No Approval Yet for NYRA Plan to Lower Takeout
Updated: Friday, June 27, 2003 10:22 AM
Posted: Wednesday, June 25, 2003 4:04 PM
The embattled New York Racing Association, currently fighting off blistering investigations by state authorities over its operations, discovered June 25 that nothing is a sure thing anymore.
What was originally thought to be a routine request by NYRA to lower its takeout was deferred June 25 by the New York State Racing and Wagering Board. State regulators said they have given NYRA, as well as the state's off-track betting corporations, until June 27 to provide financial details about the possible ramifications of the lower takeout.
"Nobody is able to answer the questions of how this will impact handle and how it would impact the distribution of revenues to municipalities by the OTBs," said Stacy Clifford, a racing board spokeswoman. "The board wants to see hard numbers, and they feel they didn't have enough information to make a real informed decision."
NYRA wants to lower the takeout on win, place, and show bets from 14% to 13%. The takeout on multiple bets, such as daily doubles, would go from 17.5% to 17%. It believes the lower takeouts will entice more betting and bring more revenue to both the track and OTB parlors.
But OTB corporations, upset that NYRA failed to negotiate in advance with them, said the lower takeout by NYRA will force them to lower their takeout, thereby reducing the revenues they are obligated to share with local governments across the state.
NYRA was hoping to get the takeout in place the week of June 30, in time for the end of the season at Belmont Park and for the entire Saratoga meet. Racing board officials said if the plan isn't approved by July 1, NYRA cannot lower the takeout until Oct. 1 because of provision in a new law that permits takeout to change only once per quarter.
NYRA jumped on a new law, approved in May, that basically deregulated--New York style--takeout decisions. Though tracks no longer have to go to the state legislature to lower takeout, a final OK is needed by the racing board.
An angry NYRA chairman, Barry Schwartz, lashed out at the decision to defer the takeout request. "We assumed this was a no-brainer,'' Schwartz said. He said the issue clearly shows that "OTBs don't understand the gambling business.''
Schwartz said the OTBs would automatically get a reduction in what they pay NYRA whenever the takeout is lowered by NYRA. He wondered why the state would delay the takeout reduction decision and possibly jeopardize it from kicking in for the lucrative Saratoga meet when it was the state itself that adopted the plan to let tracks more easily lower the takeout. He noted that handle increased in one year by $233 million the first time NYRA lowered the takeout in 2001.
"What more proof does the state need,'' he said.
Earlier this week, NYRA was busy promoting the takeout plan as a "win-win situation for all involved," according to a written statement by Schwartz. Since NYRA reduced its takeout in 2001, $72 million more has been returned to bettors in the form of winnings, NYRA said.
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