice.  We can choose to support the status quo.  And how is that working out for us?  Or we can choose to create a New Jersey racing and gaming policy that actually works to harness and promote all of the potential that New Jersey has to offer.

Thank you once again for the opportunity to speak with you today.  I extend a personal invitation to any or all of you to visit the New Jersey Equine Clinic, built upon 130 acres of rolling pasture just a few miles west of Freehold that I purchased in 1997 in partnership with Millstone Township and the State of New Jersey through the farmland preservation program.  The premise for that contract was to conduct a veterinary business on the property in support of an equine industry in New Jersey that is now in jeopardy.  I’d love to show you our unique medical facility.  If time does not permit, please visit our website at www.njequine.com and take the virtual tour.

Success is a choice.  What, ladies and gentlemen, would you like to do?

In the spirit of consensus,

Scott E. Palmer, V.M.D., Dipl. A.B.V.P., Eq. Practice

Owner and Hospital Director, New Jersey Equine Clinic

279 Millstone Road, Millstone Township, NJ 08535

Phone: (732) 786-0662  Fax: (732) 786-9292

www.njequine.com