NYRA Bailout Tied to Hike in Takeout Rate
Updated: Thursday, January 19, 2006 10:40 PM
Posted: Thursday, January 19, 2006 3:54 PM
The New York Racing Association will have to raise pari-mutuel takeout if it is to obtain a $20-million loan from the state of New York, according to language buried in state budget bills introduced the week of Jan. 16.
NYRA, which for years has fought against off-track betting corporations and others that want it to increase takeout, would have to boost takeout by at least 1%, according to legislation submitted by Gov. George Pataki. The bill states NYRA must, "on an expedited basis," apply to the New York State Racing and Wagering Board to change the takeout.
But NYRA president Charles Hayward insisted any talks with state officials about raising takeout has been linked to racing board approval of NYRA's longstanding request that it be allowed to introduce a bettors' rewards program.
"We would not agree to a takeout increase without that being coupled with a rewards program," Hayward said.
The legislation that would give NYRA the $20 million it needs to keep its operations going, however, states nothing about a rewards program. The $20 million is part of an overall $30-million bailout package state officials approved in December. The new legislation states the terms of the largest part of that package.
NYRA now has three takeout tiers. Its takeout on win, place, and show bets, at 14%, is the lowest in the country. Hayward said his talks with a new state panel overseeing NYRA finances have only focused on raising the win, place, and show takeout, not other takeout rates for two-horse bets and exotics like the pick four.
NYRA last year submitted, along with two OTB corporations, an application with the racing board to begin a rewards program that would give out percentage awards to bettors who make at least $2,000 a month in bets. It would give its most lucrative rewards to bettors who make more than $500,000 a month in wagers. Hayward said it was his understanding the oversight board would help NYRA convince the racing board to approve the rewards program.
The $20 million, which NYRA would pay back with interest from revenue from a soon-to-be-built video lottery terminal casino at Aqueduct, comes with other conditions, according to the governor's budget legislation. NYRA must "diligently explore" selling its interest in Equibase, the data collection company, though Hayward said he plans to try to convince state officials such a sale wouldn't be in the best long-term interest of NYRA or whoever holds the racing franchise for Aqueduct, Belmont Park, and Saratoga after NYRA's term ends Dec. 31, 2007.
Other conditions for the money call for NYRA to come up with a plan to cut expenses, provide a cash-management plan to the state by the end of the month, possibly renegotiate simulcast contracts, and permit "real time" delivery of financial information about its operations to the state oversight board. The legislation says an auditor will be on site at NYRA facilities reporting to the state oversight panel.
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