New York Racing Association nets big income in third quarter

The New York Racing Association had net income of $24.8 million in the third quarter of 2012, up 142 percent compared with net income in the third quarter of last year, largely due to payments from a casino at Aqueduct, according to unaudited financial statements posted on its website Friday.

NYRA posted the financial statements five days after the association’s chief operating officer, Ellen McClain, briefly discussed NYRA’s third-quarter performance at a meeting of the New York Racing Oversight Board on Monday. The board regularly reviews NYRA’s contracts and operating decisions.

NYRA has not typically announced its quarterly financial performance. Earlier this year, the NYRA board was dissolved and replaced by a board with a majority of state appointments, and the new chairman has said that its board meetings will be conducted publicly.

NYRA said net revenue during the quarter – which included results from its 40-day meet at Saratoga, the association’s most high-profile meet – was $72.9 million. Revenue from racing operations during the quarter was $59 million, up $4 million, or seven percent, the association said, while revenue from video lottery terminals, or slot machines, was $23.8 million. Total expenses were up 3.9 percent, NYRA said.

Although casino payments are playing a large role in NYRA’s increases in net income and revenue, the association’s net revenue from racing operations is up 9.8 percent over 2011 through the first nine months of the year, to $124 million, according to a statement posted on the website. Handle at NYRA’s marquee meets has been strong this year, and the gains have outpaced a slight growth in handle overall at U.S. racetracks through the first nine months of the year.

Through the first nine months of the year, gross casino revenue has been $68.6 million. NYRA received $35.6 million of that total.

In a 2012 budget submitted to the oversight board earlier this year, NYRA projected that total net revenue for the year would be $195.4 million, including a net of $48.1 million from casino payments, not including the casino payments dedicated to purses. In the budget, the association projected that it would have a total net income of $18.9 million this year.

The casino opened late in 2011. NYRA lost $24.3 million in 2011 and $17.3 million in 2010, not including tens of millions of dollars in adjustments to its benefit and post-retirement plans. Part of the reason for the large losses in 2010 and 2011 was due to the bankruptcy of New York City Off-Track Betting Corporation. The association is eager to demonstrate that it is capable of turning a profit, even if much of that capability rests on the payments from the casino, which has already become the highest-grossing slots facility in the country.