It was sad watching the Saratoga Springs local Chamber of Commerce and an offshoot, Concerned Citizens for Saratoga Racing, hold a rally to support legislation they claimed would reprivatize the New York Racing Association. As the group twice did a chant on command of “WHOA Cuomo” for the TV cameras, the Legislature was passing the bills they supported.
Unfortunately, as one of the group’s leaders acknowledged in response to a question, the Legislature’s bill would guarantee the Governor control of 11 of the 15 members of a new Board. So much for stopping the Governor.
The New York legislative session ends today (or whenever they decide to start the clock again after stopping it at midnight), and there is a need to do something about the governing structure of NYRA. The current law that gives the state government control of the franchise expires in mid-October.
Four years ago when Governor Cuomo seized control of NYRA following bogus allegations of mismanagement, he promised his takeover would last only three years, because “state government has no role in running horse racing.” His administration did not come up with a recommended plan by their deadline, so government control was extended another year.
This year, NYRA, charged with coming up with a proposal, did as little as possible to meet their legal obligation, although it was clear that the only opinion that mattered was sitting (sometimes) in the second floor of the State Capitol. One house of the Legislature came up with a plan on May 25 that was soon adopted by the other chamber. The Governor’s plan was revealed a week ago. When you have four years to do something, I guess late is better than never.
There are two major differences between the bills:
- The Governor’s plan would give him effective control of appointing 13 of the 15 members on a new Board of Directors; the legislative bills would give him effective control of 11 of 15 members of the Board;
- The Governor’s plan would take $11.5 million in revenues from the Video Lottery Terminals at Aqueduct and direct them to government expenditures and not to NYRA.
Understandably, the debate on the legislation has focused on the money the Governor would like to take from NYRA. They project $57.5 million in VLT receipts this year, and the Governor proposes capping it at $46 million starting next year. The Comptroller of New York, Thomas DiNapoli, released an audit last week in which he concluded that NYRA is not currently profitable without VLT revenues, nor has it developed a plan to attain self-sufficiency without the monies. Charles Hayward, writing in Thoroughbred Racing Commentary, outlines the history of the VLT monies becoming a guarantee for 25 years, both contractually and by statute.
The composition of a future Board, however, is as significant an issue. On the current Board, remarkably, the Governor has less than half of the appointees, although he and his loyalists have controlled NYRA without needing a majority. There is perhaps a misperception that a “government-controlled” Board means it is composed primarily of state employees. Only one such person, however, has served on the Board since its inception four years ago.
So when both bills purporting to “reprivatize” NYRA would give increased and overwhelming control to the Governor, one would be inclined to laugh if the prospects for New York’s racing and breeding industries were not so grim. When one reads the Senate chair of the Racing and Wagering Committee challenging the Governor to veto their legislation, one does have to laugh. Cuomo is in a no-lose situation – he controls NYRA under either scenario, and he gets to keep his seizure of NYRA’s money alive. Someday, the so-called racing leaders in the Legislature will realize they are playing checkers while Cuomo plays chess.
We should also not minimize the possibility of a new NYRA Board moving ahead with an agenda that acts as though NYRA does not get VLT monies and budgets accordingly. This was actually proposed in August 2013, by Cuomo’s hand-picked Board Chairman David Skorton. In a rare instance of the NYRA Board actually commenting on something, it became an idea that was shelved quickly. Significantly, the charge was led by one of the Senate’s appointees and John Hendrickson, a Cuomo-appointee who resigned recently because the Governor did not listen to him.
So if we have a new Board composed of Cuomo loyalists, who can be counted on to serve the interests of New York’s owners, breeders, trainers, backstretch employees and fans? The state’s Gaming Commission? Mostly Cuomo appointees. The Franchise Oversight Board? Mostly Cuomo appointees. NYRA? More Cuomo appointees. There are groups representing owners, trainers and breeders, but they have been mostly silent on this debate, possibly because of their need to work with the Administration.
And when the Concerned Citizens and their legislative allies finish draining their champagne flutes after yesterday’s vote, perhaps they can consider how they will explain a new NYRA Board composed almost entirely of Cuomo loyalists as a result of the legislation they supported.