ALBANY, N.Y. — The New York Racing Association is facing financial insolvency next year unless the thoroughbred track operator cuts more spending and begins getting revenue from a casino at Aqueduct that doesn’t yet exist, according to an audit released Monday. New York Comptroller Thomas DiNapoli said he’s putting auditors on site to monitor the condition of NYRA, which operates...
ALBANY, N.Y. — The New York Racing Association is facing financial insolvency next year unless the thoroughbred track operator cuts more spending and begins getting revenue from a casino at Aqueduct that doesn’t yet exist, according to an audit released Monday.
New York Comptroller Thomas DiNapoli said he’s putting auditors on site to monitor the condition of NYRA, which operates the Belmont, Saratoga and Aqueduct tracks. NYRA went into bankruptcy, was bailed out by the state and still operates in the red. “NYRA is on very shaky financial ground,” DiNapoli said. “And there’s too much at stake to let NYRA continue its fiscal mismanagement.”
Auditors said interest in betting on horse racing has been declining — down 16.7 percent nationally over three years to $12.3 billion in 2009. Wagering on NYRA’s races fell 13.2 percent at the same time to $2.22 billion, making it more difficult to generate enough revenue to cover expenses. DiNapoli said he’s seen no indication that drop in interest is changing.
In response to the audit, association President Charles Hayward said NYRA has cut operating spending 2.2 percent since 2008, reducing purses for some races and laying off 12 professional staff. He said other steps are also being considered.
Hayward wrote that NYRA’s situation has been made worse because anticipated revenues haven’t materialized from video lottery terminals at Aqueduct, where a second round of bidding to operate the “racino” has one remaining candidate, and New York City Off-Track Betting defaulted on nearly $20 million it owed the association.
With budgeted operating expenses of about $146 million for this year, the association said it is required to conduct 246 racing days under its franchise agreement. That includes 120 days at Aqueduct, 90 at Belmont and 36 at Saratoga.
In response to specific criticisms, NYRA said $1 million it paid to media consultant GC Consulting last year included $874,000 that directly bought advertising, and the association will require better documentation on the value of media buys.
Auditors said 2010 payroll costs are budgeted at $69.2 million for 1,279 employees, up almost $2 million in two years and a few personnel, and both salaries and staffing should be examined. NYRA said it will prepare an analysis for each department. The report said NYRA is considering saving $4.7 million a year by closing Aqueduct’s training facility and back stretch security barn.
DiNapoli said NYRA could probably save about $300,000 of the $1.5 million it spends annually for its so-called integrity counsel. The firm Getnick & Getnick was hired after it was first appointed by a federal judge as court-appointed monitor to help NYRA avoid a federal indictment. He also questioned $900,000 spent to routinely transport horses among the tracks at no cost to owners and trainers.
DiNapoli declined to say whether he thinks the state should drop out of subsidizing horse racing altogether, but noted New York has a long history with racing, which employs many people. “It certainly would be a valid policy question for the Legislature,” he said.