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Tuesday, May 1, 2012

NYRA Needs to Go

Since people are so focused on the Kentucky Derby, we may as well take a stroll on the wild side and talk about what is going on with the wonderful people at NYRA, the New York Racing Association.  Specifically, is there anything which will cause NYRA to lose their franchise to operate Aqueduct, Belmont, and Saratoga racetracks? 

Remember the accidental takeout mistake where NYRA was taking the incorrect takeout rate?  It turns out according to a NYSRWB interim report that it wasn't so accidental.  In fact, it allegedly was a deliberate attempt to increase the cash position of NYRA.  At this point, NYRA's CEO Charles Hayward and General Counsel Patrick Kehoe have been put on administrative leave without pay with regards to this scandal.  This alleged conspiracy not to charge the legal takeout rate cost bettors $8.5 million.  Those who have ADW accounts where the bets can be traced back will be credited but for those who don't have wagering accounts that played NYRA races for the fifteen months the takeout was incorrect are out of luck.  Sure they are now paying it back by temporarily reducing the takeout rate, but what if they never got caught?

Of course, the NYSRWB is not without blame.  Don't they audit the tracks to makes sure the current rates are being charged, especially for a franchise as troubled as NYRA?  After all, what are the NYSRWB people doing in the tote room?  A simple calculator could have detected the incorrect payments.

This is not the first time NYRA has run into problems.  Back in 2005, NYRA was rocked by a scandal where the Clerk of Scales at the time was not reporting overweights.  In 2003, NYRA was indicted and then agreed to a deferred prosecution agreement on income tax invasion and money laundering charges.  Then of course, there is their bankruptcy and government bailouts.

It is clear NYRA is a dysfunctional organization.  The time has come for the NYSRWB to revoke the license of NYRA to operate the race meets and the state should either find a new operator or privatize operation of the three tracks which comprise NYRA.  Of course, the question is will they?  If the allegation in the interim report are true, NYRA stole from gamblers, plain and simple.  To allow NYRA to maintain operation of the racetracks operated by them would be the ultimate in disregard for the gambler and will show that the NYSRWB could care less about horseplayers.

This case also shows the problem of states owning.  Does anyone think the NYSRWB would have accepted such a track record from Finger Lakes ownership?  If something similar happened at Finger Lakes or any other privately operated track in New York, the license to operate a race meet would have been revoked and the racing commission would have stepped in until the track operator was able to sell the track.  Clearly you can't adequately regulate an organization the state has a vested interest in.

NYRA and the NYSRWB are both in the spotlight.  Let's see what happens.

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