RSS Feed for this Blog

Wednesday, December 04, 2013

NYRA Seeks Financial Independence from VLT's

NYRA has a plan to get to profitability without VLT money which involves increases in track admission and parking, a hike in simulcast fees (we could perhaps see some simulcast interruptions in response to that), closing the Aqueduct training facilities during non-racing months, and reducing legal and other expenses.  I think this is a worthy goal; but surely not because the governor or Robert Megna or David Skorton want it.  Nor because I think there is any particular or compelling reason why NYRA should have to do so, as opposed to all the other New York racinos; and nor do I think that NYRA is any immediate danger of having the VLT money stripped away.

It's just good business practice, for one thing, especially considering the uncertain future with the pending arrival of full-scale casinos.  And it would put NYRA in a far better business and ethical standing down the road to argue for VLT money to continue, should it ever get to that point.  It could then assert that its business stands on its own, and that the VLT revenue, rather than being a subsidy to keep an unprofitable business afloat, is instead an investment to keep purses and breeding incentives high, which, in turn, generates revenue and jobs for the state.

Unfortunately, it has ramifications more profound that a few bucks extra in admission charges: The section on the new budget in the agenda for Wednesday's board meeting [large pdf file] refers ominously to unspecified "headcount adjustments."

The new admission fees - $5 for the grandstand and $8 for the clubhouse (a $3 increase, except for Saratoga grandstand, which goes up by $2) - still would leave NYRA below, for example, Del Mar ($6 / $10, though reduced for the regular Diamond Club me!)  Still, it immediately attracted some criticism in Twitter-land as short-sighted and in contrast to free admission at casinos.  Personally, I've always thought it a little odd that people who come to the track to bet copious amounts of money on dumb animals would quibble over a few dollars in admission or the price of a Form.  Just doesn't seem that consequential in the scheme of things.  (Though it will be more so at Belmont regarding parking since many Saratoga fans park off track.)  Except for the Saratoga grandstand, which went up a buck, I don't recall prices ever going up in all the years I've been going.  So I hardly think that it's unreasonable.

NYRA is not estimating how much revenue the admission increase will generate.

 “Additional revenue from an admission increase is uncertain at this time,” [Dir of Communications Eric] Wing said. “It would obviously be a function of attendance.” [Saratogian]
But I would think that anyone who would not go to the track specifically over a relatively small increase in  overhead would not be high handle types that would significantly hurt business.....and chances are they would maybe bet via NYRA Rewards at home.

Now, having said all that, I would prefer a different approach, and note, hardly with any surprise, that the concept of NYRA-opearted off-track teletheaters to fill the void left by NYC OTB is not mentioned in the board meeting document.  That was a main priority of the former CEO Charles Hayward; and it was his concern over navigating the necessary political processes that led to the takeout snafu that unfortunately cost him his job.  Hayward is a racing guy.  Chris Kay is not.  But Kay knows from his experience consulting for Universal Studios Parks, where the admission is $42, that entry fees to the tracks are relatively cheap.  And he knows his bottom lines.

According to the agenda, the Longshots simulcast bar on the second floor of the Big A is now slated to open in April, right around the time that racing shifts to Belmont on May 1, thank you very much. The facility does figure into NYRA's revenues projections; the forecast is that it will generate an additional $9 million in handle, broken down, quite specifically, as follows: $2.2 million during Belmont spring, $1.5 million during Saratoga, $1.3 million during Belmont fall, and $4 million during Aqueduct.  Not sure exactly what they are basing those rather precise estimates on!  I mean, people already go to Aqueduct for simulcasting and live racing.  Sure, there will be a (hopefully) really nice cool new place to hang out, drink, and bet.  Whether people will now make the trip to Aqueduct specifically to go there, or whether those who already go will bet more because of it, remains to be seen.  Maybe they're planning cheap drinks with generous pours and other incentives to get horseplayers to part with their money! (But remember, they'll be those young women that Mr. Kay mentioned to distract the horseplaying men!)

A change in the racing schedule for Aqueduct this winter - dark days will be Tuesdays and Wednesdays from Jan through March, and there will be racing only four days a week in February (Friday - Monday).  They can't be loving that at Parx, or the other tracks that race on Mondays.

On page 20 of the agenda, NYRA details coming patron area improvements at the three tracks.  It curiously claims that "a significant amount of improvements were made in 2013" at Aqueduct.  I'd like to know what those are other than the murals on the first floor, and the sealing off of the passageway to the racino on the second floor [Update: this was sealed off by Genting last year]. Nothing else is planned there other than renovations to the escalators and third floor bathrooms, along with additional security cameras for patron and employee safety.  And, of course, the long-awaited Longshots bar.  Improvements to the sound system is slated for Saratoga, where I often have to resort to the iPod to drown out the blare from the backyard TV's, but none at the other two, where you can't hear a thing in many areas.

 - Over at the TimeformUS blog, I posted about the Remsen, and the slow early pace that is considered to be "peculiar" in this country.  Mike Watchmaker wrote disapprovingly at the Form of such races that are run in the European style of [gasp - ed.] slow early, fast late.  As we know, most racing people here seem to love high early speed and the spectacle of exhausted opponents digging deep for a little extra to prevail in the late going, like heavyweights laboring in the 12th round. Perhaps it's the fact that I started out as a harness guy that it all seems counter-intuitive to me.  The Remsen was an extreme case to be sure, but I personally prefer the sight of fresher horses going faster in the stretch.

And it just might be easier on the horses and better for their well-being too.  Everybody is just so concerned about that nowadays, but not of course when they would have to sacrifice their own beloved and hallowed (and dumb?) traditions.  And surely not if they perceive that it would effect their ability to handicap effectively. 

On that topic, in this spot and at this time, I was planning to pivot to address my assertion in the prior post that the Times' reporting on 24 horse deaths a week was BS.  However, that will now have to wait.  I've always been open to disagreement and willing to correct any errors or misstatements.  But I don't answer to anyone or operate on anybody's timetable but my own -  even (especially) the New York Times - as to when I post on this blog.  I do so whenever I have a chance, which is unfortunately far less than in the past, and more unlikely when I have my kids and family in town for an extended holiday weekend.  Don't worry though, I'll surely get to it in a far shorter time frame than the 20 months it took the Times to address their misinformation on WMD's in Iraq.


Dan said...

A few years ago general parking at Belmont went from $2 to $0. NYRA then increased grandstand admission from $2 to $3. It will go to $5 next spring. I could live with this if they make improvements to the facility. Give me a reason to go to the track instead of playing at home. NYRA should focus on getting their own betting facilities in NYC. Make a deal with the new mayor to give a few bucks towards his universal Pre-K program.

jk said...

Free admission to modern casino facilities vs. increasing admission to aging unrenovated racetrack facilities. Add in a takeout increase for good measure. You do not have to be a rocket science MBA to know which business model wins out. At least the Big A remains free but the writing is on the wall there.

Anonymous said...

Wow Mr. Mann if posting to your blog is a chore feel free not to. Couple of thoughts, racing fans are made at the track, not online or at simulcast sites, anything that discourages going to the track will in the long run be detrimental to the "sport". Second thought, the 24 weekly fatalities figure of thoroughbreds while racing may be high but if you change that sentence to read "from racing' it is I suspect far too low. And if you add in the fate of the unfortunately too slow animals, only a very small percentage of which are rehomed, the numbers become painfull. Make no mistake I am and have been for a very long time a fan of the sport, but if there is an after life I expect to have to answer for that interest.

jk said...



Free General Admission (except Hambletonian and special event days)

Alan Mann said...

Anon 1249 - Not at all a chore, except when I have to correct myself. :-) Just struggle to find the time these days. I think we all have to hold our nose and look the other way to some extent to be a fan of this sport. Some of those people feel entitled to lecture the rest of us for not caring as much as they claim to while they continue to participate or make a living off of it.

jk - I respect that Gural is doing that, but he has nobody to answer for but himself. We'll see how long it lasts. Have you been there yet? I'd choose Aqueduct for simulcasting rather than being crammed on the first floor.

jk said...

As the New York Racing Association planned to raise admission prices for live thoroughbred horse races, it awarded raises to some of its top officers.

Wage data from NYRA shows its 11-member executive team averaged $245,000 a year in pay. And NYRA has begun recruiting for more top brass, paying a headhunter a minimum of $50,000 per hire.

According to documents NYRA provided to state regulators, two top officers of the not-for-profit racing association received pay raises in the third quarter. Chief Executive Christopher Kay wants to hire at least four more executives in addition to Senior Vice President for Racing Martin Panza, who was hired in October.

Anonymous said...

Let's face it, if you've been going to Saratoga the past decade or so (since 2000), attendance is down, the quality of racing has regressed and the rich have gotten richer(except for Richard Dutrow - at least from his on-site involvement).

Shouldn't the admission price be waived if you decide to ante up for a table to dine? The same goes for the clubhouse access.

The racing programs are of horrible ink quality. One can have hands coated in ink from it transferred through sweat.

DRF seems to have a reasonable offer of free PPs if you wager via the Xpressbet partnered site, but when will NYRA offer that for Rewards members. I'm talking PDF format PPs.

Are the people handing out paper towels in the bathroom licensed to work? Are they claiming those tips as income?

Yes, they allow you to bring in food and drink at the Spa, but if you decide Togo with the track vendors you get hosed. A burger, fries and a soda cost almost $20.00.

It's high time to eliminate the bloated attendance figures on giveaway days. Plus, those items should be given out late in the card.

Has it been announced how much season passes are?

You know the day is coming that a Bobby Flay owned restaurant will open at the Spa. It'll be high end and cater to the upper crust.

They are squeezing the bottom feeders and even people like -- people who wager an average of $1500 a month. See, I rarely get the small rebate for hitting $2000 a month, but I do play regularly. If I go to the casino and do that, I get a free parking spot, a free rodeo a comfortable shuttle bus and dropped off at the front door, free admission and eventually a free lunch or dinner for my action.

Let's not forget that Chris Kay commended Ramon Dominguez on his "matches" when appearing in the winner's circle. Kay was in there more than Pletcher last summer. His bonus income is derived from meeting targets in which fans will ultimately contribute to.

After the Charlie Hayward era debacle with the exotics, the last thing NYRA should have done is to stick it AGAIN to the fans.

If they want to maximize revenue, then fire the gate crew for the inordinate amount of late scratches at the Spa. Further, they should not allow them to mingle in between races with certain bettors as they do by the clubhouse entrance.

And how is it that employees such as Andy Serling are allowed to bet. Seriously. NYRA employees should not be allowed to bet on NYRA when being paid to work.

Figless said...

"If they want to maximize revenue, then fire the gate crew for the inordinate amount of late scratches at the Spa. Further, they should not allow them to mingle in between races with certain bettors as they do by the clubhouse entrance. "

I have long criticized the Spa gate crew (incidents seem more common at the Spa), at best they are below par and, while I do not buy into conspiracy theories, at worst they could possibly be corrupt (I have heard this suggestion from horseplayers but not horsemen).

They seem to be above criticism due to the dangerous work they perform for modest wages, but they do deserve scrutiny.

Any relatively low paid employee with potential impact on millions of dollars should be bonded and subject to full background checks. In this particular job they should be banned from gambling and segregated from the general public and horsemen during racing hours as anon suggests.

Standard internal controls to protect the both the horsemen and public.

Figless said...

Alan, missed your debate with Drape, good for you, looking forward to your response.

Health And Safety Consultant Norfolk said...

I don't believe in conspiracy either. But these politics always had me after sometime. I think, people are more into saving their business just by putting blames on others'. Thank you for the blog post by the way. I enjoyed reading it.

Arnold Brame