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Thursday, January 26, 2012

NYRA Beats Back Latest Attack

- NYRA quickly reacted to flick away the latest broadside from a state government official; this time, and once again, the Comptroller Tom DiNapoli, who issued a report, in the form of a letter to Charles Hayward, on the probe he promised over the summer, a followup to his critical audit report of June, 2010. At this point, NYRA's Director of Communications and Media Relations Dan Silver may very well have a response file ready to fend off the expected attacks. The file for DiNapoli Disses would be located somewhere amongst and between the ones marked for the occasions of Franchise Oversight Fantasies, Ignorant Newspaper Editorials, and Dumbass Politicians.

NYRA's response was curt and firm, in particular when pointing out that the Comptroller's summary statement issued to the press took a far dimmer view than what was actually expressed in the report. While DiNapoli, in his press release, would concede only that NYRA "has launched some cost containment initiatives," NYRA pointed out that the report (in PDF format here) was actually far more explicit in detailing what it has done to comply with his audit's recommendations.

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 fact, the recommendations in the report that are marked 'Partially Implemented' seem instead to actually be rather substantively implemented. And the ones marked 'Not Implemented' hardly seem that significant or material at all in the larger scheme of things. For example, there's this one:
Recommendation 5

Identify the extent to which other NYRA operations and services deviate from standard industry practices and evaluate whether such departures are necessary and cost-effective.

Status - Not Implemented

Agency Action - NYRA officials asserted that they do not pay for any practices that deviate from industry practice. However, they have not supported their assertion with any documented analysis.
Another is regarding surprise mutuel clerk cash counts not being a surprise; and the other two concern concessions, which is now out of NYRA's hands for half of the year, as Genting has taken over at the Big A.

Not only did the Comptroller paint a dark picture in his press release, he stated, in a fit of mere speculation, that “NYRA stands to squander significant revenue from the recently opened VLT franchise at Aqueduct." NYRA responded, helpfully: "As a reminder, the use of VLT proceeds is regulated by statute and primarily allocated to purse money and capital expenditures."

And in the most bizarre aspect of the exchange, the Comptroller contended that NYRA "expects a $19.7 million loss from racing operations in 2012." This assertion was mentioned only in the press release; it was not part of DiNapoli's report at all. When asked where DiNapoli got that number, a spokesperson for the Comptroller told Matt Hegarty that it was "provided by NYRA during a closing conference." [DRF] But that notion is flatly disputed by NYRA, which stands by its expectation to turn a slight profit, $1.4 million, from racing operations this year. I have no reason to doubt that; it jibes with financial projections I've been shown in the past.

So, where did DiNapoli really get that number? Perhaps, as Hegarty wrote, it "may reflect a difference of opinion on what costs should be included in the association's racing operations." Given his consistent record of exaggerated and/or misleadingly negative criticisms of NYRA, it's certainly fair to speculate that the Comptroller went out of his way to portray NYRA's outlook in the least favorable light possible.

And the release around the same time of the lobbying expenses and campaign contributions of other industry players (with, not surprisingly, the seemingly unlimited cash-resourced Genting leading the pack) raises another question: Is the continued hostility towards the association a result of the fact that NYRA seems to stand alone amongst those who do not "pay to play?" After all, if NYRA's name came up on the list of those who have generously contributed to politicians throughout the system, they'd certainly be hearing from DiNapoli or Robert Megna. And then Dan Silver would have to go back to his response file.


Dan said...

NYRA needs to seek shelter because the politicians are on the attack. I'm rooting for them because the alternative will not be any better. I'm curious to see what they will do with Belmont with the mandated construction funds. How about broadcasting the races in HDTV? This would be great.

Anonymous said...

Thomas DiNapoli is a Democrat and you voted for him Alan.

alan said...

>>Thomas DiNapoli is a Democrat and you voted for him Alan.

Actually, I voted for Harry Wilson. It was hard for me to vote for a Republican, wasn't sure where to find him.

Dan said...

You think Harry Wilson wouldn't be busting on NYRA now? I doubt it. The job of the controller is to bust chops. I don't recall George Pataki being such a friend of the NYRA.

Figless said...

The job of the controller is to audit goverment entities and expose errors and corruption if discovered, not to bust chops for political reasons.

This particular report is a waste of taxpayer dollars.

Dan said...


I agree with you. I meant to say the NY politicans from the last 20 years enjoy busting on NYRA. I don't think they have many friends in Albany.

Anonymous said...

If the NYRA expects to generate a profit of $1.4 million from its racing operations in 2012, without counting the nearly $20 million coming into its operating budget from VLT's, then why does it need the operating subsidy? I can see the capital expenditure monies, and the purse and breeder allocations, but a not for profit doesn't need the excess operating money, do they?

Anonymous said...

The operating money coming to the NYRA from vlts is not regulated like the capital expenses are, by comptroller, franchise oversight board, NYSRWB or legislature.

This may be what concerns DiNapoli and that crowd.

Anonymous said...

DiNapoli goes off a hissy fit at the expense of NYRA because his office wasn't the entity that discovered the takeout mishap.

NYRA's big concern should be the possible closing of Aqueduct as this would be step one in the eventual loss of the VLT subsity.

Also, it would be the near end of winter racing as Belmont is not condusive to such racing due to the lack of facility winterization and track placement which does not allow for the stretch to get winter sun.

Lastly,the closing of Aqueduct solidifies that Saratoga becomes a watered down 10-12 week summer long meet.

Anonymous said...

Anon 7:07...

Tough to get that much wrong in such a brief comment. Congratulations.

Anonymous said...

NYRA will certainly incur a huge financial loss, maybe exceeding $20million from RACING OPERATIONS; it's income from racing operations comes from takeout and signal fees, and a bit from selling manure.

The slot dole is not from racing operations, but a gift that NYRA management elects to classify erroneously as income.

Anonymous said...

That would explain the difference in DiNapoli's $19 million loss comment for NYRA in 2012 versus the NYRA's proposed $1.4 million profit if the NYRA is considering VLT money as "racing income."

Fraud Spotter said...

More anonymous internet experts.

Anonymous said...

Fraud Spotter: Are you not also anonymous? Or is your real name Fraud Spotter?

Anonymous said...

Who be who, Fraud Spotter or anonymous? Fact is, the NYRA's on the rocks.

Anonymous said...

Fraud Spotter would be a cool name. -jp

Anonymous said...

Governor Andrew Cuomo used to look for fraud everyday in his prior role, so if it does exist, it will certainly be on his radar screen. What he does if he or his people see it will be interesting. Then he can be the Fraud Spotter!