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Mike BarryEye on the Island

By Mike Barry
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Stakes Held Hostage

The New York Racing Association’s (NYRA) president and CEO, Charles Hayward, hinted publicly last month that NYRA might not have the resources to host the Belmont Stakes on Saturday, June 5, 2010.

I knew immediately that NYRA’s Hayward would pay a high political price for his statement. Albany’s decision makers are the ones who make veiled threats. They are unaccustomed to receiving them, which made the bipartisan beat-down NYRA received a sight to behold.

The back story: the state Legislature authorized in 2001 the installation of video lottery terminals (VLTs) at Aqueduct Racetrack in Ozone Park, one of the three thoroughbred race tracks NYRA runs under a franchise agreement with the state. The others are Belmont Park and Saratoga Race Course. Despite receiving bids from qualified vendors with experience running so-called racinos, no company has been selected to establish VLTs at Aqueduct, thereby depriving NYRA of substantial revenues. Recognizing NYRA was suffering in part because of Albany’s inability to award an Aqueduct VLT contract, the state allocated $30 million to NYRA in 2008, the same year its franchise was renewed for 25-years.

“NYRA operates without a single penny of taxpayer subsidy,” the opening paragraph of a Dec. 28, 2009 NYRA statement said. “The revenue NYRA received as a result of the franchise renewal in 2008 was consideration paid to NYRA by the State in exchange for over $1 billion worth of real estate. The franchise renewal was not a “bailout” of NYRA. Moreover, the State agreed in the franchise Agreement that NYRA would need additional revenue if VLTs failed to be operational by April of 2009. NYRA’s current financial situation is not a surprise to anyone in state government who is familiar with the NYRA franchise agreements.”

Yeah, that final, condescending sentence was a nice touch, NYRA. The $1 billion real estate figure cited above might be challenged by anyone familiar with NYRA’s franchise agreement because it seemingly arises from NYRA giving up its disputed ownership claims to the Aqueduct, Belmont and Saratoga properties.

In addition, Hayward miscalculated terribly if he thought raising the specter of canceling one of New York’s premier sporting events would have repercussions limited to Aqueduct’s VLTs as the 2010 state election season gets under way.

State comptroller Thomas DiNapoli, a Democrat who represented northern Nassau County in the state Assembly for 20 years, was the first to jump on Hayward, followed by Hudson Valley state Senator John Bonacic (R-Mt. Hope), the ranking GOP member on the state Senate’s Committee on Racing, Wagering and Gaming.

Comptroller DiNapoli announced his office would audit NYRA’s books to see if Hayward’s assertions about NYRA’s dire fiscal situation were accurate. NYRA initially rebuffed the comptroller’s request, saying they were exempt from such a review, a stance NYRA quickly dropped after DiNapoli issued subpoenas. Senator Bonacic also had an intriguing reaction to Hayward’s statement, according to an Albany Times-Union article. If NYRA isn’t going to have enough money to operate Belmont’s spring 2010 racing season, the Senator said, why is NYRA collecting money already for season tickets to the summer 2010 meet in Saratoga? The public is about to find out the answer to that question.

Mike Barry, a corporate communications consultant, has worked in government and journalism.

Mike Barry, a corporate communications consultant, has worked in government and journalism. Email: MFBARRY@optonline.net