06/09/2016 12:36PM

Cuomo wants to cap casino subsidy to NYRA

Email

New York Gov. Andrew Cuomo has introduced legislation that would return the New York Racing Association to private control but reserve six appointments to NYRA’s board for the state governor and place a cap on the amount of money that NYRA receives as subsidies from a casino adjacent to its Aqueduct Racetrack in Queens.

The bill, introduced Wednesday without any legislative sponsors, would direct 7 percent of the net revenue from the slot machines at Resorts World Casino to NYRA but cap the allotment at $46 million, with any amount over the cap going to the state’s lottery fund. In its latest financial documents, NYRA listed receiving $58 million from its share of the subsidies in fiscal year 2015, with $33.2 million of that total restricted to capital expenditures under state law.

However, a separate section of the bill appears to allocate an additional $16 million annually from the state’s general fund to NYRA for use exclusively on capital projects at NYRA’s Saratoga Race Course, the prized upstate racetrack that is the oldest track still in operation in the United States.

Although government and NYRA officials did not immediately return phone calls seeking an explanation of the bill’s ramifications, a memo accompanying the bill estimates that the legislation would raise $12 million in additional funds for the state because of the cap, but cost the state $16 million, in reference to the Saratoga appropriation. At least compared to the 2015 figures, that would appear to give NYRA an additional $4 million in money per year from non-racing sources.

Apart from the money NYRA receives in subsidies, horsemen running at NYRA tracks and breeders in New York state receive a separate allotment from the casino at Aqueduct, and that amount appears to be left untouched in the bill. Last year, horsemen received approximately $62 million through their own subsidy, according to NYRA financial statements.

The bill’s complex provisions regarding support from the casino and the state stand in stark contrast to identical, relatively simple bills filed in the Assembly and Senate in the past several weeks that merely reorganize NYRA’s board of directors. Those bills would grant NYRA eight seats on a reconstituted, 15-member board, and give the governor two appointments.

Cuomo’s legislation would establish a 17-person board in which NYRA’s appointments would have only a slight majority. While the governor would get six appointments and legislative leaders one each, NYRA would control eight appointments, with the last seat reserved for the association’s chief executive.

It is unclear if Cuomo’s legislation will garner support in the Assembly and Senate. Sponsors of the NYRA bills in the Assembly and Senate have said they intend to press forward with their versions, but a compromise piece of legislation could result from the introduction of Cuomo’s bill. The legislature is scheduled to adjourn June 16.

If a bill is not passed this year, NYRA will remain under state control for another year, legislative officials have said. Cuomo engineered a takeover of the NYRA board in 2012, citing dissatisfaction with NYRA’s management, at a time when his office was heavily involved in talks with casino interests over an expansion of casino properties in the state.

The cap in Cuomo’s bill was likely added at the behest of the casino lobby, which has long complained about the amount of financial support it provides to the state’s racing and breeding industry. The owner of Resorts World Casino, the Malaysian conglomerate Genting, has lobbied aggressively to expand its casino, one of the most lucrative in the United States, and the cap would protect any future growth in revenue at the property.

Earlier this year, the state legislature passed a bill that would allow Nassau Off-Track Betting Corporation to locate 1,000 slot machines at the Resorts World Casino, with revenue from those machines not subject to the statutes governing racing subsidies from the other 5,400 machines at the casino. As a result, those machines will only provide a small percentage of their revenue to the state’s racing industry.