01/17/2017 2:25PM

Industry representatives urge lawmakers to return NYRA to private hands


Representatives of the New York racing industry and the community of Saratoga Springs urged a committee of lawmakers on Tuesday to return control of the New York Racing Association to a private board while lashing out at a recent maneuver by a casino that has reduced subsidies to the industry by millions of dollars.

The statements were made at an hour-long hearing of the New York Senate Racing, Gaming and Wagering Committee on Tuesday, stacked with speakers of a like mind on issues considered critical by the racing industry in the state. The committee is chaired by Sen. John Bonacic, a Republican who represents Sullivan County in upstate New York who has criticized New York Gov. Andrew Cuomo for retaining control of NYRA two years longer than originally proposed.

Bonacic opened the meeting by listing a string of tax-incentive programs advocated by Cuomo, a Democrat, contrasting that list with what he alleged to be Cuomo’s inattentiveness to the state’s racing and breeding industries, which he said were far larger than the industries receiving tax breaks.

“I’m not here to beat the governor up,” Bonacic said. “But why am I bringing these things up? It shows in my mind what’s a priority for this governor. What’s important? What is he saying with his priorities?”

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Cuomo engineered a state takeover of the NYRA board in 2012, citing dissatisfaction with the board and the association’s management. Under the enabling legislation, state control of the board was to have ended in 2015, but Cuomo has instead overseen two extensions.

At the time of the takeover, Cuomo and his staff were involved in discussions with casinos interests over an expansion of casino gambling in the state, and those talks touched on a number of land-use issues at NYRA properties, which are owned by the state. Those questions, such as the closing of Aqueduct, remain open.

Kathleen Marchione, a Republican senator who represents part of Saratoga County, said that she would call on Cuomo to return control of the board to NYRA, contending that the delays had weakened the association’s ability to plan.

“New York State has to make good on its promise to return NYRA to a private corporation,” Marchione said. “The reality is that key long-term decisions on important issues and critical multi-million investments are being delayed until NYRA is re-privatized as a private non-profit. It is doing real harm.”

Approximately halfway through the meeting, Bonacic said that his staff had just handed him information saying Cuomo intended to end the state’s control of the board through his proposed state budget, which has not yet been released. That information came from a blog post in the Albany Times-Union, which quoted an unnamed advisor to the governor. The post also stated that the budget would allow night racing at NYRA tracks and a reduction in winter racing at Aqueduct.

Joe McMahon, the owner of McMahon Thoroughbreds of Saratoga who was an invited speaker at the hearing, said that the breeding industry in the state was being prevented from growing by “uncertainty” about the state’s political motivations.

“There is a lingering concern that politics is threatening what is becoming a vibrant industry in our state,” McMahon said. “They don’t feel the state government is a trustworthy partner.”

While all five speakers at the hearing indicated that they supported plans to end the state’s control of NYRA’s board, the most pointed remarks of the hearing involved a maneuver last year by Nassau County Off-Track Betting Corporation and Genting, which runs a casino at Aqueduct, to designate 460 of the casino’s machines to a 1,000-machine allotment awarded to Nassau at the end of last year’s legislative session. Racing representatives have said the maneuver will reduce the racing industry’s subsidies from the Aqueduct machines by $20 million annually.

Racing representatives argued that the intent of the legislation was for Genting to add an additional 1,000 machines to its current casino floor, which has 5,500 machines. Instead, Genting and Nassau designated the 460 highest-grossing machines on its floor to Nassau, they said, and because the statutory requirements for revenue sharing are lower for the Nassau machines, the racing industry is being shortchanged.

“They didn’t add 1,000 machines,” said Jeffrey Cannizzo, the executive director of the New York Thoroughbred Breeders. “They took. They took 460 machines from the racing industry.”

Richard Violette, the president of the New York Thoroughbred Horsemen’s Association, called the maneuver “outrageous” and urged the committee to push for legislation to address the situation. He also said that the racing industry was blind-sided by the deal, which was hashed out in private on the last night of the 2016 legislative session.

“There is nothing equitable, there is nothing fair about this whole setup,” Violette said. He estimated that purses would decline $10 million-$12 million this year because of the arrangement.

Bonacic ended the hearing by saying that he would introduce legislation addressing the Nassau-Genting reallocation. He also said that he was looking forward to seeing Cuomo’s plan for NYRA’s reprivatization.

In written testimony submitted to the committee, NYRA chief executive Chris Kay said that NYRA has had a “productive dialogue” with Cuomo’s office over the past several months, and he said, “We look forward to working with the legislature and all stakeholders in efforts to pass the [the governor’s] proposal.”