08/15/2012 4:42PM

New York racing officials defend casino revenue shares

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SARATOGA SPRINGS, N.Y. – Racing industry officials defended the revenue shares that racetracks, horsemen, and breeders receive from casinos on Wednesday, a day after the state comptroller released a report contending that the revenue shares had not resulted in any gains in attendance and handle at New York tracks.

Industry officials made their comments at the annual Saratoga Institute on Racing and Gaming Law conference.

The industry was already on defensive to justify the assistance it receives from casinos as the state embarks on an effort to expand and overhaul the gambling landscape, officials said. However, the situation was exacerbated after the state’s comptroller, Thomas DiNapoli, released his report.

Richard Violette, the president of the New York Thoroughbred Horsemen’s Association, starkly disputed figures in the DiNapoli report, contending that handle and attendance at tracks operated by the New York Racing Association have increased significantly since a casino opened at Aqueduct in October 2011.

“How someone who lives and dies by the numbers could interpret them so poorly is pretty frightening,” Violette said during a late-afternoon panel.

Jeff Cannizzo, the executive director of New York Thoroughbred Breeders, displayed numbers showing dramatic drops in breeding and racing activity in New York from 2004 to 2011, coinciding with a national contraction in the racing industry, but he then rattled off the recent gains in handle and attendance at New York Racing Association tracks since the Aqueduct casino opened and NYRA’s purses climbed nearly 40 percent.

Joe Faraldo, the president of the Standardbred Owners Asssociation of New York, said that handle at Yonkers Raceway had doubled since the opening of a casino there nearly a decade ago, despite the fact that “casinos could care less [sic] about us.”

Cannizzo was bluntly critical of the relationship between casinos and racetracks.

“When you go to some of these facilities sometimes it’s hard to recognize that a racetrack is next door or a casino is attached to it,” Cannizzo said. “The point is there’s a lot to be done to integrate those two experiences.”

One casino operator conceded that not enough was being done to market racing to customers. Jeff Gural, a Standardbred owner and breeder who owns Tioga Downs and Vernon Downs in upstate New York and holds a lease to operate the Meadowlands in New Jersey, said that he agreed with Faraldo that tracks need to spend money on marketing. But he blamed horsemen for blocking tracks from using purse subsidies for marketing purposes. Without marketing efforts, harness racing would continue to suffer, Gural said.

“There is no way we can continue on a path of racing horses in front of no one, in front of empty grandstands,” Gural said. “Having empty grandstands does not endear oneself to the government.”

The protection of the racing industry’s casino supplements has become of paramount concern to Thoroughbred horsemen and NYRA because of the fragility of NYRA’s relationship with the state’s political establishment. This summer, NYRA and Gov. Andrew Cuomo reached an agreement allowing the state to take control of NYRA’s board for the next three years, in large part because of fallout over a takeout controversy and a series of catastrophic breakdowns at Aqueduct this winter.

That takeover has coincided with a push by Cuomo to allow for seven full-fledged casinos in the state, a measure that could result in changing the provisions guaranteeing NYRA and horsemen a share of casino revenues. The legislature passed a bill allowing for the casinos earlier this year, but because the legislation would amend the constitution, the same bill will have to pass next year and then be approved by voters in a state-wide referendum in order to become law.

If the casino-expansion bill becomes law, politicians in New York will have the power to award full casino licenses to existing casino operators, including Genting New York, which operates the Aqueduct casino. If Genting is awarded the casino license, the current revenue distribution from gambling proceeds will be set anew by the state. NYRA and its horsemen currently share approximately 14 percent of the proceeds from casino gambling at Aqueduct.

Sen. John Bonacic, the chairman of the Senate’s Racing, Wagering, and Gaming Committee, said on Wednesday at the law conference that legislators anticipate awarding only one casino license in the New York metropolitan area. Genting New York would be considered the favorite to receive that license, Bonacic said, given the company’s deep pockets and its success with the Aqueduct casino.

John Featherstonhaugh, the president of the New York Gaming Association, which lobbies on behalf of the existing casino properties, said that he believed the public would not pass a referendum unless the legislature had already determined where the casinos would be located and how the revenue from the casinos would be distributed.

“The public wants to know, if there are going to be casinos, where they are, how they are going to be run, what the tax rates are,” Featherstonhaugh said.

Chris Wittstruck, a Thoroughbred and Standardbred owner who is an authority on New York racing law, said that during the process to determine locations, legislators will likely contemplate whether to award a license to an operator who wants to open a casino at Belmont Park, NYRA’s sprawling property on Long Island. That discussion will occur while the state controls NYRA’s board.