Genting New York Reveals $400-Million Aqueduct Racetrack Expansion

June 29, 2016

A 750,000-square-foot expansion is planned for Aqueduct Racetrack in New York City, with construction work on the project set to commence in December. The expansion plan has not been introduced to the New York Racing Association (NYRA) yet.

The amount of $400 million will be spent on the project. Genting New York, the casino operator in charge of the racetrack and the nearby Resorts World Casino New York, said at a meeting with the NYRA Franchise Oversight Board that local officials have not been presented with rendering of how the upgraded facility would look. In addition, the project will need to be approved by the state in order to be materialized.

Genting New York is planning to add additional gambling space, hotel rooms, entertainment and retail areas at the existing racetrack.

Commenting on the announcement, Resorts World Casino New York President Ryan Eller told the board that the expansion project comes as the first phase of a larger plan for turning the racetrack into a full-scale integrated casino resort.

If the plan is given the green light, it might result in Genting New York positioning itself as one of the candidates for the operation of downstate full-fledged casinos once legislators and gambling regulators decide to provide the necessary licenses for the purpose. The said licenses would make it possible for video-lottery terminals to be replaced with real slot machines and table games to be added to gambling venues in the region.

The Franchise Oversight Board is responsible for monitoring NYRA’s finances. The NYRA itself operates racing options at Aqueduct. However, the association has not been presented with the expansion plan yet.

During the meeting with the Oversight Board, a member voiced concerns about the impact the project would have on purses if it fails. Questions were also raised about the extent of disruption on racing during construction. Expansion is expected to be completed early in 2019.

Mr. Eller admitted that there indeed will be significant negative impact on purses if the Aqueduct market does not expand as initially planned. He also noted that if New Jersey eventually legalizes the establishment of two commercial casinos outside Atlantic City, this would affect New York’s gambling market in quite a negative manner, as well.

http://www.casinonewsdaily.com/2016/06/29/genting-new-york-reveals-400-million-aqueduct-racetrack-expansion/

$200 Million Of School Funds Went To Racetracks Instead

In New York state, lottery money is supposed to pay for public education. So why did officials use it to bail out a horse racing promoter? A BuzzFeed News investigation.

posted on Sept. 11, 2015, at 12:04 p.m.

Kevin Townsend

BuzzFeed News Reporter

Before a sellout crowd at the Saratoga Race Course, Triple Crown winner American Pharoah (#2) lost his throne in a final burst from Keen Ice (#7). Kevin Townsend for BuzzFeed

The state of New York diverted hundreds of millions of dollars from education to a scandal-plagued horse racing operator, Buzzfeed News has found.

Seven years ago, the state legislature carved out a special agreement that so far has taken more than $200 million in lottery revenue — money that otherwise goes to New York’s beleaguered schools — and given it to the New York Racing Association (NYRA), a not-for-profit corporation known for running of one of America’s most glamorous horse races, the Belmont Stakes, but also for allegations of corruption ranging from racetrack tellers laundering drug money to the chair buying the favor of a top legislator. The sweetheart deal was intended to help the racing organization regain solvency and repay a large state loan, but in the end NYRA managed to keep the loan as a gift — and to keep the sweetheart deal, too.

Now the Audit Director of the Office of the New York State Comptroller has told BuzzFeed News that the state agency has completed an examination of possible misuse of NYRA’s capital expenditures. The results of its audit will be released in the coming weeks.

NYRA’s chief spokesperson, John Durso, Jr., told BuzzFeed News he could not comment on the audit, but that the racing group has entered a new era: “New management, in place since 2013, began a process which successfully culminated in an operating profit of $1.5 million, the first in 13 years. That’s a result of hard choices, running the organization like a business, and continuing to focus on the interest of our fans.”

The $200 million carveout — the full extent of which has not previously been reported — is only a tiny fraction of New York state’s overall schools budget. But according to Carl Korn, of the union representing New York state teachers, directing that money to the racing association instead of to schools has deprived teachers and students of much-needed resources.

“As this deal was being made, New York state was in the process of dramatically cutting education, leading to 30,000 job losses — roughly 22,000 in teachers,” Korn says. “And what is most outrageous is the poorest districts were hit with a disproportionate amount of these cuts.”

Some of the 5,150 slot-machine-like video lottery terminals at Aqueduct Racetrack casino. Aqueduct earns more from slot machine gamblers than any other casino in the United States. Kevin Townsend for BuzzFeed

The unusual arrangement grew out of a moment of desperation for the racing association.

In 2008, NYRA was deep in Chapter 11 bankruptcy after weathering an investigation that found the organization had cheated the federal government out of taxes on millions of dollars in racing income. The state, which regulates the sport, had moved to give the horse racing franchise to another organization, but NYRA claimed it owned the tracks themselves.

According to lobbyists, legislators, and figures involved in the negotiations, NYRA threatened to wage an all-out, years-long legal battle, possibly even going so far as to shut down the three race courses it runs: the Triple Crown coronation track Belmont Park in Long Island, the scenic Saratoga Race Course just north of Albany, and the aging Aqueduct Racetrack in Queens.

“It was not unlike the United States and the Soviet Union during the Cold War: It was mutually assured destruction,” said James Featherstonhaugh, an attorney and veteran lobbyist for the racing industry who was not directly involved in the negotiations. “There were people in the administration that thought we can win this lawsuit and there were people in NYRA who were certain they could win the lawsuit. But the one thing that was clear to both sides was that if it came down to a lawsuit, racing was likely to be destroyed.”

“There were all kinds of threats,” said Joe Bruno, the former Senate majority leader, whose district included the Saratoga Raceway, and who participated in the negotiations along with representatives of Gov. Eliot Spitzer. “People in office, including Spitzer, were trying to make the best judgments and keep some semblance of order and sanity in the process.”

NYRA prevailed. According to the state inspector general, in February 2008, NYRA ceded its ownership claim of the three racetracks in exchange for a $105 million loan and a new 25-year franchise. Through those same negotiations, NYRA also won $200 million in loan forgiveness and that significant diversion of lottery funds otherwise destined for the education budget.

How the horse racing group won that deal is a tale of its extraordinary political and legal muscle, and the bizarre symbiosis between the state’s lottery and thoroughbred racing.

A century ago, horse racing was one of New York’s only legal forms of gambling. Other types of betting outpaced it over time, and New York itself created one of the most popular ways to gamble in 1967, when it became the second state to institute a lottery. To sell the constitutional amendment legalizing the lottery, the state mandated that all proceeds go to education.

For years, bodega scratch-offs and numbered tickets were the dominant ways New Yorkers bet on the lottery. But in the chaotic days after Sept. 11, when legislators feared state deficits would balloon, Albany legalized video lottery terminals, or VLTs, a kind of digital slot machine with bright screens, flashing lights, and singsong melodies to entice people to bet for lottery jackpots.

Last year, bettors at Aqueduct’s video lottery terminal casino lost over $800 million. Through the New York lottery, those profits go toward the state’s education budget. Kevin Townsend for BuzzFeed

One of New York’s legal peculiarities is that VLTs can operate only at the state’s original gambling venues: horse tracks. Horse racing operators get a cut of the revenue.

“Many of the facilities lose money on their horse racing operations… but consider it simply a cost of doing business for having the VLT license and operating the gaming facility,” said Gordon Medenica, then the lottery’s director, in a 2012 letter to the State Comptroller’s Office. “In the past, one could characterize the facilities as horse racetracks with gaming machines, but now it is much more accurate to describe them as casinos (with a legally required track on the property).” Indeed, they are often known as “racinos.”

Horse racing is a leisurely activity. It takes about 22 minutes to set up each race, according to Josh Cuttita, a seasonal administrator at Saratoga Raceway who grew up watching thoroughbreds at the track. Tractors need to flatten the dirt for the next phalanx of pounding hooves. Jockeys need to switch colors and catch a breath. Digital slot machines, by contrast, offer constant stimulation that has beenscientifically designed to keep players betting.

Just as horse racing became dependent on VLTs, so too did the New York Lottery. Today, VLTs overshadow every other form of betting on the lottery, bringing in about $1 billion of the $3 billion in profit the lottery rakes in every year.

In the February 2008 deal, the legislature agreed to allow VLTs at Aqueduct, a momentous decision that established New York City’s first ever casino. A 2010 state inspector general report on the casino procurement process noted that Aqueduct was “most likely the most lucrative revenue contract ever awarded in the history of the state.” Indeed, the VLT hall eventually built at Aqueduct has become the largestslot machine business in the entire United States, with over $18 billion bet last year at 5,150 machines, more than the Las Vegas giants MGM Grand and Bellagio combined.

NYRA does not operate the casino, but legislators allowed the organization to keep 7% of the state’s take from the VLTs, much more than any comparable operation’s cut. (New York’s eight other VLT casinos are allowed to keep a maximum of $2.5 million a year in capital funds, while NYRA has no cap and typically keeps around $32 million.) And since VLT profits otherwise go to education, NYRA’s windfall is New York schoolchildren’s loss.

Philip Foglia, chief of investigations at the New York State Office of the Inspector General, says the arrangement is legitimate. “There’s nothing essentially illegal about it,” he said. But while NYRA’s unusually big cut did not violate the law, Foglia said, “it does get to the heart of: what is the lottery for?”

Subsequent events also called into question what the sweetheart deal itself was for. According to Richard Rifkin, one of Gov. Spitzer’s lead negotiators, it was granted to keep NYRA afloat and ensure that the organization would be able to repay the state’s $105 million loan. Amid the political chaos of Gov. Spitzer’s scandal-driven resignation, New York agreed to a let the bankrupt NYRA keep the money. But it also kept the lottery carveout that was supposed to help the organization repay the loan. The carveout is in effect until at least 2033.

Soon after getting its bailout and emerging from bankruptcy, NYRA expanded its political contributions, according to online disclosures and analysis by Bennett Liebman, then an Albany Law School professor and NYRA board member who later became deputy secretary for gaming.

“In prior years, NYRA […] did not play the political game to any great extent,” Liebman writes in his analysis, which shows that NYRA became the largest political donor among gaming interests by late 2009.

Between April 2008 and the next major election in November 2010, its PAC made over a quarter million in political donations, including $50,000 to Gov. David Paterson, Eliot Spitzer’s successor, and roughly $200,000 to legislative candidates and political parties.

Asked for comment about NYRA’s bankruptcy settlement, the two state entities that monitor video lottery terminals — the State Comptroller’s Office and the Franchise Oversight Board — both replied: “The document speaks for itself.”

Resorts World, New York City’s first casino, at Aqueduct Racetrack in Queens. Kevin Townsend for BuzzFeed

On the last Saturday in August, when 12-to-1 long shot Keen Ice beat American Pharoah, the first Triple Crown winner in 37 years, sellout crowds filled the stands at the Saratoga Race Course — a bright moment for the New York Racing Association. But despite the attention the race attracted, the organization’s troubles may not be behind it.

Just last month, the State Comptroller’s Office completed an audit of NYRA, including how the organization used some of the money it received from video lottery terminals. According to Frank Patone, the comptroller’s audit director, the probe, which has not been previously reported, looked at whether NYRA improperly used money earmarked for capital expenditures. Patone and other state officials would not comment on the findings of the report, which will be released in the coming weeks. NYRA’s chief spokesperson, John Durso, Jr., said he could not address it, but noted that “in 2012, Governor Cuomo implemented a new reorganization board and a new management team began the process of turning NYRA around, running the racing association like a business, and focusing on our fans.”

An analysis by BuzzFeed News of NYRA’s publicly available financial records shows that it used more than $7 million of those capital funds to cover expenses in years that it lost money

http://www.buzzfeed.com/kevintownsend/200-million-of-school-funds-to-ny-racing-industry#.ubB1bPbPP.

Kevin Townsend is a data reporter for BuzzFeed News and is based in New York. His secure GPG fingerprint is 78C8 FCFB D3F3 7296 0C8D 5666 3744 5357 1F70 1DC8

Contact Kevin Townsend at kevin.townsend@buzzfeed.com.

Genting Buying Support in New York State

Monday, September 15, 2014

Group Pledges to "Bury" Genting in Lawsuits

The Albany Times-Union checks in with an editorial opposing Genting's proposed casino in Tuxedo.

 

The editorial, quite appropriately, accuses Genting of "attempting to bypass the deliberations and virtually buy a state casino license" with its "outlandish" $450 million cash offer for what is a $70 million license fee, and its brash offer to "write you a check today."

Consider how the change in the state's constitution to legalize these full-blown casinos was sold to voters. Recall the controversially favorable — some say unfairly promotional — wording of the ballot proposition last November. It unequivocally stated casinos were intended for "promoting job growth, increasing aid to schools, and permitting local governments to lower property taxes through revenues generated."

Backers portrayed casinos as a panacea for New York's most economically distressed regions, providing jobs and spurring other development. They conjured images of rundown and abandoned resorts in the Catskills and a second lease on life for the struggling region.

The editorial goes on to note that Tuxedo and the surrounding area do not at all qualify as a struggling region; neighboring Tuxedo Park has a median income of over $91,000.

Meanwhile, an environmental group is pledging to "bury" Genting in lawsuits should a license be granted to them. Whether that in itself acts as a deterrent to the location board picking them remains to be seen...but considering the fact that community support is supposed to be one of the criteria, I don't see why it shouldn't. There are 16 bidders, and I myself know of only four that have attracted an active opposition - East Greenbush, Tuxedo, Schenectady, and Tyre. (I'd be more than happy to receive word of any others.) So, it seems to me that there are plenty of options that would better satisfy the community support requirement. And I don't see why the board would make a selection that is likely to be tied up in the courts....unless it finds the riches that Genting is promising too much to resist. Which is surely a possibility.

Sterling Forest Partnership opposes the proposed $1.5 billion casino because it is located on privately owned land surrounded by Sterling Forest, a 22,000-acre state park that was created in 1998 after concerted efforts by environmentalists. The group believes a casino of that size would disturb the environment, and a proposed Exit 15B off the Thruway would bring too much traffic to the area. [Times Herald-Record]

As we mentioned, there was an anti-casino contingent from Tuxedo at the presentation last Tuesday, and Genting at least acknowledged their presence; that as opposed to Saratoga Raceway and Casino, whose Rita Cox feigned ignorance of the roots of the opposition in East Greenbush. Genting says they will work with opponents, and they're making a lot of promises as to how they will assuage environmental concerns; they'll treat runoff, they'll protect wildlife, they'll use low lighting that won't disturb the views. And to that, I'll remind you that Genting pledged to "work closely with NYRA to transform [Aqueduct] into a casino and racetrack that will be the envy of the country.” Yet, we were told at a NYRA board meeting by then president Ellen McClain in December, 2012 that Genting failed to follow through on a promise to keep the racing side of the plant clean - NYRA took over maintenance in 2013 - and repeatedly delayed groundbreaking on the Longshots bar which finally opened in April.

Now, I don't know that we could expect the gentlemen on the location board to be quite that fully immersed in the details and history of all this (although, why shouldn't they be); but I sure would have liked to have heard them question Genting about past broken promises instead of being so concerned about golf courses, proposing hypothetical scenarios that are not going to happen (such as two casinos in the Southern Tier), and asking rote questions about financing, the answers to which are either already in the applications or easily attainable at another time. Kevin Law told the folks in the yellow shirts to come back for the public comment sessions later in the month; and it's indeed the public that will have to ask the kind of incisive questions that we, for the most part, did not hear last week.

And as far as those lavish illustrations of what Sterling Forest will look like? I might also take that with a grain of salt. Here's the original illustration of what the Aqueduct racino was supposed to look like:

And here is what it actually looks like now:

 

 

I was very excited about the big water fountain. Guess it dropped out of the plan at some point, along with the trees and the shrubs and that big tower thing that looks like the Chrysler building. Anyone who was familiar with the old Aqueduct footprint knows that, for all the supposed glitz, it is really a relatively cosmetic change from the original. May be a small point. But the devil is in the details, and should Genting be granted the license to build this thing, I'd bet that it won't be quite as spectacular and glamorous as they portray it to be now.

 

 

 

 

http://leftatthegate.blogspot.com/2014/09/group-pledges-to-bury-genting-in.html

 

 

 

Leave it to New York!

When New York State was inspired to open OTB Parlors, they were placed in POOR NEIGHBORHOODS.

Neighborhoods may have been poor, but they were family-oriented with little crime.

That all changed with New York State's Brain Fart!

Bereft of ideas, incapable of fiscal reform or economic development....here they go again!

08/06/2014

NYRA explores self-betting terminals at bars

By David Grening

 

 

SARATOGA SPRINGS, N.Y. – Almost four years after New York City Off-Track Betting closed, the New York Racing Association is hoping to re-enter the market by placing self-betting machines at select bars and restaurants throughout Manhattan.

 

According to Anthony Bonomo, a member of NYRA’s Re-Organization Board, he and NYRA president and chief executive Chris Kay have met with New York City Mayor Bill de Blasio and hope to finalize a proposal by September that would allow customers who are members of the NYRA Rewards program to wager on machines in some of the city’s establishments. Bonomo said NYRA would attempt to target 50 establishments in the five boroughs.

 

“We’ve had a couple of meetings with the city, the mayor’s office, and the mayor himself to discuss the strategy,” Bonomo said following a NYRA board meeting Wednesday at the Saratoga National Golf Course. “We’re very far down the line, I think, to getting the approval to go forward with this.

 

It’s good for racing, it’s good for the bar owners because they’re looking for things to attract people into their establishments. It will be very controlled under the auspices of the mayor’s office.”

 

In order to avoid needing legislative approval for this to happen, only players who are NYRA Rewards members would be able to place a wager in a bar or restaurant.

 

Re-establishing its presence in the city will be part of NYRA’s long-term planning strategy for re-privatization that it hopes to present to the full board in December, though that plan is not due until April. The plan also will include recommendations regarding NYRA’s two downstate tracks, Aqueduct and Belmont Park.

 

Michael Dubb, who co-chairs the Long-Term Planning Committee with Bobby Flay, said, “There’s no economics operating two racetracks eight miles apart.”

 

Dubb said NYRA has engaged an architectural firm to discuss how to make Belmont “suitable for year-round racing, reducing the size of the grandstand, bring in other potential uses for some of the land,” with the goal of bringing more people to the track. “Every major sports venue in the city has been redone ... so we want to be on a level with them,” he said.

 

Though an alternate use of Aqueduct has not been determined, Dubb said Aqueduct’s “highest value is probably to Genting for future development.” Genting operates the casino at Aqueduct.

In other news:

 

◗ Through the first six months of 2014, NYRA had net income of $13.9 million but had an operating loss from racing operations totaling $5.2 million. NYRA has handled $1.1 billion this year, a 3.1 percent increase over the $1.078 billion handled through the first six months of 2013.

 

◗ While not taking a stance on the recent proposal by trainers to gradually phase out race-day medication, Kay said there will be meetings with NYRA’s Racing Committee and Equine Safety Committee “to address the efficacy of race-day medication, knowing the state will ultimately make the final decision.

 

“We know there are different points of view. We intend to address this issue promptly, fairly, and with all relevant information available to us and consider all stakeholders in this process,” he added.

 

“We’ll do so over the next couple of months, doing what is right for the horse, for us, and for the horse-racing industry.”

 

◗ Kay was awarded a $250,000 bonus and a 3 percent raise on his $300,000 base salary by the board. “He’s restored NYRA to profitability, built a strong management team, improved equine safety, enforced transparency, and taken significant steps to enhance customer experience,” said Vincent Tese, chairman of the Compensation Committee.

 

◗ NYRA reported its fatality rate for horses on the track as 1.0 per 1,000 starters, a significant reduction from 2.1 per 1,000 starters in 2012.

 

◗ Marc Holliday, chairman of SL Green Realty Corp., was named to the NYRA board, replacing Jane Rosenthal, who resigned from the board in May.

http://www.drf.com/news/nyra-explores-self-betting-terminals-bars

NYRA repays Genting Loan, Horse Deaths, Breakdowns, Injuries SUCK!

For the year 2013, there are 419 Reports listed on NYRA Equine Breakdown, Death, Injury and Incident Database

04/04/2014 1:50PM

NYRA to make final loan payment to Genting

By DRF Staff

 

 

The New York Racing Association was scheduled on Saturday to make its final payment of a $25 million loan to Genting, the company that operates Resorts World Casino, adjacent to Aqueduct.

 

The $25 million loan was made on Oct. 22, 2010 by Genting to NYRA as part of an agreement between those parties and the state of New York. The loan was made to help NYRA continue operations until it began to receive statutory payments from the casino. Resorts World opened on Oct. 28, 2011.

 

“This payment of the only loan on our books is another example of our commitment to run the New York Racing Association in a fiscally responsible manner,” Chris Kay, NYRA CEO and president, said in a press release.

 

In addition to paying off the loan, NYRA will have made total statutory payments to New York State during 2012-2014 of approximately $62 million, including $28 million in pari-mutuel taxes.

 

In its release trumpeting the payment of the loan, NYRA also said that monies it has dedicated to equine safety have resulted in significant positive results this year. From Jan. 1 through March 24, Aqueduct experienced a racing fatality rate of 1.2 per thousand starters. This compares to a rate of 2.0 per thousand starters during the 2013 Aqueduct winter meet and 4.2 per thousand during the 2012 winter meet.

 

There were four racing fatalities over the inner track in the calendar year 2014, but there were three additional fatalities over the inner track in December, bringing the total to seven, two less than the 2012-2013 inner track meet.

 

“We take safety very seriously,” said Kay. “These results are a reflection of a resolute commitment made by a great many men and women here at The New York Racing Association. We will continue to do everything in our power on behalf of our equine athletes and their riders.”

 

 

http://www.drf.com/news/nyra-make-final-loan-payment-genting

 

 

Horse deaths, injuries, druggings: No One Cares

And no one cares!

Massachusetts has NOT adopted regulations to prevent the injuries, drugging and deaths of horses.

Aqueduct Breakdowns Lead to Order for Necropsies

By JOE DRAPE

Published: January 12, 2013

 

The New York State Racing and Wagering Board announced Friday that it would order necropsies for all horses that sustain deadly racing injuries at Aqueduct after four fatalities at the track's meet, which opened Dec. 12.

 

On Thursday, Pleasantfriday broke her right front leg while turning for home, sending jockey Cornelio Velasquez to the ground. Pleasantfriday, a 5-year-old mare, was taken away in a van and later euthanized.

 

Necropsies of horses that are fatally injured were among the recommendations of a task force requested by Gov. Andrew M. Cuomo to investigate the increase of fatal breakdowns at Aqueduct Racetrack last year.

 

The four-member panel concluded that more than half of the 21 racehorses that died might have been saved had racing authorities more closely monitored their health and the liberal use of prescription drugs used to keep them racing for purses inflated with money from the track's adjacent casino.

 

"Necropsies for two horses that have died at Aqueduct - Pleasantfriday and Gulltopper - were ordered by the board because circumstances of those incidents raised red flags with investigators and required more information," Lee Park, a spokesman for the board, wrote in an e-mail. "Going forward, the board is ordering necropsies for all horses that are fatally injured while racing on the inner track at Aqueduct."

 

New York racing authorities have also enacted a series of rules - among the most aggressive in the nation - to restrict the use of legal drugs on horses and require trainers to disclose what treatments their horses have received.

 

"The Racing and Wagering Board continues to closely monitor and investigate the circumstances of every breakdown at Aqueduct," Park said. "Comprehensive investigative reports for the four equine fatalities from the inner track meet are being completed by board staff."

 

The rules come as racing wrestles with a drug culture that many of its most experienced officials contend is diminishing the sport. There have been Congressional hearings, stricter drug rules in several states and calls for an outright ban of drugs.

 

The breakdowns also offer the first test of a new New York Racing Association board that was handpicked by Cuomo. He appointed David Skorton, president of Cornell, as chairman, completing his takeover of racing in the hope of ending decades of scandal and mismanagement in an industry important to the state.

 

"NYRA is very concerned with any equine breakdown during a race or training, and we are constantly examining our procedures," the association said in a statement. "We have been aided in this by the recent New York Task Force Report on Racehorse Health and Safety, which was very clear on the safety of NYRA's inner track racing surface."

 

It says it is continuing to put into effect new safety policies recommended by the task force.

"NYRA is working to enhance preventative measures, monitoring and reporting with respect to breakdowns; and we are working with Chairman Skorton and our regulators to prevent future fatalities as much as we possibly can," it said.

 

http://mobile.nytimes.com/2013/01/12/sports/aqueduct-breakdowns-lead-to-order-for-necropsies.xml

an inhumane atrocity

Killing N.Y.’s horses for an extra buck

The shame of Aqueduct

By Lawrence Cunningham / NEW YORK DAILY NEWS

Thursday, October 25, 2012

A horse dies after finishing a race at Aqueduct.

With the appointment of Cornell President David Skorton to head a new board that is intended to steer the troubled New York Racing Association into calmer waters, Gov. Cuomo has a chance to reform the shameful manner in which racehorses are treated right here in New York City.

The deaths of 21 racehorses at the Aqueduct Racetrack in South Ozone Park, Queens, last season is an inhumane atrocity. Bad management and disempowered veterinarians are to blame, according to a new report issued by a task force formed at Cuomo’s behest.

In May, the state seized control of the track from NYRA — and the governor is rightly promising radical changes. But Skorton has his work cut out for him.

He should not ignore an important culprit: The track’s new gambling profits fueled these senseless deaths. Last year, the race track became a “racino” — a race track with a casino inside. At the Resorts World Casino, operated by Malaysian gambling giant Genting, bettors play the slots on video and wager in video games such as poker and roulette. Stakes are high, with casino profits reaching into the hundreds of millions.

The racino channels 6.5% of those profits to purses — winnings awarded to horse owners and trainers — which added up to $14.8 million during the 2011-12 racing season. Purses for certain types of races rose to multiples of what the horses were worth on the market. These included “claiming races” for less competitive horses, where all entered horses can be bought (i.e., “claimed”) for a given price.

For example, horses that could be claimed for as little as $7,500 were run in races where the purse had been inflated, thanks to incoming gambling funds, to be as high as $30,000 and $40,000. That radically devalued the horses: Those that win but die from running too hard are worth vastly more than those that live but lose. Consequently, horses are run harder than they should be, causing broken legs that lead to death.

Of the 21 horses killed last season, 17 were running in claiming races. The recent task force report concluded that “inadequate protection was afforded to this class of horse.”

The purse-to-claim multiple should never approach 2 to 1, the report said. The actual multiples — more than 5 to 1 — contributed to an attitude of anything-for-victory that now requires reform.

Debate over this subject stretches back a decade, when New York politicians began a push to expand the kinds of gambling that are legal in the state, starting with gaming machines at horse race tracks.
Some of the pressure that led to the installation of the racino at Aqueduct came from a surprising source that should have no place in the debate: federal prosecutors.

NYRA had been accused of tax fraud in 2003; a settlement required that NYRA continue its efforts to open a racino at the track.

Prosecutors never explained their reasoning when inking the settlement, but clearly, politics were in play. NYRA worked earnestly to move its gambling program along amid growing agitation and pressure.

It finally prevailed — Genting opened its doors at Aqueduct in 2011 — and the tragic results are in, with gambling money going to inflate race purses, which has in turn led to the irresponsible treatment of horses.

We can’t necessarily blame federal prosecutors or say what effect their deal had on NYRA’s quest to deliver a racino and related revenues to the track. The deadly results arose from naked greed.

The lesson, though, is important: Politicians and prosecutors should not direct business changes without understanding their significance. What’s happening to the horses at Aqueduct could have been prevented.

The lesson for Skorton is clear as well. He should exercise independent business judgment about the proper operation of horse tracks, putting the humane treatment of the horses over money.

Cunningham is a professor at George Washington University Law School and visiting professor at Fordham University School of Law. His latest book, written with Maurice (Hank) Greenberg, is “The AIG Story,” to be published this winter.

Read more: http://www.nydailynews.com/opinion/killing-n-y-s-horses-extra-buck-article-1.1191320#ixzz2AYWInMmF

 

NY Racing Corruption expands, ignoring cruelty

Ignoring the drugging, cruelty and abuse to horses since Slot Machine cash was lavished on the dead horse racing industry, NYRA CEO suspended for knowingly cheating bettors.

This certainly seems to be consistent amoral conduct in a sleazy business.

NYRA puts CEO, counsel on unpaid leave amid probe

By Michael Gormley

Associated Press

ALBANY, N.Y.—The private group that runs New York thoroughbred racing put its $475,000-a-year top executive on leave Monday along with the senior vice president after a state report said $8.5 million in winnings wasn't paid to bettors.

The New York Racing Association Executive Committee said CEO Charlie Hayward and Senior Vice President Patrick Kehoe are indefinitely on unpaid administrative leave. Kehoe was paid $423,000 a year after he and other top officers, including Hayward, got raises last summer. Kehoe was also general counsel to the entity that holds the state franchise to run racing at Belmont, Aqueduct and Saratoga race tracks.

NYRA board Chairman C. Steven Duncker said the group takes the state report "extremely seriously."

"NYRA will take all appropriate steps and actions to cooperate with the state's inquiries and insure the integrity of our operations," Duncker said in a press release.

A state Racing and Wagering Board interim report released Monday said NYRA's management intentionally miscalculated winnings paid over 15 months. The report said NYRA knew it was shortchanging bettors by extracting inaccurate "take out rates" from winnings and still did nothing about it, a claim NYRA disputes.

NYRA officials told the Racing and Wagering Board that the issue was the result of an inadvertent error.

The report also said NYRA tried to keep the information from the public, including asking a racing columnist to keep the information out of the Daily Racing Form. The report said the columnist agreed. It identifies the columnist as Steve Crist, who is also the Racing Form's publisher. The report said a reader told him NYRA was taking too much out of winnings, and Crist contacted Hayward. The report says Hayward kept overcharging to accumulate cash for NYRA and to avoid adverse publicity that could have turned politicians in Albany, specifically Senate Majority Leader Dean Skelos, against NYRA.

Crist told New York's Daily News on Monday that he didn't know NYRA was overcharging and if he did, "we would have put it on the front page."

Hayward didn't respond to a request for comment.

"The report is deeply troubling," said Robert Megna, Gov. Andrew Cuomo's budget director and chairman of the state's Franchise Oversight Board, which oversees NYRA. The franchise holder must maintain "character and general fitness" to keep the racing license.

The probe comes as Cuomo seeks to expand gambling and allow a casino developer to build the nation's largest convention center at Aqueduct. He has also proposed a state commission to oversee all gambling statewide.

"The report raises serious questions about the actions of senior management of NYRA," Megna wrote in a letter dated Sunday. "This is not an isolated instance." Megna continued: "A failure to meet this most fundamental obligation puts into doubt the continued efficacy of the state's franchise agreement with NYRA."

The Cuomo-appointed racing committee would oversee the sport if NYRA's franchise is dissolved.

"It was shocking to me," Cuomo said of the report. "If the facts are correct, it's very troubling to say the least and it has been referred to the inspector general."

NYRA is one of New York's most enduring political powers, holding the racing franchise since 1955. In 2008, the state awarded another 25-year franchise to NYRA, even though it was in bankruptcy proceedings at the time. In exchange, NYRA dropped its claim to the land on which the tracks are located and collected $105 million from the state to avoid bankruptcy.

Cuomo made a proposed $4 billion convention center near Aqueduct a major element of his State of the State speech in January. It would be a key to major development of the area in Queens. Real estate and construction interests were Cuomo's biggest campaign contributors in the 2010 campaign for governor, providing $2.6 million.

Elmont, a Long Island community a short drive from the Queens track, is also expected to see development.

Killing Horses

Increased purses from Aqueduct casino seemed like winning bet until horses started breaking down
Some experts saw the tragedy coming
By Jerry Bossert / NEW YORK DAILY NEWS


Aqueduct Casino is making money for race track, but added purses have come with tragic price.


Long after the last race is run at Aqueduct, plenty of cars are still lining up to get into what was once considered one of the premier horse racing tracks in the country. They aren’t lining up to bet on the thoroughbreds, however, but to try their luck at the casino, playing slot machines or virtual roulette in what used to be the track’s grandstand, all hoping to score it big.

The Resorts World Casino has been a hit as a “net win” or profit-making entity since it opened on Oct. 28, making more than $228 million. Of that money, the New York Racing Association gets 7%, with another 6.5% going to race purses, which through March 17 translated into $14.8 million. NYRA, rich with found money, spread the wealth around, raising the purses at every level of racing to help all the horsemen in a sport struggling at every level.

In early December, NYRA issued a press release saying purses for the upcoming winter/spring meet, which began on Jan. 1, would total $3.75 million, a 44% increase over the $2.6 million offered in 2011. “We are very excited to announce this enhanced Aqueduct winter stakes schedule,” said NYRA vice president and director of racing P.J. Campo.
NYRA then announced that purses in stakes races at the upcoming Belmont meeting would rise 26.6% to $9.05 million and purses would rise 27% to $13.35 million at Saratoga, which opens in July.

“The enhanced purses should result in larger field sizes, stimulate additional wagering activity, and increase profitability for NYRA,” Campo said.

The purses were also increased for the cheaper horses that fill in the everyday claiming races. As a result, horses running for a claiming price of $7,500 were running for a purse worth $30,000, which increased the number of starters and seemed like a home run for all involved.

Instead, it turned out to be a nightmare for the NYRA when an astounding 18 horses suffered fatal breakdowns over the inner-dirt track during the winter meet. The majority of the breakdowns came in the cheaper claiming races, which tend to have the biggest field sizes and the horses with the most physical problems. The American Association of Equine Practitioners predicted this kind of calamity in a 2009 paper called, “Putting the Horse First: Veterinary Recommendations for the Safety and Welfare of the Thoroughbred Racehorse.”

The paper noted there are two groups of horses that compete at the race track the sport’s top level competitors, representing 30% of the horse population that competes in stakes and allowance races while the rest compete in claiming races. The AAEP paper offered five recommendations for claiming races, three of which NYRA follows, but the two that it doesn’t subscribe to could be the reason for the increased fatalities.

One of those recommended rules says that no claiming race should have a purse that exceeds the claiming price by more than 50%. For example, a horse with a $7,500 claiming tag should run for a purse of about $11,000, which leaves the horse still more valuable than the purse since the owner only gets 60% or $6,600 of the purse.

As the Daily News has reported, NYRA officials have acknowledged this imbalance in the wake of the extraordinary number of deaths on the track and have lowered purses beginning with the next condition book on April 4.

The other AAEP recommendation not followed in New York is that horses who do not finish the race or sustain a catastrophic injury during it remain the property of the original owner, voiding any claim —which would help ensure that a horse is in his or her best possible condition before the race. The rule is currently in effect in California.

One jockey, who requested anonymity, told The News that as he sat on the track after a spill after which his mount was euthanized, he saw two members of the barn high-five each other after finding out the horse had been claimed.

Following reports of the deaths in The News, Gov. Cuomo called for NYRA to set up a task force to investigate the 20 fatalities, which also included a horse who died of a heart attack and another who died of an infection, with the goal of finding the right answers in a sport that will always remain a business, and sometimes a dirty one.



Read more: http://www.nydailynews.com/sports/more-sports/increased-purses-aqueduct-casino-winning-bet-horses-started-breaking-article-1.1050527#ixzz1r4fGK4Bg

New York's Aqueduct's Horse Fatalities Investigated

NYRA president takes steps to solve horse breakdowns
By ED FOUNTAINE

Two days after receiving a letter from Gov. Cuomo’s office expressing concern over the number of horse fatalities this year at Aqueduct, New York Racing Association president Charles Hayward said NYRA is taking steps to address the potential cause of what he acknowledged is “a big issue,” while also moving ahead on the governor’s request that NYRA form and fund an independent investigation into the breakdowns.

Noting that most of the injuries have occurred in the cheapest claiming and maiden-claiming races, which have seen their purses skyrocket since the opening of Genting’s Resorts World New York Casino, Hayward said NYRA will lower the purses for the lowest claiming ranks — presumably giving trainers less enticement to race unsound horses. Plans already were in the works to raise the prices of the bottom claiming levels.


“I can’t speak to motives [of the horsemen],” Hayward said. “But when you have a claiming race with 18 guys shaking for [trying to claim] the horse, it shows a lot of enthusiasm for participation.”

The lowest claiming price will go from $7,500 to $10,000 on April 4, then to $12,500 when Belmont Park opens on April 27.

Hayward said he hopes the lowest price at Saratoga will be $20,000.

“Raising the bottom has to be done over time,” he said. “You’re not going to turn a switch with the increased purses [from the casino money] and get an overnight change in the horse population. Our goal should be to have sustainable mid- and upper-level claimers.”

As for the investigation, which likely will include representatives from the New York Thoroughbred Horsemen’s Association, the New York State Racing and Wagering Board and veterinary experts, Hayward said, “I’m hoping we can get a lot done. If it’s going to be meaningful, they should look at everything, and they should start next week.”



Read more: http://www.nypost.com/p/sports/horse_racing/nyra_president_takes_steps_to_solve_WDdIQ9NuXrhuVsPvg9TdBJ#ixzz1pVB5m1vm

New York has a rocky path to more gambling

Editorial
New York has a rocky path to more gambling

An audit released by State Comptroller Thomas DiNapoli yesterday said the New York Racing Association, operator of Aqueduct, Belmont and Saratoga racetracks, continues to bleed money and hasn't implemented recommendations from previous audits. Among other problems, NYRA hasn't done surprise cash counts at the windows, looked for money-saving reforms or, in the case of some exotic wagers, paid winners all they're owed.

NYRA expects to lose $20 million this year on racing. It declared bankruptcy in 2006, emerging only after a $100-million bailout from Albany. The tracks are suffering because, beyond the management issues, racing has a limited fan base. Yet thanks to the state's video lottery terminals at racetracks, which are set to provide NYRA $47 million this year, the horse folks won't feel much need to change.

The state's gambling operations have become increasingly convoluted, from the off-track betting payments to NYRA to the New York City OTB closure to the Suffolk OTB bankruptcy filing to Indian casinos not paying taxes, and back to the slots players subsidizing horse bettors, and owners.

Now Gov. Andrew M. Cuomo wants a constitutional amendment to legalize non-Indian-operated casinos in the state. To do it right, he also needs to unwind all of Albany's little deals that have grown up around gambling in this state, a long-shot legislative ticket New Yorkers need to see cashed.

Is legalizing casino gambling good for New York?

Is legalizing casino gambling good for New York?
February 2nd, 2012

Before getting into the statistics and opinions of economists regarding this idea, I offer the following thoughts. There’s a proverb that says, “Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.” Solomon. It’s depressing to me when government promotes the giving of wealth without earning it. It cuts against the grain of what made this country great where by the sweat of your brow and brains, you had the freedom to pursue happiness with the expectation of being able to keep a good portion of the profits gained having risked your time and assets. You are usually more appreciative of those profits knowing what it took to obtain them and then better stewards in spending them. There are some in the halls of government who think they know better how to spend those profits than you, the individual. Appealing to the vices of people’s desire of earning a quick buck, (i.e. gambling), the only one earning that quick buck directly is government who than squanders those proceeds for social justice causes. Lets look at some facts regarding the matter.

Last week a survey of economists found that most believe legalized casino gambling would have a negative impact on the economy.The survey was conducted by Center for Thrift and Generosity at the Institute for American Values in New York. Although the full survey has not been released as of yet, the press release says that 68 percent of the economic responders said that gambling is “economically regressive.”

One of these responders was Union College economist Prof. Mary O’Keefe who said casino gambling “is not just economically regressive, it is sociologically destructive to the community.” NYCF

State Comptroller, Thomas DiNapoli, released his audit of the New York Racing Association (NYRA). They have not only failed to implement recommendations from many previous audits but have not paid all the money owed to winners.

NYRA is expected to lose $20 million this year. It declared bankruptcy in 2006, but received a $100 million bailout from the State Legislature.

NYRA received tens of millions from a taxpayer-funded government bailout, but still CEO and President Charles Hayward hiked his own salary to a staggering $473,800 in 2010.

Newsday notes, “The state’s gambling operations have become increasing convoluted, from off-track betting payments to NYRA to the New York City OTB closure to the Suffolk OTB bankruptcy filing to Indian casinos, and back to the slots players subsidizing horse bettors, and owners.”

Governor Cuomo now wants to expand NYS government’s role in various gambling interests by changing the state constitution that prohibits this activity. Currently abusing the constitution with Indian owned casinos, at least they want to go through protocol to change the constitution to be legal. Does this make you feel any better?

There is plenty of money the State receives to fund essential services and then some, but current occupants don’t have the moxy and courage to prioritize our needs that would better serve the public at large. That’s why career politicians are not condusive [sic] to a sustainable political model.

NYRA's Choice

Without taxpayer subsidies, RACING can't survive and isn't surviving.

Shouldn't that be the question we're asking?

When the grossly flawed legislation was passed in Massachusetts, it contained generous subsidies for the RACING INDUSTRY - an industry that has lost attendance, lost public interest.

What other industry are taxpayers subsidizing to this extent?

Editorial: NYRA's choice

THE ISSUE:

The state comptroller fears that the people who run New York's racetracks will squander the take from video slot machines.

THE STAKES:

That money might be racing's last, best hope.

Why, it's the New York Racing Association, back in the news and on the receiving end of a stern warning from the state comptroller's office. The best way for all those who care about horse racing to sort out this latest critical report is to think of NYRA as one more bettor at the racetrack.

Make that one more somewhat overextended horse player, albeit one who has just come into some money. If nothing changes, that windfall could be little more than additional money to lose.

NYRA has more money than it's had in a long time, thanks to its share — some $48 million a year — of the take from the video slot machines at Aqueduct Race Track.

That's good, of course, for an outfit that was in bankruptcy just four years ago and still is losing money even as it has cut its costs.

That's good, we mean, as long as NYRA understands what's behind the admonishing words of Comptroller Thomas DiNapoli. He warns not to squander this money.

That might sound painfully obvious, especially in an economy like this one. Who can be against thrift?

NYRA can. It sure showed that in the bad old days, when its prior management escaped prosecution for tax fraud only after promising to clean up NYRA's act.

Even now, a very new and different NYRA has been able to make its case for state subsidies in a more promising context — that its share of the windfall from the Aqueduct racino offers a way out of hard fiscal times for New York horse racing.

The NYRA management might bristle at Mr. DiNapoli's warning, yet he has no choice but to make it.

"NYRA stands to squander significant revenue from the recently opened VLT franchise at Aqueduct," he says.

"NYRA still has not conducted a top-to-bottom review of its financial operations and taken necessary steps to curb costs, particularly for staffing and consulting contracts," he continues.

To that, NYRA says its house is in considerably better order than it gets credit for. Its president, Charles Hayward, predicts a profit of about $19 million this year, a far cry from the $19 million Mr. DiNapoli forecasts it will lose on racing operations.

How nice it would be to see NYRA turn out to be right — proving all the while that it took the comptroller's admonition to heart.

Read more: http://www.timesunion.com/opinion/article/Editorial-NYRA-s-choice-2789375.php#ixzz1krAgJJe6

Taxpayers' subsidizing horse racing

New York State Comptroller, NYRA at odds over financial projections
By Matt Hegarty

The New York State Comptroller Thomas DiNapoli said Tuesday that the New York Racing Association was projected to lose $19.7 million on its racing operations in 2012, a contention disputed by the racing association, which said it projected a net income of $1.4 million from racing operations in 2012.

The dispute revolved around a statement by DiNapoli's office that accompanied a follow-up audit conducted by the comptroller. The audit itself, which assessed NYRA's efforts to comply with recommendations made by DiNapoli's office in mid-2010, did not reference NYRA's projected net income for 2012. NYRA officials said that the association's 2012 projections were never discussed with state auditors during the preparation of the audit.

Mark Johnson, a spokesperson for DiNapoli, said the $19.7 million figure was "provided by NYRA during a closing conference" with the office's auditors. He said DiNapoli stood behind the accuracy of the figure.

The disagreement - which may reflect a difference of opinion on what costs should be included in the association's racing operations - reflects a rapidly deteriorating relationship between NYRA and state officials over the past several months, ever since the association began to receive subsidies from a casino at its Aqueduct racetrack.

Since the casino opened late October, NYRA has acknowledged that it had been improperly calculating the takeout on super-exotic bets for the past 18 months, a mistake that was caught by the auditor's office in an examination of the state's breeding fund. Then, just two weeks ago, the association categorically denied an allegation made by a state oversight board that NYRA allowed its account-wagering customers to bet on credit.

While DiNapoli's statement is harshly critical of NYRA, the audit itself credits NYRA for "partially" implementing five of the nine recommendations contained in the 2010 audit, but it also said that NYRA had not made any progress in implementing another four of the recommendations. Among the recommendations were that NYRA examine its agreements with contractors and conduct "surprise" cash counts in its departments.

NYRA said in its statement that it "took very seriously the recommendations" made in the 2010 audit, but that it did not have the time or the resources to implement all of the policies yet.

"We fully understand the importance of this process and remain committed to completing it," the statement said.

As for the dispute over the characterization of the association's 2012 operating results, NYRA took exception to explicit references in DiNapoli's statement that NYRA would use subsidies from a recently opened casino at Aqueduct to "mask ongoing financial problems and inefficiencies." DiNapoli's statement also said that that NYRA "stands to squander significant revenue" from the casino and that "only by gaining new [slot-machine] revenues will NYRA be able to show an overall profit this year."

NYRA, a non-profit that has lost tens of millions of dollars over the past several years, said in its statement that its projection for net income from racing operations did not include any of the subsidies it expected to receive from the casino. It also said that use of the subsidies is restricted by state law.

NYRA could 'squander' casino revenues without financial strengthening

Auditor: NYRA could 'squander' casino revenues without financial strengthening
by Paulick Report Staff

The state's top auditor warned the New York Racing Association to get its financial affairs in order or risk losing expected revenues from the new casino at Aqueduct Racetrack.

The Albany Times-Union says comptroller Thomas DiNapoli released a report Tuesday declaring that NYRA had failed to shore up its financial operations following two previous audits since NYRA emerged from bankruptcy in 2008:

"NYRA still has not conducted a top-to-bottom review of its financial operations and taken necessary steps to curb costs, particularly for staffing and consulting contracts," DiNapoli said. "NYRA stands to squander significant revenue from the recently opened VLT franchise at Aqueduct."

Below is a press release from NYRA responding to DiNapoli's report.

The New York Racing Association, Inc. (NYRA) took very seriously the recommendations that were made in the two 2010 audit reports from the Office of the New York State Comptroller.

NYRA has and will continue to maintain financial discipline. To implement all of the recommendations made in the 2010 audit reports inside of a year would have required more money and resources than NYRA could prudently spend at that time, but we fully understand the importance of this process and remain committed to completing it.

However, as the actual audit report notes, NYRA has made strides in implementing the 2010 recommendations, including plans to enhance revenues, staffing analysis and cuts in overall staffing, the termination of our former integrity counsel and the awarding of a more cost-effective integrity counsel, cost savings on the transportation of horses between NYRA tracks, and several other cost-cutting initiatives.

In the statement, the comptroller’s office references that the audit found that NYRA expects a $19.7 million loss from racing operations in 2012. This figure is misleading. It should be noted that the 2012 budget was not within the scope of nor was it referenced in the audit, and was never discussed with NYRA management. Furthermore, NYRA’s 2012 budget contemplates approximately $19 million of net income, not a net loss. Additionally, operating income solely from current racing operations, and without giving effect to Video Lottery Terminal (VLT) proceeds for operations and capital expenditures, is projected to be $1.4 million.

The comptroller’s statement expresses concern regarding how NYRA will use the money from VLTs. As a reminder, the use of VLT proceeds is regulated by statute and primarily allocated to purse money and capital expenditures. NYRA conducts a rigorous annual budget review and approval process and NYRA’s budget is reviewed by the Franchise Oversight Board. Furthermore, NYRA’s financial results and internal controls are routinely audited. NYRA is committed to the highest standards of corporate governance, integrity and management.