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Thursday, December 13, 2012
NYRA Board has first meeting

By Tom Precious
Brisnet

Members gather December 12, 2012 for the first-ever publicly-viewed meeting of the newly-constituted New York Racing Association re-organization board in New York City.
Members gather for the first-ever publicly-viewed meeting of the NYRA re-organization board.


A new state-controlled board of directors at the New York Racing Association held its first meeting Dec. 12, bringing the long-embattled racetrack operator to a new and uncertain place in its history that dates back to 1955.

"I hereby call our first meeting to order,'' said David Skorton, the new NYRA chairman who is also president of Cornell University. He vowed to bring a new level of transparency to NYRA board meetings not seen in the decades under previous control.

As state officials talked of the "New NYRA,'' Skorton made his comments before a panel that also includes a number of holdover members from the previous board, including Steve Duncker, who until recently held Skorton's post, and Michael Del Giudice, the former vice chairman.

The state-controlled NYRA, authorized under legislation approved in June following a number of run-ins between NYRA and Gov. Andrew Cuomo, is set to be in existence for three years. During that time Cuomo has promised the state will be reexamining a broad array of issues facing the racing industry, including the structures of current off-track betting corporations and the possibility of new competition from casinos if a Cuomo-pushed gambling expansion is approved next year.

The board, in its first act, approved Cuomo's choice of Skorton to be the new NYRA chairman. It also backed a number of measures state officials hope will restore some of NYRA's public image problems, including a ban -- with some key loopholes -- on certain campaign contributions by board members and prohibitions on betting by NYRA corporate officers.

The donation ban applies money to statewide and legislative candidates, but it does not apply to local and state party organizations that funnel contributions to statewide and legislative candidates, or to super PACs that can help a statewide or legislative candidate. The board also abolished the New York Thoroughbred Racing Industry Political Action Committee, a vehicle used over the years by NYRA leaders to bundle campaign donations to New York politicians.

Also in attendance at the first board meeting was NYRA president Ellen McClain, who took over in the wake of this year's scandal in which NYRA failed to lower takeout levels, as required by law, on certain exotic bets, a move that cost bettors millions of dollars. The Cuomo administration has sent signals in some media outlets that it wants to replace McClain, who presented the board with a financial update of NYRA's track operations. She was praised, though, during the meeting by several board members for her job performance during another period of tumult at NYRA.

The Cuomo administration has floated various plans for NYRA properties, including a massive convention center and additional casino space at Aqueduct Racetrack and plans to sell or lease land now used for parking at Belmont Park. The governor has also suggested the idea of lowering revenue sharing money that the state's nine tracks now get from their racino operations and battled NYRA over everything from equine deaths last winter at Aqueduct to the takeout problem. Governors dating back to his father, Mario Cuomo, who was New York governor until 1995, have butted heads with NYRA over a host of political, legal, and financial disputes.

The new board puts the governor and his appointees essentially in charge of NYRA for three years.

The board, with several members that are new to racing, including Skorton, during the course of two-and-a-half hours heard the nitty-gritty details of running racetracks: from the financial health of NYRA to the "relentless management task,'' as McClain said, of running racing year-round, to complaints about dirty conditions at Aqueduct that officials blamed on Resorts World, the operators of the casino at Aqueduct.

The board was told, as previously disclosed to a Cuomo-run oversight panel last month, that NYRA's operating expenses were up 3.9% in the third quarter compared to a year ago, due mostly to the legal and settlement costs associated with the takeout scandal. Its net racing revenue totaled $59 million, up 7% from the third quarter of last year, and net VLT revenues totaled $12.3 million.

"It's good news,'' Skorton said of what he called the "upward trajectory" of the fiscal numbers.

But celebrity chef Bobby Flay, a Thoroughbred owner and member of the new board, said the fiscal numbers are "sugar coated'' by the VLT revenues generated since the Aqueduct casino opened last year.

Celebrity chef, thoroughbred owner, and newly elected board member Bobby Flay (right) chats with non-voting member John Hendrickson.
Bobby Flay (right) chats with non-voting member John Hendrickson. Rick Violette, president of the New York Thoroughbred Horsemen's Association, is near.
"These VLTs have bailed out NYRA … the racing is not great,'' Flay said, praising the horsemen and quality of horses but criticizing the condition of the NYRA tracks. "We don't have a product that the public wants to go see. So now we have the money and everybody is happy about it, but we need to build the infrastructure of the racing product."

Flay added, "NYRA has always been the leader of the industry. We've lost that.''

One of the governor's board appointees sought to allay any concerns about the state takeover of NYRA. "There is no question that the governor and the executive [branch] is committed to making this work,'' said Robert Megna, who is Cuomo's chief budget advisor and former chairman of a state panel that oversees NYRA's finances.

Skorton also told the board he was naming Dr. Michael Kotlikoff, a Cornell University dean and veterinarian, as an unpaid advisor to the board.

The board chairman also scuttled a plan to have only four board meetings next year, with the next one not until March. After the number of issues raised during the meeting, Skorton said he was "convinced we can't wait 12 weeks" until the next board meeting. He said he likely will call a meeting again in January.

Charles Wait, another holdover from the previous NYRA board, said 150 different events are being planned to celebrate the 150th anniversary this summer at Saratoga Race Course.

"It's probably going to be the biggest celebration Saratoga has ever had,'' said board member John Hendrickson.