NYRA falsely inflated 2014 Saratoga attendance by 174,000 – Updated

Posted by noonante on July 15, 2015
Posted in: Horse Racing, Political/Social commentary, Saratoga thoughts. Tagged: , . 1 Comment

The New York Racing Association claimed that the attendance for the 2014 Saratoga meet was 174,422 greater than it actually was.  This discrepancy is based on a comparison of NYRA’s announced attendance with the turnstile counts.

For 2014, NYRA promoted season passes in conjunction with a local retailer.  It sold 6,373 such passes when they announced the $50 clubhouse pass was sold out, and they would stop selling the $30 grandstand pass in 10 days.

After the meet began with actual attendance figures similar to those for the 2013 meet, it started adding the number of unused passes to the turnstile count on the seventh day of the meet.  On the preceding two days (Wednesday and Thursday of the first full week), attendance was below the comparable days in 2013.  With their new way of counting, NYRA announced Friday attendance of 22,425, even though only 17,506 actually showed up.

By comparing the actual turnstile counts with NYRA’s announced attendance, we come to that figure of 174,422.  The day-to-day comparisons are staggering.  On August 13, NYRA had to add in 6,258 unused passes so they would not have to announce actual attendance of 8,989  –  a number that is not even the worst one for last year.  That was the only day to break the 6,000 barrier, but on many other days the unused passes added to the attendance was in the high 5’s.

When Paul Post of The Saratogian caught on to NYRA’s duplicity, spokesperson John Durso offered the following explanation:  “This policy is not new and was in place last year.  It is also the same policy used by professional sports such as Major League Baseball and the NFL.”  Of course, neither part of that statement is true.  It was not even the policy in place for the first six days of the meet when reported attendance and the turnstile counts were identical.  And if you think the last part is true, go to Fenway Park or Giants Stadium and ask for the low-cost season pass that gives you admission to every game.  Be sure to not pay more than the 75 cents per day that the grandstand pass at Saratoga costs.

NYRA has also attempted to explain the padding of attendance by comparing figures from prior years when the turnstile accounts on the “giveaway” days was inflated by counting spinners  –  those who paid additional admissions to acquire more of the free stuff such as hats or umbrellas that the track was passing out.  The decision by NYRA to stop that practice was commendable.  But they are using that straw man  –  presumably constructed from the product of mucked all stalls  –  to justify both their new practice, or, as CEO Chris Kay is now saying, attendance is not important.

It is simple enough to compare the attendance on non-giveaway days  as a way of measuring changes year-to-year.  And this year, with a consistent policy on counting the attendance on the giveaway days, one can measure this year’s attendance with that of last year.  NYRA, however, has stopped releasing attendance figures.

NYRA thought attendance was an important metric at the conclusion of the 2014 Belmont meet when they touted the increase over the figure from 2013.  Kay, however, has come up with a much more reliable indicator of the health of the racing industry  –  at least in Saratoga.  That would be the increase in hotel room tax receipts.

If he had not actually said this in a piece published in The Saratogian, folks might think I was now the racing reporter for The Onion.  The NYRA CEO cites a report by the Saratoga County Industrial Development Agency for his data and, of course, attributes the increase to his leadership at NYRA.  He neglects to mention, however, that one reason for the increase in the tax receipts is that average room rates increased by ten per cent from 2012 to 2014.  Kay also cites the construction of new hotel rooms as a further indicator of his success, as if sensible business people will build a hotel for an increased demand for less than two months of the year.

If attendance figures are not really important, then why not publish the real numbers?  If they are important, of course, it is imperative that the actual numbers be announced.  What is not acceptable is propagating a falsehood that continues to undermine the credibility of New York racing.  There is much positive about the state of racing in New York, including the increasingly impressive figures for the New York-bred breeding program.  We can hope that, at some point, NYRA’s leadership realizes that their endless self-promotion at the expense of credibility works neither to their advantage nor that of New York racing.

UPDATE:  I missed a day in my calculations.  The inflated attendance is 179.345.

 

This NYRA can’t be trusted on track changes

Posted by noonante on June 29, 2015
Posted in: Horse Racing, Political/Social commentary, Politics, Saratoga thoughts. Tagged: , , , . 5 Comments

Monday is the deadline for commenting on the significant structural changes being proposed for Saratoga Race Course.  It has become clear that the current NYRA leadership, through a lethal combination of arrogance and obtuseness, cannot be trusted with the future of one of the nation’s most hallowed sporting venues.

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The deadline is occasioned by an environmental review process under a New York law known as SEQRA.  The NYRA web site has the complete description of the project that would make the following dramatic changes:

  • A permanent structure built on the other side of the horse path that runs next to the end of the current club house.  It would replace the tent and the temporary modular boxes that have been used in recent years.
  • A new picnic table area along Union Avenue, replacing the parking area now used by owners and trainers.
  • A “Top of the Stretch Club” to be built at the end of the grandstand, intended “to attract a younger crowd to the Race Course.”
  • Moving the jockey quarters from the administration building to the Paddock.

While there are a host of other changes  –  many of them necessary or desirable  –  these are the ones that would be most noticeable to the fan.

What is striking about the document called the Draft Generic Environmental Impact Statement  –  the SEQRA DGEIS, for those addicted to acronyms  –  is that it institutionalizes the separation of the well-off from the “commoner.”  Thus, the clubhouse extension would be a “high-end hospitality venue” with “higher-end amenities.”  Changes to the existing clubhouse would provide a “higher-end entertainment experience.”  Changes to the other end of the grandstand are designed to attract a “younger crowd to the Race Course by providing a more casual atmosphere.”  And, of course, the picnic table area is being moved farther away from the paddock, grandstand, horses, and those looking for that “high-end” experience.

This separation of the well-off from the unwashed masses is consistent with the philosophy of this NYRA Board, spearheaded by its leader CEO Chris Kay.  Last year’s modest admission and parking increases were controversial with the Board, although Kay ended up prevailing.  That paved the way this year for charging for the picnic tables near the paddock, as well as creating new areas in the Carousel for which NYRA is also charging a fee.

Kay and his “Chief Experience Officer” present these changes as a benefit to fans.  By paying to reserve a picnic table, you don’t have to wait for the gates to open and then race to secure a spot  –  a tradition that I never heard anyone complain about.  NYRA cancelled the Open House held on the Sunday before the meet begins.  It was a free event that drew thousands, including many families with young kids.  The Chief Experience Officer reportedly said that the local non-profits that benefited from this event complained that it was too much work for little gain.  I asked NYRA what non-profits had said they would not participate this year.  NYRA did not respond.

When Chris Kay announced his “Red Jacket” program that would honor Saratoga greats with a permanent plaque and, presumably, a red jacket, I thought it was hokey, but harmless.  It became not harmless, however, when Kay decided to cut down a half-dozen trees in the backyard to make way for the new structure now being built near the Carousel to house the “museum” for the red jacket recipients.

Since the DGEIS is intended as the blue print for changes to the Race Course, I went through it to see how Kay’s self-tribute was described.  It was not mentioned.  Even though the DGEIS identified certain “background projects” that did not have to be included  –  such as routine maintenance or repairs to existing projects  –  it did so anyway.  But Kay’s vanity project  –  kind of an over-sized Saratoga doll house  –  is neither listed as a new structure nor a routine event not subject to SEQRA.  I asked NYRA to explain this curious omission.  NYRA did not respond.

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What we have is a NYRA leadership that knows little about racing or the Saratoga experience that looks for every opportunity to gouge fans.  It has no accountability because of a Board of Directors that is impotent, and a communications strategy that simply ignores legitimate inquiries.  Chris Kay has referred to the red jacket program as a “new tradition.”  Because he thought of it, I guess that makes it more important than the traditions most people associate with Saratoga  –  the trees in the backyard, going to the paddock, interacting with the jockeys on their way to the paddock, the mingling of the rich and the “ordinary” fan, the morning rush to get a picnic table.

The NYRA “Reorganization” Board was intended as a temporary transition according to the law that created it and its author, Andrew Cuomo.  The law required them to propose changes that would restore New York’s premier racing to private control by April 18 of this year, with the new entity to assume control on October 18, 2015.  It was the sole responsibility of the new Board under the law.  They did nothing, and the law had to be extended for another year.  This is not a group that should be in charge of permanent changes to Saratoga.  One of the few actual things they have done in their almost three years of existence was approving a plaque honoring themselves.  They did it in their first months as a Board although I doubt anyone of them could actually identify a contribution they, as a Board, made to New York racing.

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At the last meeting of the Board, member Michael Dubb urged Kay to expedite the improvements to the dormitories used by stable help.  The dorms have been described as deplorable, and were one of the reasons used by Governor Cuomo to seize control of NYRA three years ago.

But Dubb would have been as productive baying at the moon.  The construction workers building Kay’s museum could, of course, have been working on the dorms.  But this leadership crew doesn’t care about backstretch workers or the fans.  They only care about self-aggrandizement and squeezing as much money as possible from New York’s racing fans.

Comments on the proposed changes in the DGEIS can be sent to carolyn.dunderdale@ogs.ny.gov

Can Saratoga tolerate any more NYRA “improvements?”

Posted by noonante on June 23, 2015
Posted in: Horse Racing, Political/Social commentary, Politics. Tagged: , , , , , . 6 Comments

The New York Racing Association held its annual pre-Saratoga press conference on Monday to highlight what it perceives to be the significant improvements it is bringing to this year’s meet.  The competition for what is the biggest outrage announced by CEO Chris Kay is expected to be intense.

  • Removing six large trees near the Carousel in order to build a museum.  The “museum” will house memorabilia of those honored as “Red Jacket” recipients, a Kay innovation supposedly to honor those who made a significant contribution to Saratoga, according to Mike Kane in TDN.com.  While one cannot criticize those selected  –  this year it is Mary Lou Whitney and Dinny Phipps  –  one suspects it is really a tribute to Chris Kay.
  • Eliminating the decades-long tradition of an open house, as well as the Wait Trials, on the Sunday before the meet opens.  It is an event that brought thousands to the track, many of whom were families with kids, and supported local non-profit organizations.  The kids got to wander around the track, go for pony rides, pet animals in a petting zoo, and eat all the junk kids love to eat at sporting venues.  According to Kay, he has a better idea  –  as he always does  –  of family fun days on Mondays.  Last year, this was a small area where dozens  –  not thousands  –  of kids could play in a bounce house and perhaps pet a pony.  NYRA’s other CEO  –  Chief Experience Officer Lynn LaRocca  –  said the event was a lot of work with little return for the non-profits, according to Teresa Genaro writing in BloodHorse.com.  In what appears to be a remarkable coincidence, it is also an event in which NYRA had not yet figured out a way to get its own taste.
  • Adding another 100 picnic tables in the backyard, in addition to the 100 added last year.  Oh, and NYRA will be charging for those 100  –  $40 on weekdays, $60 on weekends and $125 on Travers Day.  If you thought getting to the paddock was difficult last year, wait until you try to navigate among those who paid to be there.  The kids who loved getting an up-close look at horses?  They can come back on Monday’s family fun day.
  • Charging for tables in the lower level of the Carousel.  Kay is bringing “premium hospitality” to the area, removing the plastic rows of chairs to replace them with tables  –  for which, of course, you will have to pay:  $35 for a weekday table for four to $125 for a table of six on Travers Day.

I suppose none of this should come as a surprise  –  with the exception of removing six trees from an historic site that are as much a part of the Saratoga experience as enjoying a coffee at the rail in the morning.  CEO Kay revealed a great deal about his thinking in a piece in the Sunday Saratogian entitled “Numbers reflect a vibrant horse racing industry.”  According to Kay, Saratoga, “by all arguable metrics, is far more robust and sound today than at any time in recent memory.  This proposition is not based on opinion, but is rooted in fact.”  His facts are from “a recent independent economic impact study commissioned by the Saratoga County Industrial Development Agency.”

What numbers did he cite  –  attendance, handle, purse money?  Of course not, since those are “metrics” associated with horse racing.  His measure of vitality  –  and I am not making this up  –  are hotel room taxes.  In 2014, Saratoga Springs and County of Saratoga room occupancy taxes amounted to $536,475.  To put that number in perspective, it is less than the handle on a single race run at Belmont on Sunday.

In his Saratogian article, Kay points to the “remarkable progress in the past couple of years to strengthen our sport.”  That would be while Kay has been in charge.  But knowing his devotion to a proposition that is “not based on opinion, but is rooted in fact,” let’s return to what the Chairman of the IDA stated in his introduction to the report:

“Simply put, the VLT enhanced purse structure and breeders awards program has revitalized the industry and made the New York Breeding program the envy of the country.”

These would be the same VLT payments (Aqueduct’s Video Lottery Terminals) that NYRA tries to minimize in the interest of developing whatever accounting legerdemain they need to make the fatuous argument they operate at a profit.

The IDA Chairman further observed that NYRA “is mandated to submit a reorganization plan in 2015 which will hopefully return the operation of New York’s three primary racing facilities to the private sector.”  That plan was regularly cited by Chris Kay as one of his three primary goals last year.  It is also the only requirement of the 2012 legislation that established the NYRA reorganization Board.  Neither Kay nor the Board made any progress on this, and the law had to be extended for another year.

As a taxpayer, I am certainly grateful for the tax revenue provided by people staying in Saratoga hotels during racing season.  As a racing fan, breeder and owner, I am becoming increasingly concerned that this charlatan running New York’s premier racing is digging a big hole for the sport.

It’s not just cutting down the trees or eliminating events that Saratoga residents enjoy. It’s not just the failure to realize that getting families and kids to the track is a way of growing the sport.  It is that Kay clearly has no clue on what he is doing.  Yes, NYRA may bring in more money as a result of this year’s “improvements.”  But if the cost is racing’s seed corn, what have we gained other than a talking point for Chris Kay?

 

What is wrong with Cuomo?

Posted by noonante on June 9, 2015
Posted in: Political/Social commentary, Politics. Tagged: , , . Leave a comment

There is plenty to do in Albany these days with the legislative session about to end and major laws due to expire without some action.  Yet, Governor Andrew Cuomo thought the state’s interests would be best served by traveling to a maximum security prison on the Canadian border with a photographer in tow.

The prison, of course, is the Clinton Correctional Facility in Dannemora where two convicted murderers used power tools to cut through steel walls in their cells and then steel pipes to emerge from a manhole cover in the town.  That’s right, a maximum security prison where murderers were able to use power tools to cut through steel.

Cuomo has a history of being drawn to emergency situations like a moth to a flame  –  or Chuck Schumer to a TV camera.  In the case of a natural disaster such as a hurricane or a flood, that makes some sense.  Hopefully, this will not turn out to be a disaster, but the cause of this one is obvious mismanagement in a government agency for which one Andrew Cuomo is ultimately responsible.

Yet another unusual aspect of this is that it is the second time in recent days that Cuomo has been photographed in a jail.  Doesn’t he have any advisors with the temerity to suggest that such photo ops  –  with a federal prosecutor breathing down his neck  –  may not be the best idea?

The photographs taken by Cuomo’s camera crew are, indeed, interesting and have been relentlessly publicized by his office.  While it is refreshing that the “most transparent governor in history” is, for once, being transparent, his motivation for this latest stunt is not clear.  One suspects that the law enforcement officials responsible for catching the killers could do without the circus that necessarily accompanies a governor on a road show, particularly one who seems to require devoted attention.

Perhaps the least edifying sight of Andrew’s excellent adventure was the video of his taunting an inmate in his cell about whether he heard the noise from the power tools cutting through steel.  It is a question more appropriately asked of the people he pays to run a maximum security prison.

NYRA Chairman steps down – what is next?

Posted by noonante on June 4, 2015
Posted in: Horse Racing, Political/Social commentary, Politics. Tagged: , , , , . 3 Comments

Anthony Bonomo, Governor Cuomo’s selection for Chairman of the Reorganization Board of the New York Racing Association, has now been forced to step aside, less than two months into his tenure.  It follows his being linked to the indictment last Thursday of Senator Dean Skelos and his son Adam.  Bonomo was neither charged in the indictment nor identified by name.  It is now fairly clear, however, that it was his company, a medical malpractice insurer, that allegedly provided over $100,000 in salary and benefits to Adam Skelos in a no-show job scheme.  The indictment alleges the payments were made while the insurer had matters pending in the state legislature.

To put this matter in context, when the United States Attorney released a criminal complaint to show probable cause for arresting Senator Skelos and his son a month ago, it characterized the provision of a different no-show job for Adam Skelos as bribery.  I will emphasize again that neither Bonomo nor the company he heads has been identified or charged.

The allegations appear to be the closest connection to actual corruption against an official of the Cuomo Administration, and from someone who was a major contributor to the Governor’s political operation.  It may be the height of irony that rooting out corruption in the prior NYRA was an ostensible reason for Cuomo’s seizing control of the group three years ago.  While there was never any actual corruption by the prior officials, the Cuomo appointees took every opportunity to highlight their restoration of integrity to an entity that, in reality, did not lack it.

This remarkable development does, however, present an opportunity for New York to embark on a path to truly restore NYRA to the leadership role it once occupied in the thoroughbred industry.  Bonomo’s leave of absence from the Reorganization Board means that a body established by law to have 17 voting members is now down to 13, following the failure of the Governor, the Assembly leadership and the old NYRA to replace three prior members who had resigned.  It is a chance to appoint recognized industry leaders, thereby putting the “new” NYRA on a path to fulfill their sole responsibility under the law  –  restoring the New York Racing Association to private control.

The law written by Cuomo officials that took over NYRA required the newly constituted Reorganization Board to present a plan by last April to return government-control of racing back to private hands by October 18, 2015.  Even though this was the only obligation of the new Board under the law, they did not accomplish it.  So, this year’s budget extended both deadlines for an additional year.

I think there is a legitimate question as to whether this group has any intention of relinquishing control.  Prior Board Chairman David Skorton let it slip that the next group to run New York racing would be “hopefully us.”  Anthony Bonomo, in an interview with Bob Ehalt published in Thoroughbred Racing Commentary said in reference to the extension:  “I don’t think it mattered.  A lot is made of that, but at the end of the day we have to focus on racing, not who is controlling it.”

Bonomo’s alleged involvement in the Skelos indictments has nothing to do with his chairmanship of the NYRA Board.  What it does do, however, is further the public perception that New York’s  government is a fetid swamp of big-moneyed interests calling the shots in Albany.  The initial proposal emanating from NYRA on re-privatization called for the current government-controlled board to pick the next one.  That doesn’t return racing to private control;  it perpetuates the state’s control.  There clearly are better options, and now is a time to step back and do the right thing.

The current NYRA leadership may not appreciate the low esteem in which they are held by racing fans, horsemen and horsewomen.  It stems from the enormous damage they have done to their credibility coupled with a lack of expertise when it comes to the sport they now run.  If new Board members are going to again be drawn from a list of campaign contributors, that perception will not be altered.  Adding even three respected and independent voices to the Board would go a long way to rehabilitate public trust.

NYRA on track for another Belmont fiasco

Posted by noonante on June 2, 2015
Posted in: Horse Racing. Tagged: , , . Leave a comment

Last year it was chaos leaving Belmont Stakes Day whether travelling by train or automobile, chaos in the seating areas and running out of food and beverages.  This year, there is a real possibility that fans walking up to a ticket gate will not be able to get in even if the event is not sold out.

David Grening, writing at drf.com, reports that even with 19,000 general admission tickets still available at noon on Monday, New York Racing Association spokesperson John Durso Jr. has said that NYRA will not sell tickets at the track even if the event is not sold out.

While it took almost a year for NYRA’s CEO Chris Kay to acknowledge substantial problems with last year’s Belmont Stakes experience, he has taken steps to address many of the issues.  Platforms on the Long Island Rail Road have been expanded, allowing for more cars in the station.  There is a plan for exiting the parking lots.  Food trucks have been expanded significantly, and Wi-Fi capability has been enhanced.  And, attendance has been capped at 90,000, some 12,000 short of last year’s number.

While there are no longer reserved seat tickets, general admission tickets are still available through Ticketmaster, but NYRA has consistently said tickets will not be available on a walk-up basis.  Unlike the Kentucky Derby and the Preakness, Belmont’s infield is not open to spectators, so I do not have a problem with capping attendance.  It makes sense.  It also makes sense to try to sell as many tickets in advance as possible, expediting the entrance of fans to the track.

But if NYRA does not sell all of those 19,000 remaining seats and adheres to their policy, we all know who is going to be turned away at the track.  It is the long-time fan who has been going to the track  –  and probably the Belmont Stakes  –  for years and is accustomed to walking up and plunking down the admission price.  Should that happen  –  and we all know it will if there are unsold seats  –  what will be NYRA’s response to the inevitable critical media coverage?

A hallmark of this NYRA administration has been a stubborn refusal to listen to common-sense suggestions.  There is no conceivable good explanation for why fans will be denied admission for an event that has not reached capacity.  CEO Kay is fond of citing other professional sports franchises for their ticketing policies.  But I have never heard of a fan being turned away from a sporting event when there are unsold tickets.

NYRA Chairman reportedly linked to Skelos in indictment

Posted by noonante on May 29, 2015
Posted in: Horse Racing, Political/Social commentary, Politics. Tagged: , , , , , . Leave a comment

According to a report at Capital, Anthony Bonomo, Chair of the New York Racing Association Reorganization Board, heads the unidentified medical malpractice insurer that provided a no-show job to the son of Dean Skelos.  The allegation concerning the insurer was not part of the complaint that led to the arrests of both Dean and Adam Skelos earlier this month, but was raised publicly for the first time in an indictment against the two men brought Thursday by U.S. Attorney Preet Bharara.

For those not following the latest major scandal to hit Albany’s state house, Dean Skelos, now the former leader of the state Senate, allegedly extorted a major real estate developer to provide money to his son Dean in the form of no-show jobs in exchange for favorable treatment on legislation important to the developer.  Two pieces of such legislation are due to expire, and are now part of the discussions in the effort to close out the legislative session in June.  They are a major tax break known as “421-a” and proposed changes to the rent protection law for tenants.

Until the indictments, the allegations against Skelos concerned his extorting the real estate developer and an environmental technology company with connections to the developer.  The indictment, however, also alleges that Dean Skelos also secured for Adam:

“Over $100,000 in payments and health benefits from a medical malpractice insurer who provided ADAM SKELOS with a no-show job while actively lobbying DEAN SKELOS on legislative matters.”

Reporter Laura Nahmias states that “multiple sources” informed Capital that the unnamed firm is likely Physicians Reciprocal Insurers, whose CEO is Anthony Bonomo.  Neither P.R.I. nor Bonomo returned calls from Capital.

Nahmias goes on to describe Bonomo, members of his family and P.R.I. as one of the largest 25 political contributors in the state, having donated $877,000 in just the 2014 election cycle.  The largest beneficiary of their largesse was Governor Cuomo.  Cuomo selected Bonomo to chair the NYRA reorganization Board in April.

There is no allegation in the indictment of wrongdoing by the “medical malpractice insurer,” let alone Bonomo.  The complaint leading to the arrests of both Skelos was replete with detail, including quotes from intercepted telephone conversations.  The indictment repeats many of those details.  Curiously, there are no such details concerning the “medical malpractice insurer” except for the above quotation.

New York stewards’ decisions are still not transparent

Posted by noonante on May 28, 2015
Posted in: Horse Racing, Political/Social commentary. Tagged: , . Leave a comment

At its meeting this week, the New York Gaming Commission heralded new weekly reports that purportedly foster transparency at the tracks of the New York Racing Association, with a particular emphasis on the reasons underlying decisions made by stewards on inquiries and claims of foul.  Regrettably, the new system adds no information that was not already known.

The new policy came about at the suggestion of Gaming Commissioner John Crotty in March, 2014, after a questionable decision at Gulfstream Park.  As Crotty observed correctly, racing fans should know why a horse was either disqualified or not.  Since then, we have witnessed controversial decisions in the Breeders’ Cup Classic won by Bayern and the Fountain of Youth where Upstart was DQ’d.  The Commission asked the Racing Fan Advisory Council, a state-appointed body, to make recommendations.

The Gaming Commission announced that it had started publishing weekly reports on its web site.  In its press release, the Commission stated it “will immediately begin posting online weekly reports from [NYRA tracks] that include detailed explanations of any rulings, inquiries, claims of foul and more.”  Here is a “detailed explanation” from the first week’s report on each of the six inquiries and claims of foul:

After reviewing the race video and speaking with all riders involved in the unanimous judgment of the Stewards no action was warranted.

This was the verbatim “explanation” of the Stewards, with minor deviations, for each of the races in which they made a decision.  (Punctuation and syntax in the original.)  But it adds nothing that racing fans do not already know.  Of course the stewards are looking at video and talking with affected jockeys.  What fans want to know, however, is why Bayern was not DQ’d and Upstart was.

It is commendable that the Gaming Commission is packaging a bunch of useful information in a weekly report, even if much of the data is readily obtainable elsewhere.  Even the “explanation” of the decision by the Stewards is posted on NYRA’s web site.  If, however, you want to trumpet an advance in transparency that further advances the integrity of the sport, you should actually do it.

 

Significant challenges to integrity of NY casino selections

Posted by noonante on May 21, 2015
Posted in: Political/Social commentary. Tagged: , , , . Leave a comment

There are two serious challenges to the integrity of the decision recommending three casino licenses in New York.  While there is not yet litigation attacking the recommendations of the Facility Location Board, separate letters from attorneys, one representing the Oneida Indian Nation and the other on “behalf of several clients,” should cause New York’s regulators to pause.  The letters are typical of those seeking redress prior to litigation being filed.

New York’s Gaming Commission has the decision-making authority on awarding licenses for up to four casinos.  The Facility Location Board, appointed by the Commission to conduct a procurement and evaluate bids submitted by 16 applicants, published its recommendations on December 17.  After the Board reached its decisions, Governor Andrew Cuomo stepped in, implicitly criticizing the Board and “recommending” that a new procurement be done to select a fourth site.  The Board and the Commission apparently saw the wisdom of the Governor’s suggestion and promptly acceded to his request.

The essence of each letter is that the Facility Location Board’s recommendations are arbitrary and capricious because they did not follow their own rules and did not evaluate competing proposals in the same way.  It is a charge that goes to the heart of government procurement practices:  evaluation of bids should be open, accountable and capable of withstanding public scrutiny.  The Board’s recommendations meet none of these standards.

The law authorizing awards of casino licenses specified the evaluation criteria that had to be used in making decisions.  The law further specified the weight to be accorded each of the three broad categories.  Thus, “Economic Activity and Business Development” was a factor to be weighted as 70 per cent of all the factors.  Within each of the general categories, there were a number of specific criteria that had to be considered.  In “Economic Activity and Business Development,” for example, there were nine specific factors the Board had to consider and evaluate, such as maximizing revenues to the state and creating the highest number of quality state jobs.

The law clearly requires that a quantitative assessment be made of each proposal.  The Board further committed to making public its scoring of the proposals.  Then, they shifted gears.  Even though the evaluation criteria were set forth in the law, the Board decided to add an additional criterion.  It created this new factor in secret, neither announcing it during its evaluation nor informing bidders of the need to address it in their proposals.  It also decided to give their new criterion “substantial weight.”  While the law did allow the Board to create additional criteria, it should be obvious that the authority was for fine-tuning, not a secret process that would ignore the specific directives of the law on evaluating proposals.

Instead of factoring their new criterion into the weighted quantitative system mandated by the law, the Board further decided to abandon the quantitative aspect altogether in favor of a “qualitative” one.  If this were not enough of a divergence from what they were required to do, the challenge letters assert that even then the Board did not apply their new approach consistently in assessing the merits of each proposal.

In short, a Board that had its responsibilities specifically set forth in a law decided to ignore the dictates of that law and embark on their own determination of how things should be.  In doing so, they have called the integrity of this particular bidding process into question.  Their work product is now before the Gaming Commission that appointed them and must now make the actual decision on awarding casino licenses.  The Commission is meeting on Tuesday, but the meeting agenda has not yet been posted.  (The Commission’s staff is in assessing the financial viability of the bidders recommended by the Board.)  Update:  The Facility Location Board recommendations are not on the agenda.

To this point, the Commission has been fastidious in protecting the integrity of the procurement.  It would mark a substantial departure if it now accepted the incompetent and sloppy product of its appointees.  The flaws in the recommendations of the Facility Location Board are so significant that their decision is unlikely to survive independent scrutiny.  If the Gaming Commission does not remedy the problem, a court will.

The last time a gambling license was put out for bid, it resulted in the odiferous selection of an operator for Video Lottery Terminals at Aqueduct Racetrack that could not survive the light of day.  While I am not suggesting that this decision is akin to that one, I would be particularly cautious knowing there is a sitting grand jury with a zealous prosecutor seemingly eager to go after the Governor.