Ray Paulick<br>Editor-in-Chief

Ray Paulick

Year Book

Officials with the New York Racing Association may remember 2003 as the year things went haywire because of the actions of some dishonest pari-mutuel clerks and the inaction of a management team that knew more about issues on the backside of the racetrack than the front side.

It's hard to believe, but a crusading attorney general, armed with evidence of income tax evasion by the clerks and dishonesty by a few others employed by NYRA, nearly caused the revocation of the association's franchise to operate Belmont Park, Saratoga, and Aqueduct. A federal investigation that led to an indictment of NYRA jeopardized installation of video lottery terminals at Aqueduct, something that would have cost the state, NYRA, and New York horsemen millions of dollars. The deal cut with the feds was a costly one, but it permitted NYRA to keep its franchise and put VLTs back on the front burner.

Let's hope the ordeal is over so NYRA's management team can get back to running this nation's most important year-round racing program--one that will benefit from VLT revenue but still has serious challenges regarding on-track attendance and handle during the Belmont Park spring and fall meetings. Let's also hope NYRA and other racetrack operators have learned something from this investigation: namely, that fraud is fraud.

How many racetrack executives look the other way on legal or tax issues as some NYRA managers apparently did when the mutuel clerks ran their scam? For example, nearly every racetrack has a handful of 10 percenters--people who will stand in for others at the Internal Revenue Service window when a large winning ticket requires federal withholding tax. Many track operators are aware of this illegal practice and do nothing to discourage it. That makes them an accessory to a crime the federal government takes very seriously.


Thoroughbred breeders will remember 2003 as a year of resilience, when a down market could have steamrolled many in Kentucky as a result of the 20% decline in the state's foal crop in 2002 due to mare reproductive loss syndrome. Credit the new tax breaks passed by Congress, a turnaround in the general economy, or optimism about the future of the racing industry in key markets. The upswing in prices was welcome, and a lifesaver for many.

Optimism about the future of racing? Late in the year, there were purse cuts at several major tracks, including Hollywood Park and Santa Anita Park in California. Spiraling costs for workers' compensation forced owners and trainers out of state or out of business.

Nationally, purses have stagnated as simulcasting growth has slowed and the revenue pie is sliced into more and more pieces. As a result, leaner slices are left on the table for horsemen, and purses suffer, unless tracks are able to supplement them with revenue from slot machines.

Texas and Oklahoma, two relatively new racing markets that opened with great promise, are struggling. Remington Park in Oklahoma City had some swagger when it opened in the late 1980s, but that is long gone, as are most of its patrons from those early years. The situation in Texas is not as dire, but a purse cut at Lone Star Park near Dallas is not a healthy sign. Tracks in bordering Louisiana and New Mexico are rich with slot machine revenue and racing in those states will be tempting for Texas owners, breeders, and trainers, especially if more purse cuts ensue.

But hope springs eternal. California politics went from term limits to Terminator with the gubernatorial election of Arnold Schwarzenegger. Maybe the Hollywood tough guy can clean up the mess left by others. Texans have a Breeders' Cup World Thoroughbred Championships to look forward to when Lone Star Park hosts the event next year. And Oklahomans? For now, they have a decent college football team to support.