01/24/2013 5:51PM

Hayward and NYRA in settlement dispute

Email

Charles Hayward, the former chief executive officer of the New York Racing Association, reiterated in a statement Thursday that the NYRA board acted improperly when it fired him last May over allegations that he knew the association was applying a takeout rate to some superexotic wagers that was in violation of state law.

Hayward issued the statement after the Albany Times-Union reported that Hayward was seeking compensation from NYRA under the terms of his employment contract, which was terminated in May. In the statement, Hayward acknowledged that he was seeking a resolution to his contract after reiterating that he believed he was “terminated arbitrarily and without cause.”

“I had an employment agreement with NYRA and met all of my obligations,” the statement said. “I expect NYRA to do the same.”

In the statement, Hayward said that allegations made in a state report examining the takeout issue were “false” and that NYRA’s board “denied my request for an opportunity to challenge” the allegations “or set the record straight.”

NYRA officials said Thursday they would have no comment.

Hayward was fired on May 5, five days after the New York State Racing and Wagering Board released a report into the takeout matter, which was first raised in December 2011. Patrick Kehoe, NYRA’s general counsel, was also fired.

The New York State Racing and Wagering Board report was forwarded to the state Inspector General’s office, which said it would conduct its own investigation. Although several officials have said for months that the Inspector General had completed an investigation, representatives of the Inspector General’s office have not returned regular phone calls since December seeking the investigation’s findings. Another call on Thursday was not returned.

Hayward’s statement said that NYRA had had conducted an internal investigation. “To date, no report of either investigation has been issued to the public,” his statement said.

When Hayward was fired in May, NYRA’s board released a statement saying that Hayward and Kehoe “failed to perform their duties at a level required by the board.” At the time, NYRA was under pressure from Gov. Andrew Cuomo, who had called for the association to investigate a string of 21 deaths at Aqueduct’s inner-track meeting and had made public comments critical of the association’s management. The state’s Racing Franchise Oversight Board threatened to recommend that NYRA’s franchise to operate three tracks in New York be rescinded.

The racing and wagering board’s report included excerpts from e-mails written by Hayward detailing his frustration with the superexotic takeout rates, which were supposed to be reset to 25 percent in September 2010, following a legislatively mandated 1 percent hike for a two-year period. In one e-mail, Hayward said that he believed the takeout was too high but that he did not feel NYRA could lower them because of ongoing losses at NYRA and political pushback from the state’s OTBs, which benefited from the higher takeout by keeping a larger share of revenue from bets.

The takeout error was first discovered by state auditors who were conducting a review of the New York Thoroughbred Breeding and Development Fund. The 26 percent takeout had been applied for a 16-month period, costing bettors across the country approximately $8 million in reduced payouts, according to the racing and wagering board report.

When it was first discovered, NYRA lowered the takeout on the affected wagers to 24 percent. The association, in a statement, called the error “an unexpected oversight . . . due to the complexity of the takeout provisions of racing law.”

Hayward’s annual salary at NYRA was $475,000. A former publishing executive, he was hired by NYRA in 2004 following a stint as chief executive of Daily Racing Form .