05/01/2012 2:18PM

My Statement On the NYRA Takeout Issue


Last August 1st, a reader sent me a note saying, as I understood it, that due to the expiration of legislation, NYRA could now ask the State Racing and Wagering Board for a takeout reduction if it wanted to. I forwarded the note to NYRA’s CEO, Charlie Hayward, asking him, “Is this true?” He responded by e-mail that the reader was correct and then went on to say – prefaced with the words “off the record” --- that NYRA had not asked for a reduction yet because he did not think it would be approved due to various other political battles going on. He then asked me to keep “these details” of those political reasons confidential and said he wanted to discuss the issue and the possible forms of takeout reduction with me further.

He never did, and the next thing I heard about the matter was several months later in December, when an auditor discovered that NYRA had in fact been overcharging by applying an incorrect takeout rate on some bets for more than a year. It turned out that the rate should have automatically been changed 14 months earlier, not just that NYRA had become eligible to request a change in the rates.

This was news to me, and I personally believe this was news to Hayward. I can think of no reason why he would have concealed that knowledge, and I believe that had he known the wrong rate was being applied, he would have gotten it changed immediately. He has consistently been a proponent of lower takeout throughout the decades I have known him, and had opposed the very increase that had expired. State investigators, and some readers, may believe otherwise, but I find it completely implausible that he would deliberately overcharge bettors for more than a year and think it would never be discovered.

Nor do I understand what possible motive I would have for tolerating or agreeing to overlook such overcharging – I would love to have been the guy who caught the error and reported it on the front page of Daily Racing Form and corrected the rates and gotten some people (including myself) their money back sooner. With hindsight, I regret that I didn’t follow up on the issue. But I personally do not believe Hayward knowingly overcharged his customers, and it never even occurred to me that might be happening. I assure you that I was completely unaware this was going on, and never would have tolerated it or agreed to be silent about it if I had.