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Tuesday, May 18, 2010

Shutdown Close to Reality

"NYRA's current cash position will not allow us to make it through the entire Belmont Park race meet." And so, in a press release issued late on Monday afternoon, Charles Hayward and NYRA made official what's been widely presumed ever since Tom Precious reported on the worst case scenario presented to the NYRA board on April 30. That scenario became reality when the proposed $17 million loan to NYRA went by the boards. Basically, NYRA wanted to use money raised by via bonds (from the $250 million issue for the construction of the Aqueduct racino), ostensibly to pay for past and present capital expenditures, for its operating expenses, and the plan therefore did not pass muster with tax and bond counsels.

I'm told of active efforts in the governor's office to come up with an alternate plan; but time is obviously of the essence. Hayward told Jerry Bossert: "This week will be critical.....We will have to put out formal notices and make plans." [NY Daily News]

Well? Here we are, around two and a half weeks before the Belmont Stakes, and now that day is being mentioned as being possibly the last day of racing. Oh, man. How exactly did we get here? A long, twisted story of course, but you could say it started the day in 1971 that the first OTB parlors opened in New York City. I had to laugh when I read NYC OTB Chairman Sandy Frucher saying: "NYRA's fate and our fate seem to be appropriately entwined. " I'm sure that he did not intend the irony and profundity that is obvious to those of us who have followed or in some fashion participated in the sport here over the last four decades.

I continue to maintain that Saratoga will open as scheduled on July 23. There's a lot of money at stake, and there are people involved in the process in Albany who have various political and personal motives to get this, as well as VLT's and OTB, done; maybe a couple of them actually care about racing. But I don't think that anyone can be confident at this very point in time that there will not be an interruption before then. NYRA continues to be a hot political potato, and, in this election year, no legislator wants to be on the wrong side of a negative ad concerning a bailout to a so-called "corrupt" entity, which, some would have us believe, ineptly squandered away the $105 million it received with its 2008 franchise award. I would imagine that by now, Comptroller Tom DiNapoli is sitting on some information that he's learned from his investigation of that matter which could enlighten some of his former colleagues in the legislature as to how financially fruitless NYRA's situation is. However, facing a tough election challenge in November, I'm sure he'll release his findings at a time and in a context which serves him best.

And then there's stuff like this, from Jim Odato of the Times Union:

A senior aide to the governor said it would be unpalatable to bail out NYRA, and asked how the administration can send money to a thoroughbred industry that caters to wealthy horse owners while closing parks and reducing aid to schools and hospitals.
Of course, you and I know that those "wealthy horse owners" can pick up and send their horses elsewhere, and that it's the thousands of less privileged folks who get up before dawn and work for a living who would be joining others on the unemployment lines. And that those owners who have the means to ship out don't have to go very far this spring and summer to find purses which are far richer than what they've been running for here. They might even get comfortable and not come back if and when racing resumes.

We all know how dire the budget situation is with the $9.2 billion deficit that lawmakers don't seem even close to solving with the legally-required balanced budget now seven weeks overdue. But the state does have certain obligations; and just as the governor is somehow and reluctantly finding the money to include contractual raises for union workers in his latest emergency budget extender, the state must find a way to meet its written obligations to fund NYRA in the wake of its shocking incompetence in naming a racino operator for Aqueduct. Of course, the courts had to step in to compel Paterson to not only include the raises but to cancel his threatened furloughs, and perhaps the racing industry will be forced to go that route as well.


ballyfager said...

It's easy for me to say since I'm 90 miles from NYC and not dependent on NY racing, but let them close. The racing product they're offering is breathtakingly bad.

Racing there has been eroding not just for years, but for decades. And that includes the beloved Spa.

I hope Mth cleans their clock.

SaratogaSpa said...

I can't imagine Saratoga not opening, but than again I thought the State would find money to keep open the State Parks on the closure list, but sure enough this Sunday they closed, despite a big public outcry, especially in Upstate NY.

Even though the State contractually owes the money to NYRA, politically it might look like a "bailout" even though its not. Yeesh!

El Angelo said...

Does NYRA have to run 5 days a week? Could they reduce the number of days at Belmont after the stakes (a la what Monmouth's doing) to bridge the gap to Saratoga? Though I'm not sure that would help either.

jk said...

The first order of business in Albany is to cater to the State employees. Make sure they get their 4% raises in perpetuity as well as their guaranteed pensions while the taxpayer's 401k's crash into the ground. If there is any time or money left after this exercise, the NYRA situation will be addressed.

Anonymous said...

well said, Jk. Enough with the pay raises! This is utter insanity given the current climate. I'm in the private sector and we had to take a lump 10% pay decrease in 2009, 5% of which we have only just gotten back. And I consider myself fortunate. Time for these state workers to take their lumps, or they'll have no choice but to take a walk en masse. F corruption. -jp

Anonymous said...

I suspect NYRA will have to declare bankruptcy again and sue the State for the money it owes it under its new franchise agreement from April 2009.

Anonymous said...

Don't forget after ten years a state employee has free heath care for life.

Anonymous said...

Question for ballyfager:

Have you looked at other racing around the country or is your ignorance confined to racing in NY?

ballyfager said...

@anon 11:34

In my ignorance I realize that NY racing has fallen further and faster than anywhere else.

Given the fact that VLTs were approved God knows how many years ago this is beyond incompetence, it's scandalous.

Anonymous said...


Apparently you haven't been paying attention to KY or CA or really anywhere else for that matter.

But, hey, keep bashing NYRA. It's the in thing to do. I guess it's better than kicking your dog.

steve in nc said...

Alan has been an optimist about the continuation of NY racing throughout it all, so to see him now take this tone, well, I'm scared.

I've long felt that there is way too much racing in the US; that the product would be way better with fewer tracks operating at the same time.

Most of us play by simulcasting and better, fuller fields would be great. I confess I always assumed that NY would be the site of one of the operating tracks. My comeuppance.

If NY racing really does come to a stop, then I can imagine one optimistic scenario. The state, needing cash, sells the tracks to a private entity which can also put in a casino. If so, I hope the private operator wins the rights to OTBs, phone & internet accounts as part of the deal.

No illusions here that the private operator would care about racing. It is a far from perfect world. Maybe a racing-only entity could run Saratoga, which should be profitable without slots.

Current reality isn't so pretty so there isn't that much to lose. For the sake of us bettors, if funding is found for NYRA, the state should pare back the NY Bred program, and there should be a constitutional amendment banning NY Bred turf sprints. While I'm rewriting the constitution, NY Breds unable to break their maidens after 10 starts should be banned from racing and PETA should be forced to adopt and care for them without use of halters, ropes or fences.

I've been a fan of NY racing since the days of Forego, and I've never seen worse cards than in the past year or two. I'm not in position to say whether/how much blame NYRA deserves.

I'm not much for privatization, but racing certainly isn't essential and shouldn't need to be government owned/run the way water, utilities, health care and some other key industries are in most democratic mixed economies.

To the poster who's upset that NY state employees get free health care for life after ten years, you shouldn't forget that every citizen of almost every country in the industrialized world except the US gets free health care for life. Many of those evil places corrupted by socialized medicine even somehow have top-notch racing without lasix and bute.

Anonymous said...

Good to see the Horsemen finally stepping to the plate, they/we should file their lawsuit regardless of whethar NYRA stays open.

Incompetance or just plain criminality has cost them/us a ton of money over the last TEN freaking years.

Personally, this debacle has probably cost me between 20-30k in breeder awards, and I do not even own a farm, can only imagine what it has cost the major NY Breeders.

File the suit regardless, sue them all, every last one of them from Pataki to the current administration, Bruno to Silver, jointly and individually, subpoena the records and make them public. The shenanigans that went on behind closed doors need to be exposed. Does Albany have a Freedom of Information Act?

Time to treat these Albany jerks the way they deserve to be treated, as the crooks that they are.

ballyfager said...

@Anon 1:20

I'm not bashing NYRA. I don't give a damn about NYRA one way or the other.

I'm decrying the end result which is that NY racing stinks.

Anonymous said...

Free Health Care for Life;


PIIGS, all bankrupt, all needing bailouts, some now with rioting in the streets.

California is on the cusp of joining them.

It was great while it lasted, but all pyramid schemes eventually fail.

Anonymous said...

Although I do completely agree with privatization of the NY Racing Industry, perhaps its best if the whole thing collapses and we can start over.

After all, prohibition of gambling on horses is how the quasi-govermental NYRA came into existance in the first place. It might just take a little time without racing to reverse the original mistakes.

If the Big A must be sacrificed to somehow make that happen but we emerge with a privately run Belmont (w/ VLTS) and Spa who control the off track parlors sign me up.

Anonymous said...

Other countries with free health care: Sweden, Canada, England, France, Germany. Most people aren't as dumb as the GOP would like you to believe, unless they're actually in the GOP.

Anonymous said...


Stinks is relative. Please, Mr. Idontgiveadamn, tell us what racing organization in the US has good racing. Feel free to back this up as well.

I think you do give a damn. I just don't think you realize it.

Anonymous said...

These are the same people Alan and his ilk want to run the health care system. Brain dead politicos.

Anonymous said...

We free marketeers would love to see NY racing privatized. However, major de-regulation of racing, pari-mutuel wagering, OTB, and casino gaming law to accompany such a 180 degree turn. Fat chance of that ever happening in the Byzantine labyrinthe that is NY politics and patronage. That is, until now?

Could some good for NY racing come out of this latest crunch? At the very least it will force all parties to re-think the relationship of public sector control over NY racing, an issue that was raised during the NYRA franchise bid process in 2007 but quickly forgotten. Many will argue that racing cannot survive in this economy but how will we know unless we try?

One poster commented the other day that if they passed the hat in the Trustees Room they would have the $17 mill by lunchtime. Still think there will be a white knight riding to the rescue but it brings up the annoying question of whether or not such a loan would be allowed under the terms of the NYRA franchise agreement? /S/greenmtnpunter

Anonymous said...

Yes, privatization solves everything. Look how well Magna's doing. Even Churchill can't survive unless Kentucky gets slots.

ballyfager said...

@Anon 5:21

We're talking past one another but, just so you don't think I'm dodging the question, certainly CD, Kee & GP all have better racing than NY. Hopefully, Mth will have better racing starting Saturday.

But it isn't just that NY racing is bad, it's how far it's fallen,from a position that was way above everybody else. New Yorkers being so provincial it took them a long time to recognize and admit this. It's sad really.

Anonymous said...


CD has better racing than NY?

I laughed, as did anybody else paying attention. Hell, even Keeneland, with a limited meet, and shippers galore, ran three or four claiming races a day. Plus, did you notice how many short fields they had? I doubt this, as your answer suggests you don't pay significant attention to their racing, or anybody's. Gulfstream? At times it was pretty good, but overall it was at best comparable to Belmont, and that's being kind.

I get that you hate NYRA. That's your prerogative. But, you're only lying to yourself about this stuff.

Anonymous said...

New York bred races are as bad as, if not worse, than open claiming races. They're utter crap and they're killing interest in New York racing.

Figless Anon said...

NY Bred races are the only races that provide big fields, and any student of the business side of the sport will tell you big fields equal big handle.

To blame NY Breds for the decline in NY racing is ignorant. The decline in the quality of NY racing is obvious, competition from other east coast tracks with VLT inflated purses which have drawn all the hard knocking open company horses away from NYRA.

Yes, Churchill is suffering from the same competition, like in any business the subsidized have an advantage.

How can anyone compete with Delaware, Philly, Penn Nat, the West Va tracks, Woodbine and Presque Isle Downs?

Even little Indiana Downs is drawing horses away from CD and KEE at the lower levels.

The NM and AZ tracks are doing the same to the CAL tracks.

And newsflash, it is only going to get worse with foals crops down and foreign interests (Korea, in particular) purchasing approximatley 20% of the horses at recent auction.

A real horse shortage in a couple of year, folks will be talking about the glory days when Belmont had those competitive 8 horse fields of NY Breds.

El Angelo said...

No they won't. They'll have given up on racing.

steve in nc said...

Figless --

I wasn't trying to blame NYRA or the NY breds themselves. Large fields in general are good. Any number of NY breds sprinting on the grass with no grass breeding are, well, a good reason to download PPs for a different track.

With or without figs, do you really enjoy those races?

FA said...

Steve, no.