John Sabini

John Sabini

Courtesy NYSRWB

Sabini Stepping Down as Chief NY Regulator

Departure comes as state prepares to establish giant agency to oversee gambling.

New York's chief regulator of the racing industry is stepping down Jan. 11, just weeks before a new uber-agency to oversee all gambling related activities in the state comes to life.

John Sabini, a former Democratic state senator from Queens, informed employees Jan. 9 that he will be leaving his job as chairman of the state Racing and Wagering Board.

"I think it's time to move on,'' Sabini said in an interview with The Blood-Horse.

The board chairman said the Cuomo administration discussed other possible jobs in the state, but that he has decided to, at age 56, retire from government service and go back into lobbying. He said he plans to lobby in Albany and New York City but is banned, under state ethics rules, from discussing possible job opportunities, and said he is prohibited from representing any licensee of his agency for two years.

"I've had a long run for a chairman of the Racing and Wagering Board. Not many of my predecessors survived this long,'' Sabini said. He said he still wants to earn a living and that the $300 per diemwhich industry insiders have said might amount to only $600 or so a monthwas not enough for him to stay.

He is leaving the racing board position that pays him $120,800 a year before the new New York Gaming Commission is activated Feb. 1. Instead of a full-time board, the new agency will have a five-member panel whose members will be paid $300 a day during board work periods.

Sabini, appointed chairman of the racing board in 2008 by former Gov. David Paterson, ran the agency during a busy period. The board launched a number of high-profile cases, including its 10-year revocation of trainer Rick Dutrow's license, a move upheld again this week by the state's highest court.

He also bolstered a number of drug rules, making New York arguably one of the toughest equine drug testing states in the nation. Sabini increased transparency of public information about drugs administered to race horses, and created a database on the agency's website that provides information about any injury or death suffered by a racehorse.

The agency came under some criticism when it did not immediately catch that the New York Racing Association failed to comply with state law in dropping takeout rates on exotic bets; that scandal, which cost bettors millions of dollars and led to the firing of former NYRA President Charles Hayward, was picked up by auditors for state Comptroller Thomas DiNapoli.

The Sabini era also included probes of NYRA following a rash of equine deaths last winter at Aqueduct Racetrack. Sabini also got tracks and off-track betting parlors together after the closure of New York City Off-Track Betting Corp. to strike a video streaming agreement. And he was instrumental in pressing for a new track surface at Finger Lakes racetrack.

But Sabini's job was effectively on borrowed time since Gov. Andrew Cuomo last year pushed through the creation of a new agency to oversee all aspects of the state's gambling industry, including racetracks and their VLT parlors, Indian casinos, lottery games, and charitable gambling operations.

The New York Gaming Commission was to have been activated last year, but was delayed in finding new board members given the relatively low pay and new requirements needed to serve. The new board's members, who have not yet been named by Cuomo, must have experience in one or more of the areas of accounting and auditing, corporate finance, racing and gambling, or law enforcement or law. They must be New York state residents, and the governor would have the power to remove board members for "inefficiency, neglect of duty or misconduct in office."

The powers of the agency will include conducting background checks of gambling industry employees, overseeing drug tests of horses, and operations of off-track betting corporations. Should a racetrack casino discontinue operations, the new commission could step in and run the facility or appoint a contractor.

Those barred from serving on the commission board include anyone who, during the past three years, had any direct or indirect ties to the gambling industry in New York. They would also be barred from working for any company regulated by the commission for a period of four years after leaving the board.

Sabini said he was especially proud of the deal he helped broker to stream NYRA races after NYCOTB shut down, a period when tracks and OTBs were looking at a 45% handle hit with the closure of the nation's largest OTB corporation. He said the deal, which brought industry players together who have traditionally little patience for working out agreements, ended up avoiding an "equine fiscal cliff.''

"We said, 'gentlemen, this is serious,''' Sabini recalled of the session after NYCOTB shut down in late 2010 while operating under bankruptcy court protection.

"Had we not done it things could have spun out of control quickly,'' he said of the fiscal hit NYCOTB closure would have had on the industry without the video streaming deal and other provisions to help tracks and other OTBs make up for some of the betting loss by the NYCOTB shutdown.

Sabini said he is also proud of cost-cutting efforts the agency undertook, including staffing cutbacks and moving the equine drug testing lab from Cornell University to a state university facility, and for increasing the number of women and minority staffers at the regulatory agency.

"And we've been very tough on drug offenders,'' he said.

As for the industry's future, he said racing is "clearly trending downward.'' And he said industry executives have been too "stubborn about reaching out to fans as they should.'' But, he added, "Some are starting to realize they have to change that attitude.''