Tom Noonan

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Does casino legislation weaken impact of public opinion?

Posted by noonante on February 18, 2014
Posted in: Political/Social commentary, Politics, Saratoga thoughts. Tagged: Cecilia Tkaczyk', Joanne Yepsen, Liz Krueger, Saratoga casino. Leave a comment

Much has been made of legislation filed by two Senators with the stated purpose of increasing the role of the public in the siting of casinos.  Their bill, however, may actually have the effect of weakening that voice.

Voters in New York State approved an amendment in to the state Constitution to allow full-scale casinos on land not controlled by Native American tribes.  In both Saratoga County and the city of Saratoga Springs, however, voters disapproved permitting casinos anywhere in the state.  The vote in Saratoga Springs was particularly emphatic, with more than 58 per cent of voters rejecting the proposal.

In anticipation of the casino proposition being approved in November, the Governor signed legislation in July specifying the conditions and criteria to be used by the state Gaming Commission in deciding which applications for casino licenses would be approved.  The Gaming Commission must appoint a five-member Facility Location Board that conducts a competitive procurement and then makes its recommendations to the Commission for the final decision.  It is that law that Senators Liz Krueger and Cecilia Tkaczyk propose changing.

Under the existing law, there are two ways in which local opinion is considered.  The first  –  and I think more significant provision  – states:

As a condition of filing, each potential license applicant must demonstrate to the board’s satisfaction that local support has been demonstrated.

The other instance in which the voice of city residents is to be considered is in the evaluation of proposals that have been filed by bidders.  The law specifies the criteria to be evaluated in making a procurement decision.  The factor of “Economic Activity and Business Development” is accorded 70 per cent of the weight;  10 per cent is for “Workforce Enhancement;”  and the remaining  20 percent is “Local Impact and Siting.”  Within that 20 per cent, the criterion of “Gaining Public Support” is one of four sub-criteria , meaning that overall it is only about five per cent of the total evaluation.  According to the law, “gaining public support …  may be demonstrated through the passage of local laws or public comment received by the board or gaming applicant.”

The Krueger-Tkaczyk bill would substitute similar language for each of these provisions.  Under their proposal, “the enactment of local laws” would replace the evaluation criterion;  “enactment of local laws or resolutions in support” would become the new precondition for a bidder to file an application.

The amendment to the evaluation criterion  –  again, only five per cent of the total weight  –  is an improvement.  The notion that “public comment received by the … gaming applicant” is meaningful is foolish.  We already know that dozens of employees of the casino and the harness track are in favor of a casino  –  they have already spoken to that effect.  So, under the existing law, a proposal by the Saratoga Casino and Raceway begins with five per cent of the criteria being satisfied.  The Krueger-Tkaczyk bill would be a substantial improvement, mandating the enactment of a local law to meet the five per cent level.

The amendment to the precondition provision, however, is an entirely different matter.  The legislation would permit the precondition to be satisfied by the enactment of a local law or resolution  –  making the amendment, at best, redundant.  Under the existing law, the precondition must show that “local support has been demonstrated.”  The effect of the Krueger-Tkaczyk bill would be to allow the votes of three members of the Saratoga Springs City Council to override the express wishes of 4,725 of their constituents.  It is hard to see this as a strengthening of local support.

It has been my contention that casino advocates have a considerable hurdle to overcome in satisfying the precondition since 58 per cent of Saratoga Springs voters said “no” to a casino anywhere in the state.  It will take considerable rhetorical gymnastics to argue that even though that many voters are opposed to a casino anywhere, they nonetheless would favor one in their own backyard.

The experience in Massachusetts is that polls showed a majority of voters supporting  the idea of a casino, but once local support had to be demonstrated in an affirmative vote by its voters, many turned out to be not so positive.  Indeed, it is only in the state’s more depressed communities that voters have given their thumbs up.

This suggests that even among the 42 per cent in Saratoga Springs voting to approve casinos, many would be opposed to one in their community.  Casino proponents have argued that voters may be opposed to casinos anywhere, but would rather have one sited in their neighborhood instead of in Albany.  I have yet to see any empirical back-up for this view, one that has been advanced by the Mayor of Saratoga Springs, Joanne Yepsen.

What is NYRA thinking on Belmont Stakes changes?

Posted by noonante on February 11, 2014
Posted in: Horse Racing, Political/Social commentary, Politics. Tagged: Andrew Cuomo, Belmont stakes, new NYRA Board, NYRA. 2 Comments

The New York Racing Association is creating the second-richest day of racing in the United States by offering $8 million in purse money for Belmont Stakes day.  In its Friday announcement, NYRA leaders said purses for five traditional stakes races on Belmont day would be increased by $1.4 million, with five stakes normally run on other days being moved to June 7 with their total purses increased by $2 million.  The Friday announcement comes two months after NYRA said its financial situation required them to increase admission and parking charges for both the Belmont and Saratoga meets.

I do not think that anyone could seriously question whether this is now the most compelling race card in the country that is not the Breeders’ Cup.  Whether it is a good idea is entirely a different matter.

Among the races being moved are three from the traditional Memorial Day card, including the Met Mile, Ogden Phipps and Acorn, each of which is a Grade I.  Purses for the Belmont Stakes, Manhattan and Met Mile are being increased by $500,000 each;  the Phipps gets a $600,000 bump and the Acorn $450,000.  Two races that had been run on the Friday before Belmont Stakes day are being switched to Saturday.

The premise of the NYRA “experiment”  –  as CEO Chris Kay described it  –  is that $8 million in purses will draw casual fans to the track.  Owners, breeders, trainers and jockeys will understandably love it since it increases their potential pay day.  But when is the last time any fan  –  hardcore or casual  –  went to a day of racing because of the purse level?  Does it really add to the appeal if the owner of the Belmont Stakes winner will get $900,000 instead of the mere $600,000 from a year ago?  It is marketing money over the more compelling stories of the horses and their human connections.  And while a true fan loves nothing more than high quality racing, the Belmont under card has been so important to NBC television that it often does not even show the Manhattan as a live race  –  let alone discuss it beforehand.

Then there is the devaluing of a significant feature of the Belmont spring meet  –  the Metropolitan Mile and the two other Grade I’s run that day.  It is one of the most important events on America’s racing calendar and a fitting way to start the summer.  NYRA promised to add a compelling replacement program but has yet to reveal it.

The NYRA move further exacerbates what I think is one of the major flaws by the racing industry in attracting new fans  –  over-reliance on the Triple Crown races.  I’m not the only person who once thought that American racing consisted of three races.  If there is one thing the Triple Crown does not need is more attention, but that is what NYRA has done.  Instead of a marketing effort aimed at the Met Mile, Acorn and Phipps, those races will now become subordinate to the Belmont Stakes  –  a race that without a Triple Crown on the line is too often contested by mediocre three-year olds.

NYRA has not announced the admission prices for Belmont Stakes day, but CEO Kay chillingly referenced the Kentucky Derby as a valid comparison.  While Churchill Downs does run America’s most famous race, their mercenary efforts at cashing in on Derby Day is something to be avoided, not emulated.  I stopped attending the Oaks and the Derby when Churchill announced that our four “seats” on a metal bench in an uncovered area would now require a seat licensing fee of $3,000, entitling me to purchase tickets for the next five years.  (At that time, each number on the Derby bench cost $200.)

In addition to the effect NYRA’s announcement will have on the desirability of the remainder of the Belmont spring meet, its decision is particularly puzzling for one trying to fathom what the NYRA leadership is thinking.  Two headlines came out of the last meeting of the NYRA Reorganization Board on December 4.  One was a proposal to increase the general admission price at Belmont and Saratoga from $3 to $5 and clubhouse admission from $5 to $8.  Parking fees were also to be increased.  The other was the crucial importance for NYRA to stop counting on the revenues generated by the Video Lottery terminals at Aqueduct.

With the VLT payments  –  made from the profits of the private company running the Aqueduct racino  –  NYRA operates in the black.  Without them, it was looking at an operating deficit of $1.5 million for 2014.  In a mix of cost cutting and revenue enhancements, Board Chairman David Skorton proposed increasing the admission prices and parking fees to increase revenue by about $2 million.  If you happened to miss the original announcement and reaction, it was a proposal that was opposed by some Board members and met with a fair amount of vehemence from the public.  Coincidentally, the purse increases announced by NYRA for Belmont Stakes day will put an additional $2 million in the pockets of the owners of that day’s winning horses.

So the Belmont Stakes announcement  –  perhaps unwittingly  –   conjoined the controversial issues.  The money to fund purses comes from a different account than that used to operate NYRA’s three tracks.  Nonetheless, it doesn’t require a great deal of foresight to understand that following an announcement of significant increases for the  fan who supports the daily racing product with one boosting the payments to successful owners is unlikely to sit well.  NYRA’s efforts to draw a distinction between the different accounts will only make them look more foolish to an already skeptical public.

Apart from another potential public relations disaster, however, NYRA’s Friday announcement runs completely contrary to a message being pumped out by the Cuomo Administration’s top racing officials ever since the Governor seized control of NYRA almost two years ago.  His Budget Director, Robert Megna, who also sits on the NYRA Board, has been consistently strident  in pushing the remainder of the Board to stop relying on the VLT payments.  Robert Williams, Acting Director of the Gaming Commission, similarly does not miss an opportunity to make this point.  Whenever an Administration figure refers to the VLT payments, they are characterized as a “state subsidy,” even though the state’s involvement is limited to being a conduit between a profitable gambling company and the racing industry.

A cynic may wonder if the sudden and dramatic policy reversal is somehow tied to the Governor’s reelection bid.  He has demonstrated regularly that no amount of pandering is too insignificant to bypass.  And there should be no doubt that any member of the Cuomo Administration is going to make an announcement of this magnitude  –  or, for that matter, any announcement  –  without first getting the Governor’s approval.

Nonetheless, what this says about the “new” NYRA is disturbing.  Little has been accomplished since the Governor’s takeover with the notable exception of a marked reduction in racing fatalities.  In a little over a year from now, the new Board must recommend a replacement for a NYRA now run by the state government, but there has been no public discussion of what that would look like, with one notable exception.  That would be the importance of not relying on the VLT revenues.  Now that that important “principle” has been blown away by using those same VLT revenues to increase the purses for Belmont Stakes day, one can only wonder when the NYRA leadership will stop its flailing about for relevance and actually accomplish something.

Has Saratoga’s Mayor thrown in the towel on casinos?

Posted by noonante on February 2, 2014
Posted in: Political/Social commentary, Politics, Saratoga thoughts. Tagged: Joanne Yepsen, Saratoga casino. Leave a comment

Mayor Joanne Yepsen of Saratoga Springs has apparently decided she is powerless to prevent a full-scale casino from coming to the Spa.  Yepsen was elected on the same day that 58 per cent of the city’s voters opposed casinos anywhere in the state of New York.  The November vote was on a proposition to amend the State’s Constitution by permitting full-scale casinos on non-Indian land.

In her prepared State of the City address delivered Tuesday, Yepsen said:

But with the passage of Proposition #1 in New York State, we are at a crossroads, and we are at the mercy of the State.  Our community and local elected officials are nervous about having little-to-no voice in this decision that rests between the Governor, his citing [sic] panel and the commercial operators….

In her inaugural address, Yepsen said:  “Now that the referendum has passed, the question of whether we are for or against casino-style gambling is moot.”

Yepsen’s passivity is remarkable.  A newly-elected executive is probably at the height of her influence soon after being elected.  And if there was any mandate coming out of the Saratoga Springs vote, it is that voters overwhelming are opposed to a casino.  More significantly, however, the state law implementing the constitutional amendment gives the Mayor and the city significant leverage over whether a casino can be sited within its boundary.

That legislation, enacted over the summer in anticipation of the proposition being approved, spells out what the state government must do before authorizing a license to a casino operator.  There must be a competitive procurement by a Facility Location Board which then forwards its recommendations for up to four licenses located in upstate New York to the State Gaming Commission.  As a condition of eligibility for just filing an application, however, “each potential license applicant must demonstrate to the board’s satisfaction that local support has been demonstrated.”

This law would seemingly put casino proponents in the weaker position.  The experience in Massachusetts is that while voters there approved of the idea of a casino somewhere in the state, they generally opposed one in their own community if it is doing fine without one.  Those favoring a casino must argue  –  against both intuition and common sense  –  that the 58 per cent opposed to the idea of a casino anywhere would nonetheless support one in their city.

The Mayor clearly favors siting a casino in Saratoga Springs.  While she claims to have “precious little input” in the decision to locate one here, she attempts to become the negotiator who will achieve a “more moderate solution to prevent radical change to our City in the Country.”  One might think that a successful negotiator does not begin the process by conceding she has little power to prevent the proponents from having their way, essentially conceding that a Spa casino is inevitable.

The Mayor is committed to preventing a “Las Vegas-style casino” from coming to Saratoga.  The lead group opposing the casino is a grass roots effort called “Saratogians Against Vegas-style Expansion.”  While this may lead to a catchy acronym  –  “SAVE Saratoga”  –  I think it has had the effect of tossing a softball to the casino proponents.  If there is one thing all sides agree on, it is that Saratoga is no place for a “Vegas-style casino.”

Unfortunately it is a phrase that has no meaning.  Is it poker, black jack and roulette being permitted?  (It is not gambling on team sports since that is not authorized by the legislation.)  Is it boxing title fights?  Is it hookers and high-rollers flooding Saratoga?  Is it a neon replica of the Eiffel Tower rising over Nelson Avenue?  The proponents of the casino have stated their commitment to maintaining the character of Saratoga even if poker is now allowed on the premises of the VLT parlor at the harness track. There is no reason to doubt their word on this.  The reality, however, is that once the license is awarded, there is simply nothing to prevent the feared parade-of-horribles from occurring since the license and property can be sold without any local input.

The Mayor has expressed opposition to a “massive event space,” and a “colossal casino hotel,” and an “untold number of restaurants and shops” from opening at the site.  That means of course, she is amenable to all of those features provided they are not too large.  Once you enter that negotiation, you have essentially lost any ability to oppose any casino from coming.  If that is the Mayor’s position, that is fine  – she is entitled to her own views even if they conflict with an overwhelming majority of her constituents.  She should not, however, act as if she has no ability or power to advance the will of the majority.

Not so fast on that Saratoga casino

Posted by noonante on January 30, 2014
Posted in: Political/Social commentary, Politics, Saratoga thoughts. Tagged: Andrew Cuomo, Facility Location Board, NY casinos, Saratoga casinos, State Gaming Commission. 4 Comments

Governor Andrew Cuomo said in his budget address that “casinos are expected to be open as early as January 2015.”  This naturally delighted the operators of two existing racinos since only a facility already built could meet that time frame.  Before you make firm plans to spend next New Year’s Eve playing blackjack in Saratoga Springs, however, there are several factors that may delay the Governor’s timetable.

The first is that the Governor is not actually going to be the one making the decisions on which entities are to be awarded the four licenses available in upstate New York.  There is a five-member Gaming Facility Location Board that must conduct a competitive procurement and then make recommendations to the state’s Gaming Commission.  Nonetheless, if there is one thing the Governor is particularly adept at, it is ensuring that his appointees do what they are told and not go off exercising independent judgment.

There is, however, a law that must be followed.  This one specifies the factors that must be considered in deciding which of the bidders is going to get passed along to the Gaming Commission for their approval.  There are three general categories that are given differing weights in the evaluation process.  The category of “economic activity and business development” constitutes 70 per cent of the total evaluation.  Although “offering the fastest time to completion of the full gaming facility” is one of the permissible considerations, it is only one of nine factors that must be assessed.  Applying a simple mathematical calculation to each of the nine means that speed is worth less than eight per cent of the total evaluation.

Then there is the matter of the public’s perception of its government acting in a fair and reasonable matter, a factor that is particularly important when it comes to the freighted skepticism accompanying public procurements.  Awarding a contract  –  or, in this case, a license  –  is supposed to be open, competitive, fair, transparent and honest.  Rushing a decision to satisfy an impatient chief executive is a sure-fire way to insure that some  –  if not all  –  of those considerations will be abandoned.

Neighboring Massachusetts is now in the process of awarding casino licenses.  Its authorizing law was passed in 2011, not a mere six months ago as in New York, and its gaming body is only now deciding what licenses to award.  This follows an extensive and time-consuming consideration of the suitability of bidders, including a decision that resulted in gaming giant Caesar’s being knocked out of the process because of a tenuous connection with the Russian mob.  Despite their careful process, the widely-respected Chair of its gaming commission is now being assailed regularly for perceptions of favoritism, assertions that are not without foundation.

New York does not lack recent experience in botched procurements.  The most notable example was the disgraceful decision in 2010 by the then-Governor, then-Senate President and Assembly Speaker Sheldon Silver to award a contract for the operation of Video Lottery Terminals at Aqueduct Racetrack.  It was a decision so patently inappropriate that Speaker Silver called for an investigation (of his own decision), and Governor David Paterson reversed it six weeks following the award.

Last summer, the New York Racing Association was forced to rescind a contract award after pressure from Robert Megna, Cuomo’s Budget Director, and Robert Williams, the Acting Director of the Gaming Commission, because the award did not comply with a basic principle applicable to  government contract awards.  Ironically, both Megna and Williams now appear to be on board with their boss’ desire for a quick process. Megna’s proposed budget for the next fiscal year is counting on casino licensing fees to help balance the budget, and Williams’ office is publicly on board with Cuomo’s expedited time frame.

Then there is the Governor’s obvious disinterest in doing the nitty-gritty work of actually governing, as opposed to generating press releases and self-laudatory statements.  The Gaming Commission that is charged with making the decisions on casino licenses was created by a law signed almost two years ago.  Cuomo has five appointees on the seven-member Commission.  His appointees did not take office until June, 2013, and even after that delay he only made four of the five to which he is entitled.  (The Senate President and Speaker have yet to make either of their appointments.)  Because the law establishing the Commission requires four members to conduct any business, it is a body that is a medical emergency away from having no power.

The Gaming Commission still does not have a permanent Director even though the need for one has been known for almost two years.  Rob Williams is still the Acting Director although there is no reason to believe that he is not eminently qualified and capable of being appointed on a permanent basis  –  he just hasn’t been.  Similarly, Cuomo’s takeover of New York racing was supposedly precipitated in part by equine racing fatalities.  One of the most important recommendations to come out of a Task Force was the appointment of an Equine Medical Director for the state.  That recommendation was made to Cuomo in August, 2012.  It is only this month that a decision was finally made, and it was to the person who made the initial recommendation  –  again a person eminently qualified.

Finally, the Facility Location Board requires five three members before it can undertake its work.  On January 30, only one of the five has been appointed.  There are stringent qualifications needed to serve on the Board, and members will not be compensated.  Even though the need for Board members has been known since the law was signed on July 30, and six months in we have but a single member, the Governor is expecting this group of volunteers with significant professional credentials to drop everything to satisfy his wishes.  The Governor may not be averse to interfering in a public procurement, but Board appointees may be less willing to have their integrity questioned because of a rush to judgment.

The Governor would be much better off if appointments to the Gaming Commission and Facility Location Board were actually made, and he stopped inserting himself into a procurement process that is tightly circumscribed by a law for which he is primarily responsible.

Saratoga and casinos

Posted by noonante on January 21, 2014
Posted in: Political/Social commentary, Politics, Saratoga thoughts. Tagged: casinos, Joanne Yepsen, Massachusetts casinos, Saratoga Springs. Leave a comment

Residents of Saratoga Springs opposed to a full casino coming to town may have already taken their best shot at stopping it  –  and it could turn out to be a very effective one.  In the November 5 referendum on whether New York’s Constitution should be amended to permit full-scale casinos, 58 per cent of city residents who expressed an opinion voted against it, with only 42 per cent approving of the change.  Because the tabulation of votes was done for the entire state, however  –  with downstaters who cannot be affected by a casino in their area for at least seven years being the decisive votes  –  bringing such a casino to the Spa is very much a live proposition.

Understandably, it is a controversial question.  A group marshaling opposition  –  SAVE Saratoga (Saratogians Against Vegas-style Expansion)  –  held a rally of sorts on November 18 attended by a few hundred people to build resistance.  Four weeks later, the Chamber of Commerce organized what it billed as a fact-finding session, with this one attracting in the neighborhood of a thousand people.  While emphasizing that this was not to be a debate, the Chamber permitted proponents of a casino from Saratoga Casino and Raceway to be permanent participants on panels while refusing any role for SAVE.  Apart from those attending to become more informed, there were two distinct camps in the audience.

In anticipation of the constitutional amendment being approved, legislation was enacted during the summer spelling out general procedures for conducting a competitive process for siting up to four casinos in upstate New York.  The State’s Gaming Commission has general oversight authority over all gaming in New York, including horse racing.  The Commission will appoint a five-member Gaming Facility Location Board which will be responsible for conducting a procurement to recommend four bidders to the Commission for the four licenses to be awarded.  There are three regions of the state that may be awarded a license, with the Commission being authorized to make a second award in one of the three regions.  Saratoga County is in the region that includes Albany, Fulton, Montgomery, Rensellaer, Schenectady, Schoharie and Washington counties.

The legislation specifies the criteria that must be used by the Board in evaluating proposals, assigning relative weights to three general categories.  A weight of 70 per cent is assigned to economic activity and business development factors;  10 per cent is devoted to “workforce enhancement” factors.  The remaining 20 per cent is reserved for “local impact and siting factors.”  That 20 per cent criterion is further divided among four components, including “gaining public support.”  One does not need an advanced degree in mathematics to realize that local support will be roughly 5 per cent of the overall evaluation.

While much of the public discussion has focused on the procurement evaluation criteria, the law has what I think is a much more meaningful provision concerning the importance of public support:  “As a condition of filing, each potential license applicant must demonstrate to the board’s satisfaction that local support has been demonstrated.” In other words, before an applicant even gets to the procurement evaluation stage where the impact of local support is considerably watered down, it must show  –  independent of any other considerations  –  that it has community backing.

Legislative language has meaning.  It would seem obvious that “support” must be demonstrated by something more than some people in a locale supporting a project.  Otherwise there really is no standard since one can surmise that almost any proposal  –  no matter how bizarre or noxious to the majority  – would attract some level of support.  It is also a precondition for even submitting an application.  While the evaluation criteria set forth in the law states that public support may be demonstrated through “passage of local laws or public comment,” the “precondition language” is not similarly limited.  When a vote is 58 per cent to 42 per cent, it is viewed as a landslide.  (In the larger area of Saratoga County, 54 per cent of voters were opposed.)

The effort to bring casinos to Massachusetts is instructive.  The majority of those polled in Massachusetts, according to The Boston Globe, favor casino gambling in the state.  The Massachusetts law, however, required the explicit approval of voters in any community where a casino was to be sited.  The voters of East Boston, home to the Suffolk Downs race track, voted against siting a casino there even though casino proponents spent an amount of money geometrically greater than the opponents  –  an eye-popping $1.9 million in favor to $22,000 by those opposed.  Because Suffolk is also partly in the neighboring city of Revere which voted in favor, that proposal is still alive  –  at least for a project entirely within Revere’s city limits.  The voters in West Springfield, a separate city across the river from Springfield, voted down a proposal as did the voters of Palmer, a rural community not far from Springfield. Springfield voted in favor of a casino.

Having lived in both Springfield and Saratoga Springs, I am not sure I have any great insight based on that experience.  Springfield, however, is both a depressed  –  and depressing  – city.  The site of the proposed casino is on a corner of the downtown area that was once the center of the city.  It is near what remains of the downtown shopping area, court house, city hall and the city auditorium that was once home to symphonic orchestras (it may still be).  It would be as if the Saratoga Springs proposed casino was to be built at a corner of Broadway and Lake.

The Massachusetts experience, where approval by a democratic vote is essential, it is in the less affluent communities where voters favor a casino.  Revere, the city adjoining the Suffolk Downs property, initially approved siting a casino there, but must have another vote for a casino to be built entirely within its boundary.  It is a property bordering oil storage tanks;  Revere itself can best be described as gritty.  It would not be confused with Saratoga Springs.  If Revere voters favor it again, its competition for the Boston-area casino will come from nearby Everett where the proposed site is a former chemical dump.

The lesson from Massachusetts suggests that while voters may approve the idea of a casino somewhere in the state, they do not want one in their community unless it is a city that desperately needs the economic stimulus (assuming there is one).  Those in favor of bringing a full-scale casino to Saratoga Springs have to explain why any of the 58 per cent of local voters opposed to casinos anywhere in New York would nonetheless welcome one in their own back yard.  It is a notion that is counter-intuitive, despite the efforts of casino proponents to argue that the voters would rather have it in the Spa than in Albany.

Joanne Yepsen, recently elected Mayor of Saratoga Springs, was quoted in The New York Times as saying, “Now that the referendum has passed, the question of whether we are for or against casino-style gambling is moot.”  Setting aside the question of whether a recently-elected official  –  whose margin of victory of 8 percent was considerably smaller than the 16 per cent difference on the casino vote in her own city  –  should ignore the wishes of her constituents and defer to those from New York City, that is simply not what the law requires.  Casino proponents must demonstrate local support before even submitting an application, a considerable hurdle to overcome in light of the recent vote  –  at least if explicit legislative language is to be given any meaning.

Rush Limbaugh speaks the truth

Posted by noonante on January 18, 2014
Posted in: Political/Social commentary, Politics. Tagged: Conor Friedersdorf, Rush Limbaugh. 1 Comment

I do not consider myself particularly naive when it comes to politics or the media, but this piece by Conor Friedersdorf in The Atlantic really took me aback.  It’s not that I ever put much stock in Rush Limbaugh  –  actually I never put any stock in him  –  but this is a level of cynicism that is shocking.

Friedersdorf listened to last Monday’s broadcast of Limbaugh’s radio show in which the host explained why “conservatives” would not be rallying behind New Jersey Governor Chris Christie in the bridge scandal the way they backed Clarence Thomas in his confirmation hearings for the Supreme Court.  Limbaugh acknowledged knowing little about Thomas  –  let alone the facts in the sexual harassment allegations by Anita Hill  –  but he was sure of one thing. Thomas was a conservative and his attackers liberal.

Christie, apparently, is insufficiently conservative.  Friedersdorf quotes Limbaugh as saying:

I’m trying to make the point that over there in the RINO Club, the Republican establishment … there’s not an ideology.  There’s not a belief system. 

Now, if there were a fervent ideological foundation, if there was a substantive reason of believing in Governor Christie, then whether he lied wouldn’t matter.  They’d be out there defending him left and right just to make sure the Democrats don’t get away with this.

I do not know if Limbaugh considers himself to be a journalist but, really  –  “whether he lied wouldn’t matter?”  It’s easy to dismiss Limbaugh as a loud-mouthed clown, but he has a significant part in setting the agenda for one of our two national parties.  I know intelligent people who believe what they read or hear in the right-wing media despite any  –  you know, facts  –  to back up their belief system.  I wonder if they will start to question their reliance on charlatans like Limbaugh.

Chris Christie’s remarkable news conference

Posted by noonante on January 9, 2014
Posted in: Politics. Tagged: bridge scandal, Chris Christie. 1 Comment

It’s always interesting what seemingly minor event turns into a scandal that could derail a political career.  A four-day traffic jam near the George Washington Bridge in New York was threatening the presumed campaign of New Jersey Governor Chris Christie for the Presidency.  E-mails made public yesterday revealed that top Christie aides planned the traffic jams by closing lanes of traffic as political retribution against the Democratic Mayor of Fort Lee who refused to endorse Republican Christie’s reelection campaign last year.  Christie, aside from twice being elected in a “blue” state, has achieved fame for his bluster and confrontational approach to dissenters.  He also has earned the likely permanent disapprobation of Tea Partiers and other Republicans for literally hugging Barack Obama during the 2012 presidential campaign when the President visited storm-ravaged New Jersey.

Christie just completed a press conference lasting almost two hours at which he made a brief statement denying any knowledge of the planned traffic disruptions, expressing “embarrassment and humiliation,” and accepting responsibility as the state’s Governor.  He also announced the termination of two officials who wrote the e-mails.  And, he stood there for a remarkably long period of time answering the reporters’ questions.  It was a unique performance in that he was neither evasive nor carefully parsing answers.  He came across as both credible and  –  in stark contrast to prior Republican presidential candidates  –  articulate and knowledgeable.  While the news media will undoubtedly flog this story endlessly until the next “red meat” event comes along, Christie’s performance was remarkable and convincing.  If it turns out he was lying, my embarrassment will be exceeded considerably by his.

NYRA Board facing challenges

Posted by noonante on December 13, 2013
Posted in: Horse Racing, Political/Social commentary, Politics, Uncategorized. Tagged: Chris Kay, David Skorton, NYRA, NYRA Reorganization Board, ticket prices, VLT revenue. 2 Comments

The NYRA Reorganization Board started to deal with some of the significant challenges facing it at its Board meeting on December 4.  Almost all the coverage of the meeting focused on the proposal to increase admission charges to Belmont and Saratoga.  General admission would go from $3 to $5 and the clubhouse would be bumped from $5 to $8.  Charges for parking would also go up.  No change was proposed for Aqueduct where admission is free.

While the increases affecting patrons understandably drew the most comment, the overall fiscal situation of NYRA is one that can hardly be described as rosy.  At the August Board meeting, the continuing use of revenues from the Aqueduct Video Lottery Terminals was the financial issue attracting the most attention.  It was clear from Governor Andrew Cuomo’s top appointees to the Board  –  Chairman David Skorton, President of Cornell, and Robert Megna, also Cuomo’s Budget Director  –   that NYRA had to start operating as if the VLT revenues were no longer available.  It is a significant issue.  Without the VLT revenues, NYRA’s racing operation realizes a loss;  with the revenues, NYRA sees a profit.  Incidentally, the loss of VLT revenues is only an immediate concern if you are the Governor  –  and we do not know what his thinking is on this matter, as with so many other issues affecting the state.  The revenues are guaranteed to NYRA by statute.

The main purpose of last week’s Board meeting was to approve the NYRA budget for 2014.  The proposal put forth by NYRA management would have the racing operation realize a $250,000 profit without factoring in the VLT revenues.  That would be accomplished by cuts in spending and increases in revenue.  The VLT revenues were not going away, however.  The estimated $23.7 million for operating expenses from the VLT’s was to address retiree obligations of $12.5 million and an unanticipated obligation to the Internal Revenue Service of $13 million.  Suddenly, the $250,000 surplus becomes a deficit of $1.5 million.

If we set aside for the moment the receipt and use of the VLT revenues, NYRA is proposing to turn a 2013 deficit in the racing operation of $10.5 million to that $250,000 surplus, from cutting costs by $3.9 million and increasing revenue by $6.9 million.  The cost cutting is achieved primarily through a one-time payment of $3 million to the OTB network in 2013.  The other big-ticket cuts are $400,000 in utility savings by closing the Aqueduct training track when there is not racing at the track, and $576,000 in outside legal fees.  On the revenue side, fully one-third of the budgeted increase results from on-site track customers in the form of increased admissions, parking, programs and the food and beverage concessions.   The increased costs to patrons are one of the only revenue increases over which NYRA has complete control.  While the budget contemplates increased simulcasting fees of $1.6 million and additional sponsorship payments of $1.3 million, these are aspirational projections contingent upon successful negotiations.

The Board debate on increasing customer charges is one of the few issues on which this Board has seen a spirited debate in its year of existence.  (I can only think of two other cases in which there was significant dissent.)  It is clear NYRA needs additional revenue, even if you assume the VLT revenues are here to stay.  What is less clear, however, is whether increasing admission and parking charges  –  estimated to be worth about $2 million  –  would be offset by a decline in attendance (and handle), resulting in either no net benefit or a financial loss.

I have had a mixed feeling about admission prices at race tracks ever since I started going.  On the one hand, I did not understand why tracks did not let people in for free.  While there may be folks who go to a track and don’t spend a penny, most are going to wager at least something.  I don’t think I have ever brought anyone to the track for the first time who did not bet on every race.  On the other hand, it is one of the cheapest entertainment expenses imaginable.  For $3 (or $5), you get to go to a beautiful facility, watch magnificent animals up close, engage in the excitement, and wager.  Kids get in for free.  That’s why I do not think the small increase in prices will deter many, if any, people.  (I do not know what the parking increases will be.  That is something, I think, that could irritate enough people to cause folks to go elsewhere.)

That’s not to say, however, that NYRA was particularly brilliant in how it handled this issue.  It is the kind of matter that is going to bring out the naysayers always on guard for any affront  –  just read some of the comments in the on-line media.  (I think I have seen a single comment defending the decision.)  While the 2014 budget had to be approved this  month, it did not mean that the price increase could not have been floated in advance.  NYRA may think it has a deep well of goodwill, but they have done little as the “new NYRA” (which is how they have started to refer to themselves), and what they have done is invisible to much of the public.

Then there are components of the budget that raise eyebrows. CEO Chris Kay is hiring additional executive-level staff, including something called a “Chief Experience Officer.”  That would be in addition to the existing Chief Marketing Officer and a Vice President for Hospitality and Guest Services.  There is also $800,000 set aside for a “long term planning consultant.”  This is a Board that was appointed 14 months ago, named a “long-term planning committee” 10 months ago, and is down to its last 16 months before it must produce a recommendation for turning the “new NYRA” back to an “improved new NYRA” that will eliminate state government control.  After apparently doing no long-term planning, they are down to paying top dollar for someone to tell them what to do.  Then there is an item notable for its omission from the budget document.  Prior CEO Ellen McClain proposed an effort to bring betting terminals into restaurants in New York City.  Not only would this be a major benefit for racing fans in the largest United States market, but would greatly enhance revenues to NYRA.  It’s hard to believe that you can go to Manhattan and not be able to place a legal bet, but nothing has apparently been done on this proposal since McClain left.

In his remarks supporting the increased charges on customers (or, as he likes to call them, “guests”), Kay acknowledged the importance of bringing “significant value” to justify the increased costs.  In a speech this week, he referred to the “countless e-mails and letters telling us the wonderful things we’ve done,”  according to Tom LaMarra in BloodHorse.com.  Kay was not more specific, although I must say I did have several NYRA employees greet me in a friendly manner this year at Saratoga.  The one specific I have heard from Kay is that increased satisfaction from patrons should not be measured by the decline this year in Saratoga’s attendance, but rather in the fact that those who did come spent more money on concessions and souvenirs.  He attributed this to his increased focus on the “guest experience,” which would make him somewhat of a miracle worker since he started in the job just before the Spa opened.  For 2014, the only “significant value” he has identified is High Definition TV’s.  At this point, I think most people would take that as a given, rather than something warranting increased prices.

When NYRA Board Chairman David Skorton pushed for the authorization to increase prices on its customers, he repeatedly referred to the Board’s “fiduciary” duty.  The Board undeniably has that responsibility, but it doesn’t end with jacking up prices.  It means you also question the wisdom of $800,000 to do the long-term planning many people think was a primary duty of this Board, or the necessity of a “Chief Experience Officer,” when, again, many think that’s why this Board was appointed.  Or it means you do something about placing betting terminals in New York City’s restaurants, a revenue enhancer that would lessen the pressure to increase costs for the customers who go to the track.  Finally, exercising one’s fiduciary responsibilities means you push back on a Governor who is hell-bent on eliminating the VLT revenues  –  monies realized not from the state’s coffers but from the profits of a casino operator  –  if that is necessary to ensure a viable racing and breeding operation in New York State.

As I said earlier, I have mixed feelings about increasing admission prices.  I would feel a lot better about it if I thought the Cuomo Administration and his top appointees were showing any interest in actually making it better for the racing and breeding businesses in the state.

Time for racing leaders to get their heads out of the sand

Posted by noonante on December 8, 2013
Posted in: Horse Racing. Tagged: Bob Baffert, Congressman Joe Pitts, Coronado Heights, drugs in racing, horse racing, HR 2012, Task Force on Racehorse Health and Safety, Todd Pletcher. 7 Comments

The forces opposed to drugs in horse racing now have their poster child  –  or poster horse if you will.  The recent Congressional hearing on the subject will not be the last time you hear the name Coronado Heights bandied about.  The four-year old gelding broke down in his third career start and had to be euthanized.  What has elevated this $7,500 claimer to prominence is being featured at the Congressional sub-committee hearing on legislation, HR 2012, that would provide federal oversight on the administration of drugs to racehorses.  The hearing ended with Congressman Joe Pitts asking two witnesses how the 17 injections given Coronado Heights in the week before his death was “putting the horse first.”

The Congressman, a Republican from Pennsylvania, is one of four co-sponsors of HR 2012.  The legislation would authorize the United States Anti-Doping Agency, the organization that finally dropped the hammer on Lance Armstrong, to regulate drugs that can be administered to racehorses, and establish penalties for those individuals violating its rules.  The key standard to be used in administering drugs is the principle of the Veterinary-Client-Patient Relationship set forth in the ethical rules of the American Veterinary Medical Association.  The essence of a VCPR is that a veterinarian’s treatment of the patient  –  in this case a racehorse  –  must be predicated upon the health needs of the animal and the independent professional judgment of the vet.  If medication is to be administered, it must be necessary to treat a documented medical condition.

Coronado Heights came to the attention of those who did not handicap Aqueduct’s 10th race on February 25, 2012, when his death was featured in a New York Times article by Joe Drape and three other reporters.  The article, published the week of the 2012 Kentucky Derby, included a graphic of 17 syringes depicting the drugs administered to the horse before his fatal race.  The accompanying article stated the gelding experienced pain and cartilage damage from a degenerative joint disease, and had been injected 13 times in the month before the race to treat that condition.  Coronado Heights was trained by Todd Pletcher who, as I write this, not only leads the nation in purses won this year with $24 million, but is $10 million ahead of number two.

The catastrophic breakdown of Coronado Heights was one of 21 fatalities experienced during the Aqueduct meet of 2011-12.  This prompted a call by Governor Andrew Cuomo for an independent review to ascertain the causes of the fatalities and to make recommendations.  The Task Force on Racehorse Health and Safety could not identify a single factor leading to the breakdowns, but did recommend a regulatory change to increase the time that one of the drugs administered to Coronado Heights in the week before the race could be administered.  The drug  –  Depo-Medrol®  –  had “been demonstrated to have degradative effects on articular cartilage,” according to the Task Force Report.

At the Congressional hearing, Philip Hanrahan, CEO of the National Horsemen’s Benevolent and Protective Association  –  the only witness who opposed the legislation of the six testifying  –  answered Congressman Pitt’s pointed question by quoting from the Task Force Report:  “Pre-race medication administered to the fatally injured horses  was similar  to that administered to the uninjured horses that raced.”  (The Report also said that trainer Pletcher “reported that the pre-race medication program for [Coronado Heights] was standard practice for all of the horses in his stable.”)  Hanrahan noted that wide-scale drug testing produces negligible results for impermissible medications and concluded that HR 2012 addresses a “problem that in reality does not exist.”

While Hanrahan’s comments may seem tone deaf, they are probably reflective of the industry consensus.  I think there are three components to the debate on drugs:

  • Drugs for which there is no therapeutic use  –  there appears to be universal agreement that such violations should be treated severely.  (The most recent notorious example being Demorphin, produced from the skin of South American frogs.)
  • Lasix  –  generally the only medication permitted on the day of a race, and at the heart of many of the most heated debates within the thoroughbred community.  Advocates of its use point out that it reduces pulmonary bleeding and is not a performance-enhancing drug.  It is the latter assertion with which I have the most difficulty.  The weight being carried by a horse is a major component of racing.  That’s why we have handicap races, assign differing weights based on age or gender, and why apprentice jockeys get a weight allowance.  If a three-pound difference in a race among older male horses is important, why is not the 20 pounds a horse may lose in water weight because of Lasix also significant?  To say this is not “performance-enhancing” flies in the face of much of racing history and thinking.
  • Legal therapeutic medications  –  all the medications Todd Pletcher had administered to Coronado Heights were legal.  For many in racing, that is where the inquiry should end.  What HR 2012 would require, however, is that any administered medication must address a specific diagnosis.

While the use of Lasix on race days draws most of the attention within the racing community, it is this third category that is the most troublesome if one’s concern is the widespread perception of rampant drugging.  The same day as the Congressional hearing, the California Horse Racing Board released its report on the sudden deaths of seven horses trained by Bob Baffert over a 16-month period ending early this year.  “Sudden death” is the acute collapse of a seemingly healthy horse, and is distinguished from the more common musculoskeletal injury that is the more typical cause of a racing fatality.  While sudden deaths during training or racing are not uncommon, it was the clustering of such a large number from the Baffert barn that led to the investigation.  The investigators concluded the causes of the deaths “remains unexplained,” while also noting that there was “no evidence” of illicit activity or rules violations.

There was one drug, however, that drew extra attention in this Report.  Baffert informed investigators that Thyro-L (levothyroxine) was used on all of his horses.  The medication  –  use of which is legal  –  is for treatment of hypothyroid conditions.  The report stated that it is a medication most commonly used to assist in weight loss for overweight horses returning from the farm.  Baffert, however, thought the medication was used to help “build up” his horses.  While it must be prescribed by a veterinarian, the Report concluded that Baffert used it more as a supplement and it was regularly added to feed tubs by barn staff, including grooms.  The Report further added that in its discussions with veterinarians, “prescribing thyroxine without evaluating thyroid levels is consistent with the standard of care for prescribing and dispensing thyroxine at the Thoroughbred race tracks in southern California.”  Also,  Baffert’s “use of medication and veterinary services … can best be described as moderate.”  Baffert discontinued the use of thyroxine in April following the sudden death of his seventh horse.  According to one report, he has not had a sudden death injury since then.

The most frequent argument of those defending the use of drugs in racing is that the percentage of horses testing positive in a post-race sample is negligible.  And they would be correct.  The number cited by Phil Hanrahan in his Congressional testimony is that less than one percent of tests over a four-year period were positive, and a much smaller percentage (142 of 368,900 tests) were for substances that were illegal.

When your prime argument boils down to the seemingly rampant drugging of racehorses being OK because the drugs are legal therapeutic medications  –  without addressing whether a particular horse needs the medication  –  you are missing the essential point of the case made by those opposing the racing industry’s use of drugs. I doubt there is a sensible person who would oppose medications for an animal who needs it.  But when the nation’s two leading trainers are administering drugs  –  albeit legal ones  –  without regard for the medical needs of a particular horse, we are no longer talking about therapeutic drugs, but rather drugs they hope will be performance enhancing.  Todd Pletcher said the drugs given Coronado Heights were consistent with what his horses received;  Baffert administered the same drug to all his horses without even knowing what the purpose of the drug was.  If they give the same drugs to all horses irrespective of an individual’s medical condition, what possible motivation would they have other than enhancing the horse’s performance?

If the top purse earners nationally are acting like this, what do you think will be the message sent to all trainers and owners?  If Pletcher and Baffert are engaged in this level of drugging  –  once more I will emphasize it is legal  –  why would a lesser trainer not try to stay competitive, particularly when it is becoming increasingly more difficult to compete with the guys who consistently get the best horses?  If racing’s leaders do not think this presents a major problem, both for the perception of racing in the general public as well as the many struggling to make a buck in this business, it really is time to get their heads out of the sand.

That brings us back to the main purpose of HR 2012.  It’s not that the sponsors want to kill horse racing.  It’s that if an animal is being asked to compete in an inherently stressful event for our entertainment, that animal should not be required to absorb drugs that are not needed to address a medical condition.  How can this industry oppose legislation that would require that drugs administered to a racehorse be ones necessary to address a medical condition?  That’s the main thrust of HR 2012.  The bill would not prevent a Coronado Heights from receiving the drugs he did in his last week if they were medically necessary.  Of course, if he did need that level of medication, sensible minds might wonder why he was racing at all.  And that is the real threat to our sport.

Fed indictments up the ante on drugs in racing

Posted by noonante on November 26, 2013
Posted in: Horse Racing. Tagged: horse racing and drugs, Penn National indictments. Leave a comment

While the horse racing world was focused on last week’s Congressional hearing on racing and drugs, a potentially much more significant event occurred a day later.  The federal prosecutor with jurisdiction over Penn National Race Course filed four indictments, three against trainers and one against a clocker.  The trainers were each charged with federal law violations for conduct contrary to the state’s regulatory standards;  the clocker was charged with falsifying workout times.  The potential penalties are severe  –  imprisonment for up to 20 years and a fine of up to $250,000.

Each of the indictments against the trainers (who are being charged individually, not collectively) alleges they either administered a medication not permitted under Pennsylvania law within 24 hours of a race, or had syringes and medications in their barns that were prohibited by the state.  Two of the trainers, Samuel Webb and Patricia Roberts, were literally caught with the syringe in hand.  The third, David Wells, who is third in numbers of wins at Penn this year, is accused of a four-year pattern of violating Pennsylvania’s medication rules.  Clocker Danny Robertson is accused of fabricating workouts and workout times in exchange for payments from trainers.

Anyone familiar with racing knows  –  or suspects  –  that there are drug violations and that some clockers play games with workout times.  That doesn’t make the business unique since all enterprises have their cheats.  But how does this become a federal crime?  Because the simulcasting of Penn’s racing to other states and countries means the federal laws prohibiting wire fraud and the “use of an interstate facility to promote gambling in violation of state law” come into play.  The wire fraud in the case of both illegal doping and incorrect workout information is that bettors are being deceived by being provided with false information  –  through the internet  –  about a horse’s chances in a given race.  The state law violations are those governing the administration of medications and the recording of accurate workout times.

The hearing in Congress may have received more attention last week, but the federal prosecutions should send a chill down the spine of anyone who is cheating.  Being charged with a federal crime is no small matter, particularly when the potential penalties are as high as they are in each of these cases. There is a reason a federal criminal courthouse is described as the “house of pain.”  Most prosecutions either end in a plea deal or a conviction.  A defendant who escapes with neither is nonetheless looking at substantial legal bills.

The evidence needed for a conviction may not be as substantial as one may think, at least according to the particulars of the indictments against the trainers.  None of the doping allegations specify the drug that was administered or that the trainer attempted to administer.  Nor is there any allegation that a test came back positive.  It is enough that a trainer had a syringe in his or her hand, or that there were syringes or medications in the barn  –  neither of which is permitted under the Pennsylvania regulations when possessed by someone not a veterinarian.

Much of the debate surrounding the issue of illegal drugging centers on testing, the reliability of testing laboratories, and the cumbersome administrative protocols for disciplining those caught.  If you can be charged with a federal crime for merely possessing the instrumentality  –  syringe or drug  –  that could be used to administer an impermissible medication, the racing world could be entering a whole new environment.

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