By T. D. Thornton
After being unable to agree to a legislative deal that would end the state-mandated oversight of the New York Racing Association (NYRA) by returning it to some form of private or public/private control, Gov. Andrew Cuomo announced on Friday night that the NYRA Reorganization Board's oversight of the franchise would be extended for an additional year.
This means that the state's control of operations at Saratoga Race Course, Belmont Park, and Aqueduct Racetrack will now run at least two years past the three-year tenure Cuomo initially intended when the takeover first took effect in 2012.
The extension was announced via a posting on the governor's website along with a number of other unrelated end-of-session political agreements. It read: “This agreement extends the New York Racing Association Reorganization Board until Oct. 18, 2017, continuing the Board, which has successfully turned around NYRA's finances since its exit from bankruptcy in 2012. This agreement preserves the valuable public window into the operation of racing and wagering at New York's premiere racing facilities, and into the use of statutory racing support payments.”
In 2012, Cuomo seized control of the inconsistently profitable NYRA when it was $25 million in debt, had a high rate of catastrophic equine injuries, and had no systematic plan for investing in its facilities and improving customer-facing amenities. The re-org board had originally been slated to serve through October 2015, but last year, the deal also got extended by one additional year.
On Apr. 12, 2016, after 3 1/2 years of operating as a government-appointed committee, the NYRA re-org board unanimously advanced a three-pronged set of re-privatization transition options to state officials. The board's stated goal was to have some new form of NYRA governance passed by elected officials before the June 16 end of the current legislative session.
Also at that Apr. 12 meeting, the re-org board announced that NYRA has been debt-free since April 2014, shown a $5.2 million operating surplus for the last two years combined, decreased equine injuries below the national average in each of the past three years, and has spent more than $20 million at all three racetracks during 2013-2015 to enhance the guest experience.
However, an audit of NYRA released by the office of the New York State Comptroller June 10 detailed “significant flaws” and “very misleading” revenue calculations for racing operations while criticizing the organization for having no formal written plan to make the non-gaming side of the business profitable. Although the audit stressed that the once-bankrupt NYRA's overall financial condition is “sound,” the report underscored that such broad financial health is only a result of video lottery terminal (VLT) revenue subsidies, and that traditional racing operations “have generated multimillion dollar annual deficits” for a block of five consecutive years.
In the interim between the April re-org board meeting and the June 16 end of the legislative session, lawmakers and the governor had proposed dueling legislative solutions to bring NYRA back to private control.
Cuomo was behind a bill that would have given him greater influence over the makeup of a new oversight board while reducing NYRA's revenue-sharing cuts from casino gaming at Aqueduct. Bipartisan lawmakers instead this week passed their own bill without changes to revenue sharing and a different makeup of the board. Neither proposal ended up getting signed into law. @thorntontd
Not a subscriber? Click here to sign up for the daily PDF or alerts.
