NYRA Board Meets; Still No Action on CEO

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by Teresa Genaro

New York Racing Association board chairman David Skorton said April 29 he would be "less than happy" if a new chief executive officer had not been named by June 8, day of the Belmont Stakes (gr. I). When a June 10 board meeting was announced in the run-up to the Belmont, rumors circulated broadly that the name of the new executive would be announced.

But while the matter of the CEO was discussed in executive session, the June 10 meeting was adjourned with no announcement made and no update given. Skorton did say he expects a CEO to be named "very, very, very soon," and that he hoped an announcement would be made within days, not weeks.

While NYRA board meetings are open to the public under the state's open meetings law, employment and legal matters are discussed in closed session; Skorton declined to reveal what was discussed regarding the CEO search. Following the meeting, he acknowledged that a short list of names existed, and that an announcement could be made without a meeting of the full board.

Arguably little was accomplished at the meeting beyond a decision to review the contention by the state Franchise Oversight Board that NYRA did not follow its own procurement procedures in naming Global Betting Exchange as the provider of its advance deposit wagering system, NYRA Rewards.

David O'Rourke, one of three NYRA interim managers named at April's board meeting, requested to re-bid the contract–a process he estimated would take 90 days–to allow the new platform to be operational in the first quarter of 2014. That time frame is crucial, he said, because the bulk of new online wagering accounts are opened in the lead-up to the Kentucky Derby Presented by Yum! Brands (gr. I) in early May.

According to a NYRA spokesperson, O'Rourke made the request to re-bid in order to ensure that NYRA's procurement protocols were followed and that the best operator for ADW is chosen. During the initial process in 2013, seven bids were submitted, with each ultimately removed from consideration.

Following that process, NYRA entered into discussions with GBE, which was later approved as sole-source contractor.

Though John Hendrickson, special adviser to the NYRA board, noted "we're all government here," the discussion about GBE revealed a fractious relationship between the board and current and former representatives of state government. Former Franchise Oversight Board chair Robert Megna, now a NYRA board member, raised serious questions about the procurement process; he was supported by Bennett Liebman, Gov. Andrew Cuomo's deputy secretary for gaming and racing.

The GBE matter has been a topic of discussion at recent board meetings, and several board members expressed surprise that reservations about the approval were only being raised now; Liebman said at least some of the objections had been made in writing to "former NYRA management" in February. He declined to be specific about to whom the complaints had been made, though he did say Skorton had asked former NYRA president Ellen McClain to meet with the Franchise Oversight Board.

Liebman agreed to present in writing the oversight board's objections to the GBE contract, which will be reviewed by Joseph Spinelli of the NYRA board's Audit and Compliance Committee and Stuart Subotnick of the Finance Committee. They were involved in the original bidding process.

If they determine the proper procedures had been abrogated, the contract will be re-bid. If they disagree with the Franchise Oversight Board's objections, Skorton will discuss with Liebman, Megna, Subotnick, and Spinelli the next steps in the process of naming an ADW provider.

The frustration expressed by various board members and government representatives verged on acrimonious and at times suggested a continued lack of trust between the members of the racing organization and New York State government. Hendrickson characterized the situation as "embarrassing."

Other matters discussed at the meeting were the organization's first-quarter financials, including an increase in average daily pari-mutuel handle with fewer racing days; and an increase in video lottery terminal revenue at the Aqueduct Racetrack over last year. O'Rourke also announced NYRA will request approval from the New YorkGaming Commission to offer a low takeout Pick 5.

Interim NYRA manager Glenn Kozak reported that Trakus will be installed at Belmont Park and Aqueduct in time for the next meets at both racetracks, and that "Longshots," the simulcast facility at Aqueduct, is scheduled to open this fall.