New York State Comptroller promises more looks at NYRA’s books
Published: Wednesday, July 20, 2011
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By PAUL POST, ppost@saratogian.com
SARATOGA SPRINGS — The state comptroller intends to look, with some skepticism, at the New York Racing Association’s books to see what it’s doing to get out of the red.
“NYRA has a history of overspending,” Thomas P. DiNapoli said in a press release Wednesday. “I want to ensure that this is one tradition that doesn’t continue.”
DiNapoli’s review will examine NYRA’s response to two earlier comptroller audits, which called for significant cost reductions, including salaries and consultant fees. NYRA hasn’t posted a profit since 2000, reported a $17 million operating loss last year and projects an $11 million loss this year.
In June, state Budget Director Robert Megna asked NYRA for a long-term business plan, which NYRA said it cannot provide until after the six-week Saratoga Race Course meet that begins Friday. NYRA says it needs to see how Aqueduct’s new casino, scheduled to open in early October, actually performs before making long-term financial projections.
Megna also chairs the state Franchise Oversight Board and recently criticized a nearly 8 percent spending increase in NYRA’s $141 million budget. The budget included a more than 5 percent hike in salaries, with some executives making between $255,000 and $460,000. Megna also questioned the firm’s ability to get back in the black.
However, NYRA on Wednesday announced positive results from the recently concluded spring-summer Belmont Park meet. Attendance was up 14.4 percent over last year, total on-track handle (including money bet on simulcast races) was up 72 percent — increasing to $141 million from $82 million — and total all-sources handle (including money bet on simulcast races) was up 1.2 percent, increasing to $579 million from $572 million.
Also, NYRA Rewards telephone wagering was up 146 percent, increasing to $13 million from $5.4 million, and NYRA Rewards internet wagering was up 231 percent, increasing to $22 million from $6.5 million.
NYRA is three years into a 25-year contract with the state to operate Saratoga Race Course, Belmont Park and Aqueduct. The racetrack operator is currently operating with a
$25 million loan from Genting New York LLC, the casino’s operator. The first 2,500 gaming machines are slated to open around Oct. 1, with the rest coming on line before the end of this year.
One June 21, Megna asked NYRA to submit a plan to bring racing operations into long-term solvency. “We are working on a five-year plan which will not be final until the fall, as we need firm numbers on VLTs so we can better gauge how long it will take to pay back the $25 million loan from Genting,” NYRA spokesman Dan Silver said.
In addition, New York City Off Track Betting, which closed last Dec. 8, accounted for 18 percent of NYRA’s revenue stream.
“We’ve made some of that up, a significant amount, by our on-track business,” NYRA President Charles Hayward said. “But we need to work on, and we are working on a strategy to get back in the city and that relies on some approvals from the state and city government. So we’re moving that forward, but we can’t get that five-year plan done until we have some certainty about revenues from VLTs and some clarity about New York City OTB.”
Benefits represent one of NYRA’s largest spending increases — roughly
$4 million (27.2 percent) — from $15 million in 2010 to $19.1 million this year. “Several factors contribute to this increase, including a 36.7 percent increase in health care due to rising health care costs and a significant spike in claims correlated with WARN Act notices issued in May 2010,” NYRA’s budget said. NYRA sent out the notices last year, a requirement having to do with potential layoffs, when faced with a possible racing shutdown.
Salaries are NYRA’s singe largest expense, $59.2 million, and have gone up 5.2 percent (roughly $3 million) from last year’s $56.3 million. Of this, NYRA has had to pay an extra $1.4 million for additional pari-mutuel and television staffing to handle increased business activity when NYC OTB closed.
NYRA expects to save $500,000 by hiring 900 temporary workers during the Saratoga meet compared to 1,100 last year.
