New York Racing Association numbers up for the year

The New York Racing Association, the nonprofit quasi-state agency that operates Aqueduct, Belmont, and Saratoga under a lease agreement with the state, had net income in 2012 of $25.6 million, according to audited financial statements the association posted on its website.

The $25.6 million profit was the first multi-million dollar net-income figure posted by NYRA in a decade. Not coincidentally, NYRA’s 2012 results included a full year of subsidies from a casino adjacent to Aqueduct that provided the association with $20.2 million in direct operating subsidies in 2012, along with $44.3 million for purses and $26.9 million for capital improvements.

For the past decade, NYRA has struggled to post positive operating results, often losing tens of millions of dollars a year. The association filed for bankruptcy in late 2006, emerging in 2008. It began receiving subsidies from slot machines in late 2011, 10 years after the state legislature first authorized a casino at Aqueduct.

Total operating revenue for 2012 was $274.4 million, an increase of 8.7 percent compared with operating revenue for 2011. Operating expenses surged 18.4 percent to $339.2 million, for a total operating deficit of $64.8 million. NYRA, however, includes its total purse distribution as operating expenses while recording the contributions of subsidies to purses from the casino as non-operating revenue, inflating the operating deficit by approximately $44.3 million. As a result, according to NYRA’s financial statements, without the subsidies it would have posted an operating loss of $20.5 million.

Total revenue from wagering for 2012 was $245 million, up 9.3 percent from $224.1 million in wagering revenue in 2011. Revenue from wagering at sites operated by New York offtrack betting companies was down 1.1 percent, however, as the companies continue to struggle to attract and retain customers in the post-OTB era.

Total handle in 2012 on races at NYRA’s three tracks was up 11.9 percent, according to the financial documents, to $2.19 billion, or one-fifth of the national total on U.S. races in 2012. Ontrack handle was up 8 percent and simulcast handle up 13 percent.

Although NYRA received $26.9 million last year in subsidies for capital improvements, the association spent only $13.3 million in 2012 on capital improvement projects, according to the documents. Approximately $1.8 million of the total was spent to fund “master development planning and surveys at Saratoga,” the 150-year-old racetrack in upstate New York that is being targeted for major improvements in the future.

A NYRA spokesperson, Ashley Herriman, said that the capital-improvement surplus is currently in a restricted account and will be used along with future funds for projects that are still in the planning stages.

“Our capital improvement projects take time to plan,” Herriman said.

NYRA also acknowledged on Tuesday that it had asked the New York Thoroughbred Breeding and Development Fund to repay the association $1.2 million after discovering that it made payments to the fund in excess of its statutory requirement from 2008 to 2012. New York regulators are currently reviewing the request, NYRA said.

The fund distributes approximately $40 million a year in awards for breeders. It is funded through a percentage of the wagering handle and also receives a cut of slot-machine revenue at racetracks in the state.