12/04/2013 7:01PM

NYRA raises admission fees at Belmont, Saratoga as part of 2014 budget

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NEW YORK - Though several board members balked at the idea, the New York Racing Association Board of Directors on Wednesday passed a 2014 budget that includes a raise in admission fees at Belmont Park and Saratoga.

However, NYRA management was asked to do more research into the potential negative impact on business for raising such fees and will re-visit the topic at the next board meeting in March.

Based on the budget that was passed, NYRA would show a $250,000 profit in 2014 - compared with a $10.5 million deficit in 2013 - that would not include revenues it receives from Resorts World, the casino at Aqueduct. However, when factoring in VLT revenue and the taxes NYRA must pay on that revenue, NYRA faces a $1.8 million deficit in 2014.

In presenting the budget for 2014, NYRA president and CEO Chris Kay proposed raising grandstand admission from $3 to $5 and clubhouse admission from $5 to $8 at both Belmont and Saratoga. There would also be unspecified increases on parking and for box seats at Saratoga. Kay said that NYRA has not hiked admission fees since 2005.

Kay said NYRA has budgeted $1.8 million to $2 million in revenue based on those increases. He said in order to achieve that same revenue from handle “requires $44.6 million more in handle.”

“We’ve looked at the kind of demand and the prices people pay in New York City to go to first class sports and entertainment facilities and we felt this was appropriate,” Kay said.

Several members of the board members voiced opposition, led by Earl Mack, a voting member and John Hendrickson, who is not a voting member but a special advisor to the board.

Mack, who participated by phone, was in favor of raising prices at Saratoga but said it would “be a bad mistake to raise those prices at Belmont where people are already skeptical about coming.”

Hendrickson, who lives in Saratoga with his wife Marylou Whitney, said “it is wrong to punish the fans” by raising prices. Others, including Barry Ostrager, were against the raise in fees while some, including Stuart Janney and Bobby Flay, were in favor of it.

After much discussion, the price increases were included in the passage of the budget but Kay was asked to do some market research on the impact it could have and present it to the board at its next meeting in March.

 “Change is difficult,” Kay said after the meeting. “It would be a lot easier for our management team to keep everything the way it is and then what would we have?”

NYRA chairman David Skorton was in favor of passing the budget with its admission fee hikes.

“Our first duty is to be fiduciaries we do what we need to do to stem the flow of red ink,” Skorton said.

Skorton directed Kay and his management team “to before the season actually starts do market research and use the results as data.”

To those opposing the hikes, Skorton said, “none of what you’re saying is based on data, [but] based on knowledge of the field and sensitivity and having your ear to the ground.”

NYRA’s budget was designed to come to a break-even point without factoring in revenue from VLTs, which Kay said NYRA wants to use “to grow the business rather than use the funds to offset operating deficits.”

However, based on revenues for VLTs, NYRA is hit with a $13 million tax expense. Combined with $12.5 million in retire benefits and pension expenses - what NYRA termed legacy costs - NYRA will have a deficit in 2014 of $1.8 million.

There were suggestions made by some board members that the tax burden could be lifted if the VLT revenue earmarked for NYRA was first given to the state and then the state passed it on to NYRA.

Ostrager, a prominent New York breeder said “this a very complex issue. Once you give the money to the state they’re not going to give it back.”

In addition to raising fees on bettors, NYRA plans to raise fees on those who import NYRA’s signal, which could bring pushback from out-of-state tracks and off-track wagering companies.

“I don’t think people will not carry NYRA but it’s certainly one of those things when you have a business product and you say here’s the value of it some people may say okay and they’ll buy it, and some people may so okay and they won’t,” Kay said.

One thing that was not brought up at the meeting was NYRA’s previously stated desire to re-enter the New York City Off-Track Betting market by getting into bars and restaurants in the city. At previous board meetings, this was identified as a potentially important new revenue stream, but it was not broached in the 2014 budget.

“We’re going to try and work on things for a while to get to a plan and then when we have a plan we can go to the right folks and see if we can get something done,” Kay said. “To be able to say on Dec. 4 this is going to happen sometime in 2014 is complete conjecture.”

In other news at the meeting:

* Through the first nine months of 2013, total handle at NYRA is down $34.2 million or 2 percent from last year. Ontrack handle is down $20.4 million or 4 percent from last year and attendance is also down 4 percent from last year.

* NYRA is looking to close the Aqueduct backside for stabling and training during some, it not all, of the period of time that the track is not racing, May through October.

* Trakus, the popular innovative racehorse tracking system, is scheduled to debut at Aqueduct next Wednesday, according to David O’Rourke, vice president of corporate development.