[JK – Full Disclosure: I have not been to a race at the thoroughbred track in over a decade. One does not have to be a fan of horse racing, however, to acknowledge the enormous importance our track has to the economic health of our city. Todd Shimkus’ piece in the Sunday Saratogian lays out the very real threat posed by Governor Cuomo’s handling of the New York Racing Association and the race tracks it has managed both upstate and downstate.]
Todd Shimkus Reader’s View: Concerned citizens lay out #Whoa Cuomo Fact Sheet
Posted: 10/02/16, 1:00 AM EDT |
What The Concerned Citizens for Saratoga Racing supports:
1. It’s long overdue for New York horse racing to be run again by a not-for-profit entity made up of people who are committed to the long-term success of horse racing in New York – individuals predominantly from the private sector who know racing and have devoted their lives to it.
2. The revenues legally owed to horse racing must go to horse racing. New York state must honor the existing court-approved Franchise Agreement.
3. Relying on a “temporary” Board of Directors and one-year extensions of state government control over NYRA creates uncertainty and has already done harm to investor confidence in the future of our state’s thoroughbred horse racing industry.
In 2008, the state of New York negotiated in good faith and approved a contract with NYRA that is like a mortgage on your home. The state of New York was given ownership over the land on which NYRA’s three tracks operate estimated to be worth $1 billion at that time and likely more today. In return, the state of New York agreed to share a fixed percentage of revenues from a new VLT at Aqueduct for 25 years to support our state’s thoroughbred horse racing industry.
The goal of this agreement was to use VLT revenues to preserve and enhance New York’s position as the premier racing circuit in the U.S. These VLT revenues were to be used explicitly for increasing purses, funding our state’s breeding programs as well as capital improvements and operations at all three of NYRA’s tracks. This franchise agreement was further approved by the federal courts allowing NYRA to exit from bankruptcy protection.
The revenue sharing resulting from this agreement is what has really improved our state’s thoroughbred horse racing industry. These revenues have allowed NYRA to increase purses to attract the best owners, horses, trainers and jockeys to race in New York. VLT revenues have made our state’s breeding program the envy of the U.S. This revenue sharing is what is enabling NYRA to be more successful and profitable. These monies have also made it possible for NYRA to make improvements to the housing for backstretch workers and to consider additional capital improvements at all three tracks.
Gov. Cuomo did not rescue NYRA from bankruptcy. NYRA was sent into bankruptcy by the state when the state refused to honor a contract with MGM to build a casino at Aqueduct Racetrack. NYRA exited bankruptcy in 2008, years before Andrew Cuomo became governor, when NYRA sold its land to the state in exchange for this 25-year franchise extension.
More recently, Gov. Cuomo again used a questionable tactic to force the NYRA board to accept a state takeover. The governor withheld VLT payments until NYRA was faced with bankruptcy – again caused by the state of New York. NYRA only acquiesced in this case because the Saratoga season was put in jeopardy.
The governor’s latest proposal will reduce future VLT payments to NYRA. His proposal will cap revenues from the VLTs, redirecting those funds to non-racing activities and altering the franchise agreement. This action will reduce monies available now and in the future for capital improvements and operations at all three tracks. Each and every effort to divert or cap or reduce funds legally owed to support horse racing represents a threat to the future of the Saratoga Race Course and our state’s thoroughbred horse racing industry.
Thanks, but no thanks
This governor needs to honor the existing franchise agreement. His office has asserted in media reports that their proposal “guarantees the Saratoga Race Course $16 million annually for capital improvements.” But what happens to the guarantees now included in the franchise agreement if the governor has his way and is allowed to alter the existing agreement? To make this latest guarantee, the governor must break another one. If we let them alter the franchise agreement today, what will stop this governor or the next one from further altering this new deal? The current agreement provides New York’s thoroughbred racing industry and all three tracks with funds sufficient to be successful in the short and long term.
How these funds should be spent and at which of the three tracks is also important. We are convinced that it is the responsibility of the NYRA Board of Directors to make these decisions. The NYRA board has a fiduciary duty to the racing industry to decide where and when capital funds should best be spent. Perhaps Saratoga needs $20 million one year or just $5 million another. Whatever the proper amount is, it should be decided on in the budgeting process of the NYRA Board of Directors and nowhere else.
No-show in Saratoga
Gov. Cuomo has been a no-show at the Saratoga Race Course since his election in 2011. We’ve now completed five 40-day race meets in Saratoga and the governor has still never toured the backstretch, visited a local breeding farm, met with local leaders nor watched a race at the oldest sport venue in the U.S. He turned down numerous invitations when our community celebrated the Saratoga 150, in 2013, and again this year.
You’d think that the governor would benefit from visiting Saratoga and talking with local stakeholders who have worked for decades to ensure Saratoga’s race meet is the best in the U.S. We’re sure that a dialogue with local leaders will help him to understand what really makes the Saratoga meet successful.
Unfortunately, the governor has not responded to any of these invites. At the same time, he has ignored the advice of his former special adviser, John Hendrickson, and even the counsel of close friends that he appointed to the NYRA board. It’s frankly difficult to imagine that he has or knows what is in Saratoga’s best interest since he’s never taken the time to visit or to chat with us to find out.
The 2016 State Budget included a provision – for which there was never a public hearing nor formal review by the Legislature – allowing Nassau County OTB to secure revenues from 1,000 new VLTs at the Aqueduct Casino. This action could result in a reduction of $25 million in revenues for New York’s thoroughbred horse racing industry. This action will damage our state’s thoroughbred horse racing industry, particularly by redirecting revenues away from horse racing and breeding to this financially troubled OTB.
This summer, we’re told the governor met with a select group of his appointees on the NYRA board. These discussions excluded NYRA’s CEO and our local legislators. The one NYRA board member from Saratoga Springs was not invited and no local stakeholders were asked to participate. There is no record of what was discussed nor is anyone who attended providing specifics about the deal. It’s a big secret. The only thing we know is that NYRA’s Chairman of the Board, Michael DelGuidice, said at NYRA’s most recent board meeting that he expects a deal to be in place by January.
We agree with the governor’s office that NYRA needs to be transparent and accountable. We think that should start today while the board is controlled by the governor. Private meetings between the governor and the men he has appointed to the current government-controlled board is neither transparent nor accountable. So if the performance standard by which we will judge NYRA should include transparency and accountability if it is private, we’d suggest it be so today when it is publicly controlled too.
Todd L. Shimkus, CCE, is president of the Saratoga County Chamber of Commerce