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Crist: Inquiries but no change at NYRA
The New York Racing Reorganization Board last week held its first public discussion of the future structure of the sport in New York. While its ultimate recommendations remain a work in progress, the board’s discussion was notable and even encouraging for what it said it is not doing: There is no attempt to sell the enterprise to a private bidder, and there will be no decision by this group on the issue of closing Aqueduct Race Track.
Those two triumphs of common sense have been a while coming, and not what the future sounded like when the state seized control of the NYRA 17 months ago.
When the previous NYRA board was strong-armed into submitting to state control in June of 2013, officials in Gov. Andrew Cuomo’s administration were saying lots of silly things about selling NYRA to the highest bidder. Madison Square Garden, the Stronach Group, and Churchill Downs Inc. were identified as surefire bidders. The Cuomo plan was to create the illusion that some sort of a SWAT team was going to come in and make the company irresistibly buyable, and then the governor would sell it for a small fortune just as his 2016 presidential campaign was getting rolling.
This idea fell as dramatically as Cuomo’s Oval Office prospects when what always happens happened: The potential suitors, and the interim NYRA board, eventually figured out that nobody is going to bid real money to own what amounts to a phantom.
If you “bought” NYRA, what would you actually be buying? What is the value of a concern whose every parameter is subject to the annual whims of state legislators? You could in theory buy the right to conduct racing at tracks owned and leased by the state, but a month after the deal closed the legislature could cut racing dates from 250 to 100, institute a pari-mutuel tax or demand that you raise the takeout to even more unacceptable levels.
There’s also the thorny little matter of a long-term deal between the state and NYRA under which NYRA gave up ownership of the land in exchange for three decades of franchise renewal and VLT revenues. While deals with the government sometimes aren’t worth the paper they’re written on, what remains of NYRA is not going to give that one up without a fight.
So a sale is not happening because there is nothing to sell and no bidders. (This is exactly what happened almost a decade ago when the franchise was put out for bid and the only interested parties were ones who wanted to run a casino.) There would, however, be many bidders for the land on which Aqueduct sits, obviously including Genting, the casino empire that runs a massive slots parlor at Aqueduct. Sell Aqueduct and run its seven months of dates at a newly winterized Belmont – easy, right?
Not so fast. Twenty years ago NYRA looked into this (during my two years of working there) and the cost to demolish and then rebuild the northward-facing grandstand, and install a new track for winter racing, was somewhere north of $600 million. Presumably the cost has gone up significantly since then. Also it would take several years, during which you would have to race year-round at Aqueduct. No wonder the board said last week it would like to make all of this the next board’s problem.
This board is currently leaning toward a future structure not entirely unlike NYRA’s original charter back in 1955: A not-for-profit entity, overseen by unpaid trustees who care deeply about New York racing, with a minimal layer of government regulatory involvement. If that is indeed the plan, the current NYRA board and management needs to start gravitating toward the benefits of such a structure instead of continuing to compete with previous years’ financial results in order to get a pat on the head from the executive branch in Albany.
What’s best for the bottom line is not always what’s best for racing. At the end of the Saratoga meet, after six weeks of preaching quality over quantity and an end to marathon cards, management tried to close some year-over-year financial gaps by adding yet more races. NYRA needs to be able to make decisions to conduct its business in the best interests of the sport – which, in the world of declining foal crops and saturated gambling markets, means less racing.
The greatest contribution that this interim board could make would be to tell management to stop chasing nickels and behave like a true not-for-profit on a mission: To present the best possible racing even if that means there’s going to be less of it.
How are they losing money when they get 7% of the take from the casino? They are getting over 2 million a month just from there. And that does not inlcude the 7.5% that goes to the purses. There should be plenty of money to renovate Aqueduct (and with the city offering tax abatements for new business), they should give one to an important NY landmark and get people to come back to Aqueduct. Where is ALL OF THE MONEY GOING???
The Aqueduct meet lost $11 million this year. Some have said that Kay cooked the books to make Aqueduct look bad. In Q1 of 2012 and 2013, the NYRA had operation looses in the $20 million vicinity. It really doubt the winter meet is profitable.
The not-for-profit status does not take away the need for the NYRA to be profitable. If for some reason the slots subsidies go away, the NYRA could be in serious trouble.
Get some of the high priced so called talent out.They get big bucks plus extras and the place is a dump.The big A is locked in the 60s.Happy i got to see the glory days when 50.000 was common on the weekend.Put these guys on commission no profit no pay.
at some point someone somewhere has to realize the sport is on a death spiral and can only be saved by limiting dates and increasing the quality. slots are the only reason several tracks are still open most would have closed by now. look at how poor the product at churchill has become since they dont have slots. i am sure if NYRA tried they could find jobs for the affected employees but at this point to race and lost money doesnt do anyone any good. great article steve and from someone who really knows from what he speaks
Does anyone know for sure if running Aqueduct in the winter costs more than the money they receive from on and off track betting? Then I don't see the sense of keeping Aqueduct open (except the casino has enabled New York to have the highest purse money). If they did close Aqueduct I doubt that they could raze the building due to the presence of the casino. Either the casino generates money for NYRA that they need to continue operations and/or the casino owners must have protection written into their contracts against the state pulling down their business premises so soon after it began operations. They probably have a long-term lease for ten to thirty years or so.
Great column...and it is really nice to read some one in the media being not afraid to write reality aka the plain truth...why is everyone about cutting winter racing at Aqueduct? There are people who will lose jobs and businesses that will lose sales if there is no racing at Aqueduct for what? Because of the cost of operating the track? That is a cost associated with running a business, one which the NYRA has at many times done a poor job... And for those that seem to think less racing means better quality? Think again...look at Jersey and Monmouth Park...they cut to 3-days a week a few yrs. back and how did that work? They ran 11, 12 even 13 races a day...now they are going to run 2-days a week for the first month or two and then 3-days - a total of 47 race days and yes, they will have small fields which happens when there are not enough race days to run...and it is no different in Europe where they have small fields also... Just do a better job of running the NYRA yr. round...keep Gov. Cuomo and his bs political games out of it...and most of racing and betting fans, except the fact that just like in the past, even at Saratoga for some of their stake races, small fields are part of the game, have been and always will be...
Well put... Its not rocket science. Less is more
Less racing does mean better quality. Race from April thru October. End Aqueduct and its expensive upkeep. Winter racing is horrible and insulting. Close that chapter of NY racing and you won't miss a thing. It's a new age folks.
Lots of info in this article. I didn't know that NYRA had a long term slots revenue agreement. I agree no one would buy NYRA. I do think that NYS could renege on the slots agreements. I also believe Aquduct will be sold under Cuomo. Lastly, there is no way a winter track at Belmont costs $600 MILLION.