Stakeholders push for NYRA privatization, support from lawmakers - Thoroughbred Horsemen's Association

Stakeholders push for NYRA privatization, support from lawmakers

By: Tom LaMarra

Posted: Jan. 17, 2016

New York lawmakers Jan. 17 pledged to push for privatization of the New York Racing Association and work to correct a situation that could cost NYRA, horsemen and breeders about $20 million in video lottery terminal revenue per year.

The action came the same day Gov. Andrew Cuomo, according to the Albany Times Union, indicated he plans to include the privatization of NYRA, which operates Aqueduct Racetrack, Belmont Park and Saratoga Race Course, in his budget proposal after delaying the move the last few years.

Industry stakeholders, in a less-than-one-hour hearing held by the Senate Racing, Gaming and Wagering Committee, outlined their concerns—primarily the structure of NYRA and a deal by which Nassau County Off-Track Betting Corp. derives revenue from VLTs at Resorts World Casino at Aqueduct. Under legislation, Nassau OTB can have 1,000 gaming devices at Aqueduct, but Genting, the casino owner, thus far has only dedicated revenue from existing machines to the betting corporation.

“We will do everything in our power to (stop) taking away from the racing industry,” said Sen. John Bonacic, who chairs the committee. “We will work to correct the injustice (of this) arrangement.”

“We look forward to working with you to get details of (a privatization deal) and promote legislation in that area,” Sen. Phillip Boyle said. “We need to keep (NYRA) in balance, but we need to privatize it.”

New York Thoroughbred Horsemen’s Association President Rick Violette Jr. said the organization supports privatization, but he focused more on other issues he believes must be part of the equation. One of them is the way the deal between Genting and Nassau OTB has played out.

“Fixing NYRA issues doesn’t necessarily fix the horsemen and the breeders,” Violette said. “There is nothing equitable, nothing fair about this (VLT) setup. Racing will now be getting Nassau OTB out of debt.”

Violette and Jeff Cannizzo, Executive Director of the New York Thoroughbred Breeders, explained that Genting not only assigned 460 VLTs to Nassau OTB; it gave them the most productive. Violette said before the arrangement was put into place, the more than 5,000 VLTs at Aqueduct generated a win per machine of about $440 per day. Now, the Nassau OTB-dedicated devices—no revenue from them goes to purses—are at a win per machine of $900, while the return on the others at the casino has dropped.

“We’re losing close to 33% (of our revenue),” Violette said. “And it can get worse because that’s only 460 machines.”

He noted that adding more machines for Nassau OTB would benefit Genting, because the company gets the 8% or so that goes to horse racing and breeding from the remainder of the VLTs in the building.

“The second-largest agriculture industry in the state has to get more attention than we do,” Violette said. “The government in New York State should be helping us expand, not retard the business. It’s not stable, but we don’t get the attention a major industry should get.”

Cannizzo offered statistics that show how the racing and breeding industry in New York has grown since 2004. He said purses and breed development funds have fueled the growth in participation in the state, and noted that 55% of the Thoroughbred population in New York are New York-breds.

“Without this New York-bred program there is no racing in New York State,” Cannizzo said. “Some of the largest and most commercial operations have taken a step into New York, but they could be fully invested if there was some certainty down the road.

“The time is now. We have the most skin in the game—we’re the owners and breeders. But we don’t know what’s happening year to year in racing in the state.”

Bonacic during his comments also said lawmakers are aware of the situation by which Delaware North Companies, owner of Finger Lakes Gaming & Racetrack, receives a tax break because of new casino competition, but VLT purse revenue at the track isn’t protected. Horsemen at Finger Lakes have said they believe racing could end if purses are reduced by millions of dollars a year.

The NYTB statistics show that of total breeders’ awards in New York, 49% are paid at Finger Lakes, where at least 70% of starters are New York-breds.

(Belmont photo courtesy of Coglianese Photos)