03/03/2014 11:46AM

Jay Bergman: Faraldo sees Monticello dispute as a fight for survival

Derick Giwner
Monticello Raceway and it's horsemen are currently in the midst of a contract dispute.

Joe Faraldo is worried about the future of racing in New York.

As an attorney for the Monticello Raceway horsemen, Faraldo sees the current contract dispute as pivotal towards the future of all racing in the Empire State.

Perhaps this fight has been made a bit more dramatic than it should be, but Faraldo and his horsemen are ever wary of what the future will look like now that casinos have been approved and “Racinos” are moving towards getting them.

“Once they become a casino they can remove the VLTs and install slot machines,” said Faraldo, extending to the limits of possibilities ahead should Monticello be successful in gaining a casino license, and perhaps later, Saratoga and Tioga doing the same things.

The horsemen are connected to the VLTs by original legislation and Faraldo believes that those tracks successful in gaining full casino licenses will attempt to distance themselves from the very horsemen who made casino gaming an option in New York.

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“We were partners,” said Faraldo about where the horsemen stood when the initial law was drafted. “Even when they (New York Gaming Associates) were pushing for passage of the casino bill, they used a study that we and the thoroughbred horsemen paid $50,000 for to make their point in Albany.”

That study explored the economic impact that VLTs have had in New York and the related jobs the revenue has helped to pay for.

For Faraldo and the Monticello horsemen, there is of course concern that the partnership will come to an end and that racetrack owners will want to be known only as casino owners without ties to the racing industry.

Though it may be hard to imagine that lawmakers will just allow racetrack casinos to cut the horsemen out of the equation while rewarding them with full blown gaming, Faraldo and the Monticello horsemen he represents worry about the obvious.

“They spent $2 million lobbying in Albany. We don’t have that kind of money to spend,” Faraldo said.

The New York Gaming Association released a statement last week extolling the positive impact they have made on racing.

Here is an excerpt:

From 2004 to 2013, NYGA members have generated $1.1 billion in support of the racing and breeding industry.  This includes $235 million in 2013 alone, a full 12 percent of gross gaming revenues. These funds support more than 4,000 full-time equivalent racing and breeding jobs and help to sustain New York’s 2,300 breeding, training and racing facilities, in addition to 23,000 family owned farms.

While the numbers are impressive, Faraldo and his horsemen cautioned about the meaning.

“They are talking about money that was not given to us by them, but granted fully by legislation,” Faraldo said.

NYGA statement continued:

Furthermore, NYGA members provide a venue for New York’s racing product offering more race dates than any other state in the northeast.  Without the financial support of NYGA member facilities, there would be no more racing in New York State.

While this statement is accurate, should the NYGA give itself credit for conducting racing at the racetracks that house slot machines? There would have never been one slot machine at any of those locations had horse racing not taken place first.

Of significant concern to the horsemen is that the partnership be protected going forward. It’s been an obvious marriage of convenience, but Faraldo suggests horsemen have shown concern for the best interests of the racetrack owners.

“We (Monticello horsemen) could have taken more money towards purses when we started but we accepted less with the understanding that the tracks were making capital investments that would ultimately help both parties,” Faraldo said.

In essence, a partnership was forged with horseman not only helping to push for legislative change, but sacrificing from the initial pie in order to speed the process.

Of concern to horsemen in New York and wherever else slot money is rolling in, is that promotion of racing appears to be waning. There are many who suggest that horsemen and horsemen alone should be responsible for promoting racing, but that would imply that the partnership only works one way. “The tracks can spend money to promote racing and be reimbursed by the State but they have decided not to,” said Faraldo.

It’s a critical time for all of racing and promoting the sport is essential to having any future, whether with casinos or without them. If horsemen are offered no guarantees it’s obvious where things will go.

Faraldo was quick to point out that compromise can be had and that the horsemen are not looking to break the bank.

“We’re offering numbers that only kick in when slots revenue hits certain plateaus,” said Faraldo, with a view that horsemen just want to do what’s right in order to keep the partnership alive and thriving.

At the same time, Faraldo suggested that if the racetrack owners don’t want to participate in the promotion of racing they should give up part of the revenue they receive from racing.

“They’re getting 50 percent of the revenue generated from race wagering,” said Faraldo, “If they don’t want to be partners on the promotion side, why not give up the 50 percent and let us run the racing side?”

With the likelihood that full casino gambling will not come to metropolitan New York for at least seven years, Faraldo, the president of the SOA of NY (Yonkers horsemen), appears to be pro-active in securing agreements that will forge a future for horse racing in the state and not signal its eventual demise. He suggested that Monticello is his focus since the horsemen are negotiating a new contract and that no other horsemen’s group with potential casino implications has an expiring contract.

The shape of any reconciliation at Monticello will go a long way in determining what that future will be.

While agriculture and green space has benefitted greatly from the VLT legislation, the same can’t be said for the health and well being of the actual racing product. It’s easy to point a finger at racetrack management since they have generally geared their attention to a more lucrative profit mechanism, namely the slots. At the same time, horsemen should be aware by now that if they can’t help convert larger purses into a more popular betting product, eventually the state will grow weary and look to divert money to other, more worthy causes.

That’s a message that Faraldo seems to have gotten.

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“That’s why we (Yonkers horsemen) are working so hard to get co-mingling of wagering from other countries,” Faraldo said. The Yonkers horsemen are anxiously looking forward to October when the French will likely begin to simulcast Yonkers races. “Their (French) pools are huge, as much as four million euros,” said Faraldo with apparent optimism. “If we can get that money co-mingled, can you imagine what we could create?”

The problem right now at Monticello and for horsemen in general is to keep the foundation as secure as possible while looking to build a better and more prosperous future.

I still like to believe that racetrack owners won’t kick horsemen out the door if they are granted the keys to enormous profits.

But you never know what goes on behind closed doors.