12/10/2013 3:25PM

Kay gives glimpse into future of NYRA at racetrack symposium

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TUCSON, Ariz. The New York Racing Association’s new marketing strategy of focusing on the “guest experience” at its three tracks is working and the association’s board remains on target to restructure and “reprivatize” the non-profit by late 2015, NYRA’s new chief executive, Chris Kay, said during a speech opening the University of Arizona Symposium on Racing and Gaming on Tuesday morning in Tucson, Ariz.

Kay said that measurements of handle, attendance, and per capita spending at the Belmont fall meet and ongoing Aqueduct winter meet showed positive results for NYRA’s new marketing strategy, which he said borrows from his former experience at Toys ‘R’ Us and Universal Parks and Resorts. While attendance and handle were down slightly at the marquee Saratoga meet, Kay said that per-capita spending on food and beverage and merchandise at the meet was up 15 percent, calling that a better measure of the track’s performance.

“Attendance doesn’t spend money,” Kay said. “People do.”

The Tuesday speech by Kay was his first public presentation to the racing industry as chief executive of NYRA since being hired by the association’s board in the summer, when not counting presentations he has made that have been live-streamed over the Internet as part of NYRA’s new policy to televise its board meetings. Kay was tabbed by a board that was restructured following the state takeover of the non-profit late last year at the behest of New York Gov. Andrew Cuomo.

Kay did not drift far afield on Tuesday from his presentations to the NYRA board, except in two instances: the first mention that NYRA is attempting to position itself for the possibility of the legalization of exchange wagering, and his first expansion on what the “reprivatization” of NYRA two years from now might entail.

Kay briefly stated that NYRA was preparing for exchange wagering as part of a series of comments on the company Global Betting Exchange, which NYRA recently hired to run its account-wagering platform. While Global Betting Exchange is known for setting up betting exchanges for overseas clients, NYRA officials had previously stated that the company was being hired for its expertise in online betting systems and had declined to comment on whether the company would develop an exchange-wagering platform for NYRA.

Exchange wagering, which was pioneered by the British company Betfair – also the owner of Television Games Network in the U.S. – is legal in some foreign jurisdictions, and two states, New Jersey and California, have passed laws allowing for the practice. Those laws require agreements with horsemen and tracks before the platforms can be launched, and so far racing constituents in the two states have not yet signed on, citing integrity concerns and a business model that, while beneficial to bettors, returns far less to horsemen and tracks than the current pari-mutuel system.

Exchange wagering allows bettors to post prices on horses and accept bets at those prices. Under the system, one side is betting on a horse to lose. Survey after survey has indicated that U.S. racing’s largest problem is the perception of its integrity, and critics of the system have said that the implementation of exchange wagering could further complicate racing’s ability to market its product because of the perception, right or wrong, that bettors could conspire with racing participants to hold horses, a far easier task than getting a horse to win.

Of course, Kay may have mentioned the possibility of exchange wagering as part of a strategy to begin to drum up interest in the “reprivatization” of NYRA. NYRA and state officials have not made clear what the state is planning for NYRA at the end of the three-year term of the restructured board, but it’s widely believed that the association will be put out to bid. The possibility of exchange wagering on NYRA’s product could entice betting-exchange companies into the mix.

Kay and other board members have recently said they will focus on making NYRA profitable, at least on paper, without the benefit of counting the tens of millions of dollars of revenue derived from statutorily required payments from a casino located on the property of Aqueduct Racetrack. But any plan to make NYRA profitable – and attractive to a private company – would almost certainly entail the overhaul of New York’s racing statutes, which contain carve-outs of NYRA’s revenue to a host of constituents and put hurdles in front of any plan by NYRA to open OTBs in New York City’s five boroughs.

Kay said during his speech that NYRA is reviewing the state’s laws for any changes it deems necessary to return the association to a cash-positive position, as well as reviewing the requirements for its real estate holdings (the state owns the deeds to the land as part of an earlier bankruptcy restructuring). He also said that a consulting group hired by NYRA is evaluating “various scenarios for each property” and “weighing the return on investment” for those scenarios. One of those scenarios could include the closing of Aqueduct.

But beyond that, Kay did not offer any further details on reprivatization, other than to promise a lot will be “new” after three years of state oversight.

“We have an opportunity to create a new structure, a new business plan, a new set of revised regulations, and a new corporate governance for a new state of racing for New York,” Kay said.

Anonymous More than 1 year ago
Kay is as qualified as Obama!
IRANIANMULLAH More than 1 year ago
More racing on ESPN. that's the ticket follow the Texas holf em plan
russell More than 1 year ago
Kay is a pigeon or better yet a flamingo with his head in the sand. It is clear that he's in bed with the owners and trainers. Why would you offer obscenely high purses for marginal horses while Belmont and Aqueduct are falling into serious disrepair? This certainly doesn't help attendance or the bettors. What has he done to help his best customers? No promotional giveaways or lowering the takeout. Instead offer bad NY Breds 75k purses. A complete embarrassment.
chad mc rory More than 1 year ago
NYRA misses a real shot as CHRB names Bo Derek co-chair...
edb More than 1 year ago
Were his first remarks that next year's meeting will charge $10 per seat and your parking ticket will not be validated? When he screws up Saratoga, it's all over. Talk about beating a dead horse. He is right that people spend money. But it is a question of where they are spending their money from. His responsibility is to oversee the whole operation and its success. He needs to give incentives to declining areas such as attendance. Unless his plans include virtual racing, he needs the tracks and all the go withs. It is a tough balancing act and a daunting job. Please don't do the usual, which is cutting services and people at the bottom and keep upper management cozy. Or Aqueduct becomes a shopping mall or a parking lot and we will be betting Australian races at home. P.S. get the best tax people on your side and fight the fight to get the industry moving in the right direction.
Richard More than 1 year ago
So lets see........Macy's is losing " in store " customers in droves thanks to the customers new found ability to place purchase orders over the internet and avoid the costly trip to the store. In response, Macy's decides to charge more money for "in store purchases." Seems like a sound business plan to me ! NOT !!!!!!!!!!!
Richard More than 1 year ago
In replying to myself it just dawned on me that the whole idea of raising the cost to come to the track is to force people to avoid coming to the track so that the "overhead" can be justifiably eliminated due to lack of need. Next step would be: eliminate the track and condense the production of your product thereby leading to selling the facility to any buyer who won't use it for racing.
Justin Time More than 1 year ago
Mr.Kay’s resume to be in charge of running NY racing is rather very questionable and it is a shame that who ever saw fit to appoint this man for such a demanding position does not have the balls to come forward and claim responsibility for the demise of NY racing. Like really by what logic does an executive whose previous employer was TOYS R US and dealing with children’s mentality qualify to resurrect NY racing. If this question alone does not put a lot of trepidation into the workings of the NY racing association, then I must conclude that there is a much hidden agenda behind this appointment. Would it be presumptuous to assume that Mr.Kay’s appointment is simply a maneuver to bamboozle the racing fans who visit NY tracks to part with their hard earned money for a lesser and most notably customer service and ambiance? Shame on all of you at the NY racing association for exhibiting such arrogance. Only a boycott of the NY tracks until things are handled properly and the racing fans are shown some respect will put some sense into these barons and earls that have completely lost their compass.
Frank More than 1 year ago
What an embarrassment for the fine people of New York State having this moron as its racing chief,
Jack More than 1 year ago
If Mr.Kay's hat BLEW off in a windstorm he wouldn't know which direction to go in to retrieve it.Very SAD this 'Nit-wit" was giving a microphone..... .
Thomas Koski More than 1 year ago
Guest experience? At Sartoga you cannot buy a beer for less than seven dollars, or sit down in the grandstand for less than eight dollars and now he wants five dollars to walk thru the gates. This while NY breds running for a $14,000 optional claiming tag can win $42,000 as the winners share of a $70,000 purse. Yes, the fans are sure sharing in this Racino bonanza. The same shabby treatment I have received as a bettor/fan for over 50 years. Disgraceful and disgusting.
Anonymous More than 1 year ago
you can bring in your own 12 pack for $11.99 !