Updated on 01/18/2017 6:09PM

State budget proposal would give NYRA control of its own board

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The New York Racing Association would be able to appoint the majority of its board members under a proposal submitted to the legislature late Tuesday night by Gov. Andrew Cuomo.

The proposal, which is contained in Cuomo’s 2017 state budget, would allow NYRA to select eight members to a reconstituted 15-member board, with six members selected by the governor. The association’s chief executive would fill the final spot.

If approved, the plan would restore control of the NYRA board to the association five years after Cuomo pushed through legislation that gave the state the right to appoint the majority of the members to a 17-seat board. State control of the board was set to expire in 2015, but Cuomo has backed two separate one-year extensions, to the consternation of many supporters of NYRA.

Under the proposal, Cuomo would have the power to appoint the first chairman of the reconstituted board to a three-year term. Two nonvoting seats would also be reserved for representatives of the state’s horsemen’s and breeders’ group, as is the case with the current board.

The proposal was released hours after the New York Senate Racing, Gaming, and Wagering Committee held a hearing at which racing-industry representatives and members of the Saratoga Springs business community urged legislators to return control of the board to NYRA. The representatives said that the delay had hampered the racing industry’s ability to plan for the long-term future and had the potential to harm Saratoga Springs, where NYRA’s Saratoga Race Course generates significant revenue for the community’s hotels, restaurants, rental properties, and other businesses.

In addition to Saratoga, NYRA operates Aqueduct racetrack in Queens and Belmont Park on Long Island. Under an agreement negotiated in 2008, when NYRA was in bankruptcy, the state took ownership of NYRA’s racetracks, and scuffles with the state over the proper management of the tracks has surrounded the association for years.

In a statement mirroring written testimony submitted to the Senate committee, NYRA CEO Chris Kay said the budget proposal was “the result of productive dialogue with the governor’s office for the last several months,” indicating that the association backs the plan. Kay was hired in 2013.

“We look forward to working with the legislature and all stakeholders in efforts to pass the executive’s proposal,” the statement said.

The budget proposal expands the powers of a Franchise Oversight Board created in 2008, when the state took ownership of the tracks, allowing the board to suspend NYRA’s receipt of subsidies from a casino at Aqueduct if the board determines that NYRA “has experienced two consecutive years of material losses due to circumstances within the control of the franchised corporation.” NYRA’s use of the subsidies to determine whether the association has been operating at a profit has been a subject of dispute for the past several years.

At the hearing on Tuesday, multiple racing representatives were sharply critical of a maneuver last year by the operator of the Aqueduct casino to designate 460 slot machines on its casino floor to a 1,000-machine allotment provided by the legislature to Nassau Off-Track Betting Corp., a decision that the racing officials said will cost the racing industry $20 million annually in subsidies that currently go to purses, breeding awards, and NYRA’s capital-improvements and operating funds. The budget proposal does not address that maneuver, which several legislators have criticized and pledged to address during this year’s legislative session.

The proposal would also allow NYRA to race at night at Belmont Park. Under current statutes, Thoroughbred racetracks have restricted operating hours, protecting the state’s harness tracks, which typically race at night. NYRA could also reduce the number of winter racing dates it conducts at Aqueduct.

A separate proposal in the budget would shift the costs of drug testing in the state from the New York State Gaming Commission to horsemen and racetracks, though the budget language does not contain specifics. Rick Violette, the president of the New York Thoroughbred Horsemen’s Association, said the current budget for drug testing in the state is $4 million annually, and that the proposal would “require a discussion about the equitable share of the costs” that would be borne by the Thoroughbred and Standardbred industries in the state before horsemen would be able to decide whether to support the plan.

NYRA has a franchise to operate the three tracks that expires in 2033 unless the agreement is terminated by the state.

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