A New Jersey government agency has been accused of illegally offering hundreds of thousands of dollars in wagering credit to a high-rolling horseracing bettor via the state’s account wagering system. The allegation came to light via documents filed in a lawsuit brought by the owners of New Jersey’s Freehold Raceway, who were protesting the decision to award management of the state’s online and telephone horse betting operations to TVG, the US subsidiary of betting exchange Betfair.
TVG officially assumed responsibility on Friday for processing account wagering operations for New Jersey racetracks via 4NJBets, the online portal through which Garden State residents place their pony punts. TVG is well established in US advance deposit wagering circles, handling $650m in wagers in 2011. Darby Development Corp. (DDC), the Dennis Drazin-led company that manages New Jersey’s Monmouth Park racetrack, selected TVG to handle the account wagering job last month and the state Racing Commission conditionally approved the deal on Wednesday.
In October, DDC temporarily assumed control of the state’s account wagering business from the New Jersey Sports and Exposition Authority as part of Gov. Chris Christie’s plan to get the state out of the horseracing business. But a lawsuit filed against the sports authority by Penn National Gaming and Greenwood Racing, the owners of Freehold Raceway, complained that Freehold representatives had not been consulted on decisions affecting the account wagering system, including the decision to award the contract to TVG. However, the spotlight has now focused on documents relating to the Freehold suit that indicate the sports authority broke the law by extending credit to a high-rolling gambler.
As detailed by The Record’s John Brennan, it appears Egyptian-born businessman and horse breeder Ahmed Zayat (pictured smiling above) was extended at least $286k in wagering credit by the sports authority. Despite this being a clear violation of state law, this apparently only became a problem when Zayat started bouncing checks. The Daily Racing Form quoted an email included in the lawsuit saying Zayat would bet up to $200k per weekend and the authority allowed him to do so on credit “with the agreement the funds will be received via wire the next banking day.”
In another email, the sports authority’s director of account wagering Carol Ciarco wrote that the “courtesy” extended to Zayat “has helped attribute [sic] to our success.” At that point, overall account wagering handle was up 15%, thanks to Zayat’s $8.3m in wagers. But as of late January, Zayat’s debt to the sports authority was $286k, and Zayat was told to pay up by Jan. 31 or the matter would be turned over to the state attorney general. (Would have loved to have listened in on that phone call… “yeah, so, our disregard of the law had led to someone else disregarding a different law. Lil’ help?”) The January 31 deadline came and went but Zayat was apparently having difficulty repaying the final $200k of his marker.
The sports authority’s vice-president Ralph Marra acknowledged the existence of the debt, but told Brennan that Zayat had wired the sports authority $200k on Thursday, “so the debt is satisfied.” But Zayat has denied paying any money on Thursday, telling Brennan: “I don’t know who is playing games here.” Zayat added that the sports authority had made “many mistakes” with his account’s bookkeeping, while confirming the perks the sports authority had granted him. “I am a preferred client, and I am treated as such.”
The sports authority issued a statement on Friday, saying it “vigorously disputes the allegations” made in Freehold’s complaint. No matter how this issue gets resolved, it’s epically bad timing, given that New Jersey is preparing to engage in a public relations war with Nevada over whose online gambling regulatory skillz are superior.