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Friday, April 16, 2010

Oh Too Big

I have some financial reports that I'd gotten from NYRA a couple of years ago; and it shows that, in 2007, NYC OTB handled just under $300 million on NYRA races, generating a 'Net to NYRA' of $7.9 million. That's a percentage of just 2.69%, as opposed to over 9% for on-track bets (which now include those placed via NYRA Rewards). However, there was an additional 'Net to NYRA' of some $14.75 million from non-NYRA races and contractual payments. The total of $22.7 million could keep NYRA going until the racino casino at Aqueduct Belmont is finally built, probably even if that's not until 2012. Easy to see why Charlie Hayward has said that all bets are off should OTB close.

And therein lies the dilemma here. I agree wholeheartedly [in principle] with those who say to slay the parasite; shutter the seedy parlors, and send Sandy Frucher back to Philadelphia. But another report I have shows that, in 2006, NYC OTB paid out over $100 million statewide to the "Racing Industry (Sum of payments to breeders' funds and racetracks). Even if those figures are down as much as, say, 15%, and as inefficient, corrupt, wasteful, and seedy as NYC OTB is, that's too big to fail kind of money.

So that's why I still expect, no matter what the OTB board announces this weekend regarding its closing, that something will get done in Albany. No doubt that this something, if it does indeed come to pass, will be a band-aid which will not address the fundamental issues that have led to the present dismal state of affairs. Seeing a reference in the memo of the failed bill to finally permitting OTB (and, consequently, NYRA) to stream the races online, and another to the concept of consolidations, mergers, acquisitions or consolidations does makes me think that maybe someone in the capitol is starting to get it. But if they all soon don't, we'll be in the same position this time next year.

- NYRA is looking past the current crisis with the apparent expectation that it shall survive. In a letter from Charlie Hayward and C. Steven Duncker to Breeders' Cup Chairman William Farish, NYRA seeks to "engage BCL in a discussion that will result in Belmont Park hosting the 2011 Breeders' Cup." The letter cites the four "memorable" events already run there, the sweeping turns and crisp fall weather, both of which appeal to the Europeans, the population of top stables based here, and New York as the media capital of the world.

In addition, Hayward and Duncker take aim at the idea to move the Breeders' Cup permanently to Santa Anita.

NYRA believes that moving the Breeders' Cup to a single location, particularly to Southern California and Santa Anita's artificial racing surface, imposes a severe hardship on horsemen and racing customers. Even before the introduction of artificial racing surfaces in California, thoroughbred horses shipping to California from the eastern part of the country were disadvantaged on the Santa Anita dirt surface.


Anonymous said...

At first glance it appears that NYRA would need to capture about one third of NYCOTB's handle on track to break even, disregarding extra income items like concessions.

This is not impossible.

The real loser in a complete shutdown is the State, so obviously "something" will get done, even though in truth $100M is a drop in a bucket that is the Albany deficit.

Alan, does your financial report indicates how much of NYCOTB's handle is derived from Interent and Telephone accounts as opposed to through the surcharged mutual windows?

IT would seem the Internet and Telephone account would be the easiest customers for NYRA to integrate, although the difficulty of deposit and withdrawal obstacle still needs to be overcome.

Many of the folks I know with OTB accounts operate in cash, both their gambling and their businesses, running their wagers through a checking account is not an option.

SaratogaSpa said...

As I have said before, of course it will get down, last minute deadline deal, as NY State loves to do. Everyone will get their piece of skin for a year until we re visit the "crisis" next year again.

Anonymous said...

NYCOTB too big to fail? Gimme a break. If they shut down, people will open NYRA Rewards accounts the next day and maybe some of them will actually go the to track (gasp!). This could be a good thing.

Let OTB close, give NYRA the money they were promised by the state to stay open, and then give NYRA the right to open parlors/kiosks in the city.

When you offer Albany the chance to put a band-aid on it and push the problems out to next year, they think that's a great idea. Let's force Albany to settle it now with the threat to Saratoga being the axe over their heads.

Anonymous said...

Matt Hegarty of Daily Racing Form has just reported that the board of New York City OTB has voted to suspend the shutdown 'indefinitely' so that a proposal can be made to the State Legislature for restructuring the company:

They already have a mess on their hands with the Aqueduct casino operation and this is setting up to be another farce that will drag on for years.

Anonymous said...

I have been trying to open a NYRA rewards account for three days to no avail, no response from NYRA customer service.

They had a window to poach some wagering accounts from NYC OTB due to uncertainty, that window has expired, I will reluctanty continue to wager with the parasite since the host appears uninterested in my business.

Charlie Hayward said...

We have opened many new NYRA Rewards over the last week. It is not clear to me why you are waiting to hear back from Customer Service as they are routinely opening accounts but if you would like some assistance you can call me directly at 718-659-2311 or e-mail me at
Regards, Charlie Hayward