09/29/2005 11:00PM

It's time to end this debate


NEW YORK - The recent final report by Getnick & Getnick, the federally appointed monitor overseeing the New York Racing Association for 18 months during its deferred-prosecution agreement with the United States attorney, concluded with one primary call to action:

"Of the many recommendations set forth in this report, we most strongly recommend that (1) The Racing and Wagering Board act as soon as possible on the joint NYRA/Capital OTB and Nassau OTB Player Reward Program proposal (pending since May 6, 2005) as a countervailing measure to the cut-off of rebate shops."

Unfortunately, that call is being ignored, and New York horseplayers remain among the last in the country ineligible to participate in the kind of customer-rewards programs now common in other major racing jurisdictions. The board issued a statement 10 days ago saying that "there are diverse opinions . . . about whether cash rebating is something that should be allowed," and that it needed to study the matter further. This past week, NYRA officials met with the board for over three hours and emerged believing that no action is likely any time soon.

Debating whether rewards and rebates are philosophically a good idea is arguing over a ship that has long since sailed. Just as credit-card companies, banks, and airlines all now routinely reward loyal customers with cash-back awards and points redeemable for prizes, so do most major racetracks. Churchill Downs-owned tracks have the Twin Spires Club, and Magna's California tracks have the Golden State Rewards program. Closer to New York, Monmouth and the Meadowlands have the Big M Club, where over 5,500 members who account for 30 percent of the tracks' handle are eligible to receive rebates from 1 to 6 percent.

The board's failure to act for nearly five months now on a proposal to bring such a program to New York not only puts local consumers at a disadvantage, but also actively deprives the state, the board itself, and the owners and breeders of horses racing in New York of needed revenue.

These out-of-state companies are offering rewards on wagers placed on New York races, for which they are paying only a modest signal fee of 3 to 4 percent of handle, a fee split between NYRA and the horsemen. If the same wagers were being made through a NYRA-One Account offering competitive rewards, purses would be getting nearly 6 percent of the handle instead of 1.5 to 2 percent, and both the New York breeders and even the board would be receiving statutory payments of 0.5 to 0.7 percent of handle instead of nothing.

NYRA already is suffering a nearly 10 percent decline in out-of-state handle this year because of the insistence of the monitor and federal prosecutors that it stop doing business with 10 rebate shops in the wake of the indictments of Thoroughbred owner Gerald Uvari and trainer Greg Martin. Whether that decision was a positive one for the integrity of the betting pools or an overzealous reaction is an open question, but in any case it seems that allowing NYRA and the state's OTB's to offer some form of rebating is an appropriate antidote.

So why is the board withholding its approval, on even an experimental basis, for what seems like a no-brainer industry standard being offered by most of New York's competitors?

The board says it is a complex issue requiring lengthy consideration, but two other factors appear to be at work. The first is that while Capital OTB and Nassau OTB have endorsed the NYRA plan and wish to offer the same program to their customers, the state's four other OTB's are not on board. The other is that the board has expressed its displeasure at not being consulted by Getnick & Getnick to provide any input for the monitor's report to the federal prosecutors. So the strength of the monitor's recommendation to institute a rewards program may have tempered rather than stoked the board's enthusiasm for the program.

Neither of these factors is a legitimate reason to delay an overdue rewards program for New Yorkers. By being so cautious and deliberate, the board is both depriving the state's consumers of benefits being offered elsewhere and driving betting dollars out of state where they return far less money to the racing industry.