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NYRA looks to financial independence
SARATOGA SPRINGS, N.Y. - While the New York Racing Association is heading towards profitability mostly because of the revenue generated by the casino at Aqueduct, its board of directors on Wednesday stressed the importance of the organization being able to stand on its own two feet moving forward.
NYRA "still operates at a negative" without video lottery terminals, Stuart Subotnick, a board member and chairman of the board's finance committee, said during a presentation at Wednesday's Board of Directors meeting held at the National Museum of Racing and Hall of Fame here. "With VLT's we're profitable and looking more and more profitable. But the committee stresses more and more to have the racing business, on its own, operate profitably."
Through the first six months of 2013, NYRA had an operating loss from racing operations of $10.3 million, an increase of $5.2 million compared with last year. Total handle on racing at Aqueduct and Belmont was $1.076 billion, a $58 million or 5 percent decrease from the $1.134 billion handled in 2012. Ontrack handle was reported at $284.2 million, a $15.2 million or 5-percent decline from last year.
NYRA, however, earned $54.3 million from VLT revenue, of which $27.1 million went to purses, $15.6 million was made available for capital expenditures, and $11.7 million went to NYRA operations. The take per VLT machine at Resorts World is $443 in 2013, up substantially from $372 a year ago.
While current law dictates that NYRA gets 7.5 percent of VLT revenue from Resorts World New York indefinitely, new gaming legislation proposed this fall could put more casinos in competition with Resorts World.
As noted by board member Robert Megna, who is also the New York State Budget director, "gaming in New York is in ongoing transition. No one knows where VLT business is going to be."
NYRA hopes to stand on its own two feet by streamlining its operations, i.e, cutting expenses, while also hoping to earn revenue from entering the New York City offtrack betting market.
"We must find a way to decrease the expenses we can control, and we will," said Chris Kay, who attended his first board meeting as NYRA's CEO and president. "Find a way to increase our revenues. We've taken exploratory steps in that direction."
Kay said that when he was the COO at Toys R Us, "we were able to reduce our net debt by $1.2 billion."
NYRA has a plan to put wagering machines into 40 restaurants and bars in New York City by 2017, but NYRA officials acknowledge that proposition faces many hurdles, including potential opposition from local communities as well as a new mayor who will be elected later this year.
"These could be things that could hold us up," Subotnick said. "It's a great idea, a great endeavor, but we have to be smart how we do it. We may need some outside help, lobbying help."
NYRA's chairman, David Skorton, said after the meeting that one of the pledges by the new NYRA board was to make NYRA sustainable financially.
"I believe a reasonable approach is to see if we can hit the mark of being at break-even not touching the VLT revenue," said Skorton, who later in the day attended his first live race at Saratoga as NYRA chairman. "It'll be a good news story, not a bad news story."
NYRA reported that heading into the final week of racing, Saratoga's all-sources handle was up 1.9 percent from last year, though specific numbers were not provided. In addition, NYRA reported that food sales, group sales, and apparel and merchandise sales are up 18 percent from a year ago.
When asked about ways to have NYRA stand on its own, Kay said, "We're going to focus on the quality of our racing. . . . We're going to work harder to get even more of that share, if you will, of the national handle. We're going to work with the state on ways to develop new tourism both here and downstate in association with our races."
Kay said that NYRA has retained the services of the recruiting firm RSR Partners, to help in the search of a vice president of racing operations. He hopes to have one hired in 60 to 90 days.
Kay was asked about the annual rumor regarding possibly expanding the Saratoga meet. He said NYRA has been compiling data throughout the meet and will evaluate it later this fall before making a decision on race dates that will be discussed at the Dec. 4 board meeting.
"It's a very delicate balance, we want to make sure we keep Saratoga very special," Kay said. "Some time in October we'll look at the data and see what it is. This has been a very successful meet to date. It looks like a 40-day meet has been very successful this year."
** Amtote will replace United Tote beginning the day after the Saratoga meet. NYRA officials have 1,200 new machines installed at Belmont and Aqueduct, and there will be learning kiosks at both plants for the month of September. Current NYRA Rewards cards will be able to be used in the new machines.
** Construction on Longshots, a 24,000-square foot simulcasting facility/sports bar at Aqueduct has begun, and it is targeted to open Jan. 1.
- 1.Posted 12/04/2013 11:20AM
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- 5.Posted 12/02/2013 02:02PM