After mailing out 180,000 vouchers to its fans, the New York Racing Association has scuttled its marketing tool known as the "mystery voucher'' program after state regulators ordered new safeguards implemented in the program.
The withdrawal came as the state Racing and Wagering Board this week quietly began issuing new guidelines designed to improve the security of the voucher programs. The board's move comes on the heels of a critical report by New York Attorney General Eliot Spitzer into NYRA's management and finances.
Among Spitzer's many findings of wrongdoing and what he said was a culture of criminality at NYRA was abuse by tellers of NYRA's mystery voucher program, in which vouchers are distributed to thousands of bettors that they can redeem – in amounts from $2 to $1,000 – at NYRA tracks. The current NYRA voucher program, which included a voucher worth $1 million sent somewhere in the country, until July 16 had been part of a marketing effort with the National Thoroughbred Racing Association.
"This is state Racing and Wagering Board harassment. Everyone is harassing us, so I guess they just jumped on the bandwagon as well,'' said an angry Barry Schwartz, NYRA's chairman.
Schwartz said the racing board "backed us into a corner'' because it sent its list of new conditions for approving the new voucher program after 180,000 vouchers were distributed by NYRA. "They're the ones killing it, not me. It was fine in the month of May and fine in the month of April. It's just not now,'' Schwartz said of the two previous voucher programs. "They know damn well the vouchers are out...Once again, it's the fans who suffer.''
NYRA expects about 30,000 fans would have redeemed the vouchers. "The impact is we're going to have 30,000 (angry) fans,'' he said. He said NYRA will offer free admission to those with the vouchers.
Racing board chairman Michael Hoblock said the decision to cancel the mystery voucher program was NYRA's, not the state. He said the agency has been looking at implementing new safeguards for the voucher program for more than a year to ensure the program is not being abused.
The racing board has begun distributing a new 12-point program to tighten up the way such marketing programs are run by tracks and off track betting parlors.
The board's new standards, obtained by the Blood-Horse
, call for a series of new safeguards in how the vouchers are distributed, including a ban on the placement of date or time stamps on the vouchers. In his investigation, Spitzer said such information was used by corrupt tellers to cheat customers out of their voucher prize money.
The racing board guidelines includes bans on racetrack employees participating in the voucher programs, improved recordkeeping of vouchers mailed out and returned to the tracks and better security systems for undeliverable vouchers sent through the mail.
Spitzer called the voucher program "another opportunity for teller fraud'' that, he said, NYRA management was unaware of and had "taken no steps to prevent it.'' He said the scams, including switching of $2 vouchers held by tellers for more lucrative ones turned in by fans, have been going on for years "and is well known to tellers in the mutuel department.''
Schwartz said NYRA expects to continue the voucher program in the future, but that it could not implement the changes the racing board wanted in time for its current mystery voucher program.
"They changed the conditions. They sent a long laundry list of information they needed to put us in compliance. And it was impossible to get out in this time frame,'' he said.
It is the second time racing regulators have ruled against a NYRA marketing program in the past month. In June, it scuttled a plan by NYRA to lower its takeout on many bets, a plan opposed by OTBs.