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Wednesday, November 02, 2005

NYRA Preparing for Bankruptcy

- The Albany Times-Union today reports that NYRA has engaged noted bankruptcy firm Weil, Gotshal & Manges. One wonders how they have the money even for that. NYRA’s Peter Karches explained that NYRA has taken this step because "we need the state to help us."

The paper is also saying that state officials have “panned” NYRA’s planned land sale; I’m not sure if that means that the sales have been officially denied.

Karches reiterated NYRA’s opposition to an increase in the takeout, saying that an increase of 1% would result in only about $140,000 a month in extra revenues over the Aqueduct meet. But one OTB head sees things a different way.

Ray Casey, president of New York City OTB, said a 1 percentage point increase in takeout could result in $3.5 million for NYRA based on the on-track handle in a year of racing at the three tracks. A bigger tax increase could be meaningful, he said.
I wonder if Casey is taking into account any losses in handle due to bettors around the country no longer being attracted by the lowest rates in the country.

Matt Hegarty reports in the Form of a new study by Friends of NY Racing (FNYR) that points to declining revenue for the state’s OTB. Officials of the various regional OTB’s seized on the report to highlight their plight. The general counsel of NYC OTB said that "you can't keep being required to pay out everything you generate in revenues and miraculously be expected to have leftover money for the city.” And Larry Aaronson, the head of Nassau County OTB said:
Revenue has declined because of higher statutorily required fees to NYRA and the state, combined with the effects of lower takeout rates on NYRA's races as of 2001. OTBs keep the difference between the takeout and the fees, so any reduction in takeout puts a squeeze on the bottom line.

As an example, Aaronson said that Nassau OTB has increased betting at its parlors from $252 million in 2001 to $310 million in 2004. However, Nassau's revenues have fallen 25 percent in the same time period [blah blah]..... [DRF]
OK, that’s enough of that. Cry me a FUCKING river, guys. For one thing, those of you who have been in a NYC OTB parlor know that if Libby Lewis was told that he was facing some hard time in one of them, he’d be singing like a contestant on American Idol about how much of a lying prick Dick Cheney is. And furthermore, in an age in which the industry is moving towards giving money BACK to bettors in the form of rebates, NY State OTB’s continue to take a 5% surcharge on most winnings on bets made at the windows. So do you really think that ANY serious gambler is going to be frequenting OTB’s instead of betting through phone accounts with any number of providers, both legal or otherwise? Perhaps with some habitable parlors with facilities fit for human beings, legal computer wagering, and a progressive program of rewarding bettors instead of taking even more money from them, the handle would be up enough to compensate for increased expenses and lower takeout.

Yeah, I know, it’s the state that has to lead the way to implement these changes. But don’t give me this crap about increasing the takeout for a short-term fix. The entire system of these OTBs needs to be scrapped and redone from scratch. Nassau’s Aaronson said he favored a "regional" approach that would limit competition between NYRA's tracks and the OTB companies. Yeah, and that would protect his high-salaried job too.

2 Comments:

Green Mtn Punter said...

And still the media portray NYRA as the bad guy, "...it's getting what it deserves, a virtual den of thieves!" Enough already! I would like to see any other business survive, let alone make a profit, being "saddled" with the regulatory, tax, and other burdens that NYRA operates under. What they all forget- it's spelled out in the Friends of NY Racing economic impact study- is that thoroughbred racing has a very substantial, positive economic impact on the State of NY. But the pols know that NYRA- as do all other gambling enterprises in the state- operates at their mercy so they are able to milk "gambling" in a way that would not be tolerated by any other private enterprise.They set racing up to fail and then want to get more political mileage out of the failure by kicking the NYRA folks around as bad guys getting what they deserve. This attitude must change, and change quickly. I urge Friends to get out front now and explain why the NYRA ship is sinking and what must happen to fix it. We've had enough disinformation from the pols and their media allies, now let's hear from our side.

throwaway said...

hey, i have fond memories of hanging out at OTB as a kid with the damon runyonesque assortment of characters -- please don't ruin that by introducing Libby into the mix!

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