Officials and horsemen at Finger Lakes Gaming & Racetrack are livid over a 12% purse cut they say was necessitated by the ongoing financial difficulties of New York City Off-Track Betting Corp., the largest single bet-taker in the United States.
Finger Lakes officials said failure by NYCOTB to make statute-mandated payments of about $1 million the past three months forced the reduction in overnight stakes and elimination of four stakes.
“The unconscionable act of NYCOTB to refuse to pay its bankruptcy post-petition legislated payments has left a huge hole in our purse account going forward,” Finger Lakes president and general manager Chris Riegle said in a statement. “Given the current uncooperative attitude of NYCOTB, and with no apparent resolution on the horizon, we have no choice but to make drastic adjustments to the purse structure that in the end will negatively impact the industry and the tens of thousands of New York residents that depend on it for their livelihood.”
Other tracks, including those operated by the New York Racing Association, are owed millions more from NYCOTB, which late last year filed for Chapter 9 bankruptcy protection. The organization’s chairman, Meyer “Sandy” Frucher, resigned earlier in June.
David Brown, president of the Finger Lakes Horsemen’s Benevolent and Protective Association, blamed the situation on politics and mismanagement.
“(NYCOTB) has lost sight of the reasons for its very existence,” Brown said in a letter. “OTBs were created to provide tax revenue to local municipalities and support for the racing and breeding industry that once thrived in New York. Now a combination of corporate mismanagement and a lack of political will may leave this once great industry and the many jobs it supports in shambles.”
Brown said about $2 million was cut from purses effective June 14. The four $50,000 stakes that won’t be run this year are the July 4 Wadsworth Memorial Handicap, Oct. 2 Proud Puppy Handicap, Oct. 16 Finger Lakes Juvenile Fillies, and Oct. 30 Finger Lakes Juvenile.
Purses at the western New York track are supported by revenue from video lottery terminals. Purses at Finger Lakes have remained stable for years after an initial spike when the machines began operating in 2004.
Riegle said average daily purses will drop to $109,043 from $123,912. He said NYCOTB now owes Finger Lakes more than $3.6 in back payments.
“This marks the first time in over a decade that a purse cut has been necessary,” Riegle said. “It will not be the only cut this season if NYCOTB is allowed to continue to fund its daily bloated operations at the expense of the racing industry.”
New York government officials are working on ways to right NYCOTB, but horsemen said action is long overdue. “Albany has played political football with the breeding and racing industry, and in the end may leave it mortally wounded,” Brown said in his letter.
Finger Lakes offers live racing about 160 days each year from mid-April through early December. Racing is held five days a week.
A recent state audit of the five other OTB corporations in the state found the "current business model" doesn't work. The report suggested the state review "formulas used to calculate the corporations' up-front statutory and surchage payments."
A 2009 state audit of NYCOTB predicted "financial insolvency" for the corporation if changes in the OTB system weren't made.