Panel Ready to Investigate NYRA

Megna concerned about NYRA's ability to bring racing operations into the black

A day after citing concerns about a lack of fiscal transparency, a New York state panel has called for an investigation of the New York Racing Association.

Robert Megna, who is the budget director for New York Gov. Andrew M. Cuomo and chairman of the Franchise Oversight Board, released a stinging letter to NYRA President Charles Hayward saying that the lack of cooperation with state officials looking into the racing group’s finances “will be treated with the utmost seriousness.”

The June 21 letter came a day after NYRA officials declined to provide detailed information on a number of fronts, including management raises and an out-of-state simulcasting contract with a Churchill Downs-owned entity.

“I continue to have substantial concerns about NYRA’s ability to bring racing operations into the black,” Megna said in a letter to Hayward.

Hayward declined comment, saying he had not yet received the letter from Megna.

The state Inspector General’s office, which has far-reaching investigatory powers, will be looking into the concerns by Megna.

Megna, who also expressed his “disappointment” with Hayward’s failure to personally appear before the fiscal oversight panel this week, said he has forwarded his concerns to the inspector general “for appropriate examination of NYRA’s operation.”

Megna noted that the NYRA meeting this week had already been rescheduled to take into account NYRA's schedule. Franchise board members openly grumbled about Hayward's failure to personally appear. “Being the body that is statutorily authorized to oversee your organization's operations, we trust that in the future you will make yourself available for questions,” Megna wrote Hayward.

The oversight panel, created to monitor NYRA’s finances, has limited fiscal authority over NYRA. Its members openly complained June 20 during a meeting with NYRA officials at the Capitol that annual budget information from NYRA is late and incomplete with details.

Megna complained that NYRA’s budget submission to the oversight panel included no information about management raises, even though its wages are projected to increase 5% this year. “Given current fiscal realities, and with NYRA projecting an $11 million deficit, the board believes that your actions in this area warrant justification,” Megna wrote Hayward.

Megna noted that NYRA’s overall handle on NYRA races is projected to drop 1.4% this year, with operating expenses rising 7%. “Even with VLT revenues beginning to flow, it is not clear after extrapolating current trends that racing operations are sustainable without significant restructuring,” Megna warned.

Megna called on NYRA to submit a long-term plan “to bring racing operations into long-term solvency.”

NYRA for decades has had a hot and cold relationship with state officials. Regulators have long complained of secrecy by the operator of Aqueduct, Belmont, and Saratoga racetracks.

The sharp criticism of NYRA, and calls for a formal state probe, come as efforts are stalled at the Capitol on a number of racing-related matters, including some lawmakers’ push to let off-track betting entities enter the New York City market to re-start parlor business shut off when the New York City Off-Track Betting Corp. closed late last year.

The call by Megna for an investigation also came the same day the Legislature gave final approal to a measure requiring betting call centers by New York racing groups to be located within New York state. The bill is in response to a decision by NYRA to award its call center business to Oregon-based, which is owned by Churchill Downs.

“Our state has invested a tremendous amount of money in NYRA over the years and it is ridiculous that the new jobs created by the call center contract will be going out-of-state instead of benefitting New Yorkers. This bill prevents such a decision from occurring in the future, so that the jobs these call centers generate will be kept in-state,'' said Sen. Andrew Lanza, a Staten Island Republican.