Now at the two-month mark since the conclusion of the Monmouth Park season, some Thoroughbred owners and trainers remain concerned that they can't withdraw the purse money they earned during the May 10-Sept. 13 meet and from the turf-only mini-meet that Monmouth conducted at the Meadowlands Sept. 19-Oct. 17.
When TDN first reported on the track's cash flow difficulties Oct. 22, Dennis Drazin, the chairman and chief executive officer of Darby Development LLC, which operates Monmouth and its sportsbook, said the payment process is a complicated one that he hoped would be resolved shortly.
But 3 1/2 weeks later, with some horsemen still complaining about not being able to access their winnings, TDN contacted Drazin late Friday afternoon to get an update.
Drazin said Nov. 14 that while progress has been made in making payments, Darby is still waiting to receive money from the state of New Jersey that it will use to fund the purse account.
“We have been paying out the purses since [TDN's original story],” Drazin said. “So any money that we get in, we put right into the purse account, and we've probably paid over a million dollars, maybe a little higher than that, maybe [around] $1.3 million.
“Let me make it clear to begin with, the responsibility to pay purses at the racetrack is the responsibility of the permit-holder, which is us. So we're not saying, 'It's not our responsibility.' I can assure you that everyone will be paid,” Drazin said.
“But having said that, the delays are occasioned by not getting all the funding that we're supposed to get in the budget,” Drazin said.
“The budget process that took place in July gave us an allocation of $3.5 million,” Drazin said. “We have not received that money yet. We have filled out the applications that we have to to get that money coming, but we don't have that money yet. If I got that money at any point soon, we'd put all that's needed to pay all the purses immediately. We would not divert it anyplace else.”
So roughly how much is still outstanding?
“I'm not sure without checking with the bookkeeper,” Drazin said. “I don't just want to give you a number off the top of my head, because I know he's been paying some of the purses and probably has dissipated a lot of what's owed.”
Drazin wanted to clarify that when he speaks of “the state” he is referring to several different sources.
One is the New Jersey Racing Commission, which acts like a clearinghouse in distributing money after first making sure that the post-race drug tests are clear and that incoming money from simulcasting is being properly tallied.
Another is the New Jersey Sports and Exposition Authority (NJSEA), through which some incoming account-wagering money must pass first.
A third is the $3.5-million budget allocation that Drazin mentioned above. The purpose of that payment is to offset cost increases from a tax hike on revenue from sports betting.
A fourth is a $10-million annual subsidy that the legislature granted to Monmouth, but that money isn't scheduled to arrive until the end of this year and is earmarked for next year's purses.
“The way it kind of works is that Monmouth, the OTWs, account wagering, they all are required to file these seven-day reports, send the money to the commission so that they can make sure the money is being distributed correctly; little pieces to the breeders, for example, that they pay out,” Drazin said.
“That money from Meadowlands, as of today, has not come in yet. But we know the racing commission has indicated that they are sending it, so we expect that money this [coming] week,” Drazin said.
“We did get some money from another source [late Friday afternoon], and that money will be distributed probably Monday or Tuesday,” Drazin said. “That money [came] from the NJSEA, because all of our account-wagering money from TVG goes to them first. Then they pay the bills that are required to be paid from their end.
“For example, the real estate taxes at Monmouth Park, which are about $1.8 million each year, the Authority gets the bill because they own the land,” Drazin said. “They use our account-wagering money to pay the bills and then send us the balance. So we did receive a portion of [that] money to help pay out some of the purses.
Asked how Darby/Monmouth determines which horsemen get paid when, he explained it as a first-in/first-out type of system.
“Requests that come in first get paid first,” Drazin said. “So horsemen–and I'm not being critical, because I do the same thing sometimes–you wait until the meet's over, and you're shipping someplace else, [then you] request your funds. So people who requested the money [first] would have gotten the money first. The rest of them are in the order of when the requests came in.”
TDN asked Drazin if horsemen being unable to withdraw winnings this year was unusual from how Monmouth traditionally operates.
“Not really,” Drazin answered. “We had a problem two years ago with the commission where they were eight months behind sending us money. And frankly, when the commission doesn't pay us, like in that year, we've loaned the money to the purse account from our own funds in order to make sure the horsemen got paid.”
So why didn't Darby just loan the money this year?
“Well, the horsemen this year were overpaid about $3 million from last year,” Drazin said. “We kept anticipating we were going to get the monies from [the state sources], and if it got delayed [much further], my intention would be to fund the account myself to make sure everyone gets paid.”
Drazin said that, “At the end of the day it's our responsibility. Whether we have to wait for the money or not, we're going to make sure the purse account has enough money and that everybody will get paid everything that they are owed.”
Drazin outlined several scenarios moving forward that might help avoid a cash crunch in subsequent seasons.
“Just to be clear with you so you understand, when you start the [racing season] in May, you've accumulated monies from when your meet closed the previous year until the day you open,” Drazin said. “Then, in addition, you're getting a $10-million subsidy from the state, which requires a formal report to be issued first before that happens. I think the commission will allocate that money this December.
“So going into next year's meet, you would have the $10 million, you would have whatever accumulated in the way of purse revenue, and then you have your daily money that comes in as the meet goes on.
“You project purses for your fiscal year, so you're projecting purses [by] including money that's going to come in for simulcasting in the second half of October, when you're not running, [and also] November and December. And you couldn't possibly receive all that money until [we're] finished with November and December,” Drazin said.
“So a better practice going forward is probably not to project October, November and December's revenue in the purse account, but carry that over until the following year, so you're not making horsemen wait,” Drazin said.
“The alternative, which the horsemen have suggested to me–some of them–is cut days, cut purses, so you don't run into this problem next year,” Drazin said.
“But the majority of horsemen want the higher purses, and they don't want to give up days,” Drazin said.
TDN asked Drazin what his general message is for horsemen who have been contacting track executives and the bookkeeper about when they are going to get their money.
“I would hope that everyone would be patient,” Drazin said. “For the past 12 years we've operated the track, and done so at significant losses. The horsemen operated the track before, so no one was asking the horsemen for the money. But Darby took over in terms of the lease last August, so it's Darby's responsibility.
“So we're asking them to bear with us. We'll get them the money as quickly as we can. I can certainly assure everyone that everyone will get paid every dollar that they're owed,” Drazin said.
The post Drazin On Monmouth’s Cash Flow Woes: ‘Everyone Will Get Paid Every Dollar That They’re Owed’ appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.
