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However, it is already having an effect in the horse-playing community. One California- based activist who was instrumental in spearheading the boycott of Santa Anita races last winter when exotic takeout rates were raised precipitously is talking about boycotting the NYRA races this winter.
The New York Racing Association press release issued Wednesday appeared to be positive with a headline reading “NYRA Lowers Takeout.” Until one reads further.
“The New York Racing Association has announced that takeout on Trifecta, Superfecta, Grand Slam, Pick 3, Pick 4, and Pick 6 wagers will be lowered by two percentage points to correct an unintentional oversight by which NYRA’s takeout for exotic wagers was one point above the statutory limit.”
“Unintentional?” For a period of 15 months? A lower takeout? Could they have been more disingenuous?
The news also raised other questions: Will this lead to the mother of all class action suits? Does this mean they were operating illegally and guilty of malfeasance? Will there be sanctions beyond those already outlined? What culpability does New York’s State Racing and Wagering Board share, if any?
The law on this is complex. The NYRA is a franchise of the state, not a licensee. As such, only the Franchise Oversight Board or the state legislature can apply sanctions.
In a sternly worded letter to NYRA President Charles Hayward, FOB chairman Robert Megna not only took the NYRA to task but also the State Racing and Wagering Board for failing to catch the “unintentional oversight.”
“Bettors across North America were overcharged by approximately $7 million,” said Megna at a SRWB board meeting Wednesday. “NYRA itself benefitted by more than $1 million,”
Continued Megna: “Whether this overcharge was due to malfeasance or inadvertence, swift action must be taken to repair the damage caused by NYRA.” And then this:
“You have repeatedly argued that that the high compensation paid to NYRA officials is to insure that talent is attracted to the Association. That position, of which we were skeptical to begin with, rings hollow in light of NYRA’s failure to manage a most basic accounting task.”
SRWB Chairman John Sabini acknowledged that his agency should have acted sooner—preferably when the statute was first breached on September 15, 2010. “Quick action is required not only to protect the bettors but to insure this mistake is not compounded going forward.
“It’s unfortunate this mistake wasn’t discovered sooner and an adjustment made [by the SRWB] in a timely fashion,” the Chairman continued. “But this is NYRA’s responsibility.”
Said FOB Chairman Megna regarding the SRWB’s miscarriage in this instance: “I would be remiss if I did not express deep disappointment in the failure of the Racing and Wagering Board to adequately discharge its regulatory responsibilities.”
The only power the SRWB has in situations like these is to deny a license to licensees. In New York, that means the state’s harness tracks and Finger Lakes Casino and Racetrack, but not the NYRA, a franchisee.
The SRWB can, however, pull the license of NYRA personnel if it is determined that a person or persons is found culpable. Anyone directly involved in horse racing in New York State needs to be licensed; owners, trainers, jockeys and backstretch workers.
In this case, those found responsible can have their licenses pulled if their “general fitness of character is not in the best interests of racing.” This clause was invoked by the SRWB when it ordered the 10-year suspension of trainer Rick Dutrow, a ruling currently under appeal.
Meanwhile, the FOB has ordered the NYRA to work with the SRWB to make reimbursements to overcharged customers. Account holders on and off track have the means to have their wagers reviewed, as do winners having IRS documentation. Everyone else is out of luck.
Some bettors were “lucky”--those super-exotics winners who were not required to pay IRS withholding because payouts were less than they should have been.
The NYRA has been given deadlines meant to address grievances and compensate bettors who can prove damages. Simulcast bettors into NYRA pools are highly likely to be out of luck, joining all those lacking the needed documentation.
Pools where the takeout should be 25% by statute; the Pick 3, 4, 6, Trifecta, Superfecta and Grand Slam, will be lowered to 24% effective December 28 for 15 months, the same time period bettors were overcharged.
Meanwhile, an ongoing investigation conducted by the State Comptroller and Inspector General Offices will continue. In addition to making payment adjustments to cheated bettors, NYRA will be required to make a $50,000 contribution to a racing-related charity.
NYRA must take measures to clear up tax issues created because payouts adjusted upward might now have IRS implications for winning bettors. It also is likely it will try collecting from their simulcast partners which benefitted from underpayment to winning bettors. However, it might lack the legal remedies to do so.
What a mess. What an avoidable mess.
23 Dec 2011 at 06:26 pm | #
“Unintentional oversight”? Somebody, some person had their finger on this from the start. Smells like the skimming by the mob in the old days in Las Vegas. I sure would like to see the books on this one. Or maybe both sets of books?
23 Dec 2011 at 09:51 pm | #
Woof,
I think this probably started with incompetence then, who knows? Anxious to see what the two investigations will discover, and how the language is parsed.
Thanks,
JP
24 Dec 2011 at 07:31 am | #
Believing NYRA’s takeout blunder was a deliberate act is giving far too much credit to the people in a position to have made such a decision.
To assume this was a conscious decision is to also assume the same people believed they would never get caught, which is preposterous on its face.
The only intentional part of this “unintentional” shafting is incompetence.
24 Dec 2011 at 07:55 am | #
JRP,
Your comment that “there was no immediate outrage in the racing media and blogosphere” mirrors an opinion written by Richard Eng.
I think the answer is because Aqueduct is not racing this week some of the people who cover NY are not working.
In addition, the few print turf writers who still exist can only post stories on the days their work appears. I got the news midday Wednesday but don’t get a Thursday column. Both my Friday and Saturday articles are on this subject.
I’m sure this topic would dominate Trackfacts, but we don’t get a show Sunday because it’s Christmas.
Alan Mann of the leftatthegate blog wrote a great commentary which appeared Thursday. I suspect others did as well.
The bottom line? This story is not going to go away quickly.
24 Dec 2011 at 08:24 am | #
I would be curious to know where the over payment dollars have been sitting and accumulating every month. Unless NYRA books are a total mess you would have to believe that somebody saw extra money being accumulated every month, for 18 months......no?
24 Dec 2011 at 08:47 am | #
Eric,
According to a Bloodhorse story & Robert Megna’s comments, NYRA retained about $1 million, with the rest going to simulcast sites which pay a flat fee to carry the NYRA signal. Those sites got the overage on the share of the handle they have.
24 Dec 2011 at 09:04 am | #
Would someone like to explain how NYRA benefitted? I thought that a raise in takeout causes losses in profits. If you believe NYRA actually benefitted from this, then you are saying that at the previous levels the takeout rates were too low because that is the only way raising takeout could increase profit.
24 Dec 2011 at 11:19 am | #
I’d like Charles Hayward to either be fired or resign.
He’s responsible for what takes place at NYRA and this was ineptitude at it’s finest.
To basically “steal” 8.6 million dollars out of players pockets? And call it an “oversight”?
Not acceptable.
NYRA needs to clean house on it’s own or be forced to do so by the state.
But Hayward and whoever under him is responsible for knowledge of takeout laws must be shown the door.
24 Dec 2011 at 11:54 am | #
Nick Kling - don’t you work for Capital OTB? Did Capital OTB not charge the same too-high exotic takeout? Does Capital OTB not have a cadre of lawyers and accountants? Do they not track their business? Do they not know how much they are supposed to be charging their customers? What portion of your Capital OTB salary came from Capital charging its customers too much for exotic winnings? Did you think about this before you wrote your columns taking NYRA to task? Has Capital OTB owned up to the mistake like NYRA has? Has Capital OTB presented a plan for reimbursing its customers like NYRA has? Maybe Capital OTB owes the bettors an apology? Maybe you owe the bettors an apology, Nick, and maybe you owe them a portion of your salary from Capital OTB. Bye the way, when you apologize, will you say it was “unintentional”? Really? Where have I heard that excuse before.
24 Dec 2011 at 12:41 pm | #
Al,
Not sure you can reach out to him but Robert Megna, the chairman of the Franchise Oversight Board, stated that in the story. The interesting thing is that NYRA hired an independent accounting firm to oversee their finances. How did they miss this? And if they didn’t and informed NYRA of the error, then what? Very interested to see where the investigation goes.
Eric has a point. I, too, am interested to see where the dollars have been sitting/accumulating during the 15-month period.
Nick,
My reference had more to do with the editorial posture of the industry’s media organizations, not mainstream newspapers. I’m well aware of deadlines and space limitations of the latter, as is Rich Eng.
As stated above, I believe it started with the inability of those in charge to do their jobs and it has snowballed from there. Again, we will see what the investigation finds.
JP
24 Dec 2011 at 02:12 pm | #
Interesting thing about Mr. Megna being the one to come out with the story. One that a reporter (hint) might be interested in. Article 2, Section 212 of the State Racing Statutes define the duties of the Franchise Oversight Board. I think Mr. Megna is on the attack to take the heat off himself as his board was legally required to be looking at the finances. The Comptroller asked him what was going on (wonder who dropped the dime there as that office has been no friend to racing) and he continued the roll of poo downhill. I have no doubt some one will lose a job over this, but you willing to lay any wagers that it will be who actually was responsible?
24 Dec 2011 at 02:40 pm | #
I’m willing to lay a price that the fired party won’t be one who’s responsible, though that will depend on the findings.
There was more than one way to discover the error. In addition to the SRWB, FOB, the Comptroller’s Office, state legislature and an independent auditor, NYRA has its own integrity council. That’s six layers of “protection” for bettors.
But it’s interesting how this kind of story can elicit somewhat predictable reactions depending on the author (hint).
24 Dec 2011 at 06:29 pm | #
Actually what I want someone to say is that NYRA had to have lost money on this. I want to see a logically consistant argument for once. If takeout is too high, then a rise in takeout causes losses in profit. Is not this what we’ve been repeatedly told? But instead we’re told they made out on this deal. Can’t both be true. If what HANA has told us is true, then NYRA got hurt just as badly as the bettors by this, if not more. They would have wanted the takeout to come back down as quickly as possible, just like the players. Isn’t this the argument? Or do we simply only argue as if we are so badly treated bettors and ignore the facts?
24 Dec 2011 at 07:26 pm | #
Al is on to something...methinks Megna doeth protest too much. What “oversight” has he been providing exactly? When is the last time he was at one of the racetracks?
Also, I’ve done a little digging since my last post. The takeout increase in 2008 was at the behest of the OTBs, not NYRA. It was part of the “price” NYRA had to pay to get the new franchise. NYRA has not been in favor of increased takeout since the mid-90’s. Which brings me back to Mr. Kling - methink he doeth protest too much as well. Did Capital OTB know that the takeout for exotics was wrong? Did they not say anything because it was in their interest to keep the takeout high? I’d like the “investigation” to look at that question as well.
24 Dec 2011 at 10:57 pm | #
John & Staff:
Where would we be without the Horserace Insider? We’d be a lot less informed & stimulated by the coverage that you’ve provided. Thank you.
Merry Christmas!
Don Reed & Elena Geraci
24 Dec 2011 at 11:18 pm | #
Racing’s slogan: “Go Baby Go.”
NYRA’s Slogan: “Catch me if you can!”
Who cares if it was ineptitude or dishonesty. Again, a lot of social workers want to make excuses for the poor NYRA. Sure, it was an honest mistake. Those who would stick up for this organization (in any manner) obviously have a financial interest in doing so; the old don’t bite the handicapper that feeds you syndrome.
Query just how many other “inept” mistakes have been made that nobody ever hears about.
The last time I told the truth about the NYRA I was lambasted on this site.
The state of New York racing speaks for itself, THEY HAVE SUCKED THE LIFE OUT OF IT UNTIL THERE IS NO LONGER ANYTHING TO SUCK. WHAT’S A COUPLE OF PERCENTAGE POINTS AMONG FELLOW HANDICAPPERS? WHAT’S THE BIG DEAL? MAYBE THEY WILL OFFER FREE PARKING AND DOLLAR HOT DOG DAY TO MAKE UP FOR THE THEFT. A SIMPLE MISTAKE.
AS MUCH AS I LOVE THIS GAME, I DESPISE THE PERSONS WHO CONTINUE TO SHILL FOR THIS ORGANIZATION.
TTT
25 Dec 2011 at 07:46 am | #
Top Turf Teddy-You Got It Right. Most of the shills for the organization have a vested interest. They either work or have a relative who works for NYRA or they are trying to work for NYRA.
Otm Al-You are correct NYRA did not benefit from this. They would do better if the takeout was lower. What NYRA and all of the ADW’s involved did,though unintentional was steal money from bettors. It really doesn’t matter if they benefitted,they kept money that was not their’s to keep.
MY question to all is how come every time an error is made the bettor is always on the wrong side ?
As for NYRA, I have seen management try to do positives things,but with government involved it just does not seem possible.The customer service people have always been great,but to this day,I still don’t know who has the power to effect positive change in this game.
25 Dec 2011 at 08:26 am | #
“Stealing” is the point I’m trying to address and you’re still not quite there, but closer than most. If the 1% higher take cause profits to fall relative to the lower level, that means NYRA got less, so you can make exactly the same argument and say the higher rate cause money to be stolen from NYRA. The money NYRA got is exactly what they should have at the posetd rates. So how can you steal and yet have less than you started with?
Second, where did the money go? The answer to that is simple. It never existed in the pools. It was never bet in the first place if you believe the above argument. So it remains today in bettor’s pockets. So how can you steal if you never took it in the first place?
Finally theft involves deception. Rates were posted every day and players played at those rates. How is it theft if players knowinglyand willingly handed over their money at those rates?
25 Dec 2011 at 09:26 am | #
I agree NYRA got the money at the posted rates,but if you go to a store and there is a sale and you were charged regular price,chances are you will get the sale price . In this case you are not getting the sale price. I never said there was deception on anyone’s part,but the ADW did have money they were not entitled to. Whether because of the takeout rates NYRA or any of the ADW benefit is beside the point,an error was made and they kept money they were not entitled to. That is what is relevant,not anything else.
25 Dec 2011 at 10:33 am | #
My head hurts trying to figure this out. But one thing is for sure, if money was taken out of payouts incorrectly, a takeout reduction is not a remedy. A payout supplement on future winners is needed.
25 Dec 2011 at 02:40 pm | #
Just when I thought I had opened all my presents I come to HRI....First, Merry Christmas, John and all John’s readers, and thanks for this latest entry. It was one of your best. It expresses just the right amount of indignation, exasperation and pure wonderment.
Now to the real goodies. Al, I find it interesting that when the general public is ripped off once again by corporate malfeasance and the King of All Enablers, govermental/regulatory incompetence and/ or corruption, you take the opportunity to attack those who have been saying all along how clueless and anti-customer this un-thinking, un-changing monstrosity is. You do so by concocting an argument that you don’t even believe. That is, even you believe that excessive takeout reduces revenue. You won’t argue for 100, or 90, or 80% take. So what’s your number, Al? As to the specific question of whether NYRA benefitted in the short-run - who could possibly say. (In the long-run, barring fundamental change, it’s almost certainly another blow to NYRA and the industry as a whole. For, confidence and trust, while not easily monetized, are fundamental). To be clear, there is nothing in the theory of optimal takeout that says the relationship of takeout to revenue is a straight-line one, only that there is a certain point at which revenues are maximized...over a sufficiently long period of time. I could price $10 bottles of wine at $50 and sell one or two. I could then drop the price to $40 and sell the same amount. Does that make the proper price $50 because I made a larger profit than at $40? Of course not. The difference in revenue retention between 25 and 26% take on exotics is, of course, less clear. But even if NYRA did make more over those 15 months, and I’m sure the NYRA execs think they did (yes, I believe they knew what they were doing), that says nothing about the ultimate validity of optimal takeout.
Nick, NYRA knew and so did the Racing and Wagering Board. To care about the certainty of being exposed they would have to fear consequences. What consequences would they be? To not have known when they supposedly fought the increase initially, were completely pre-occuppied with revenues and expenses during the period, were contacted by at least one player a year ago about the matter as he discussed the discrepancy on a fairly popular on-line forum, while NYRA brass spoke about their desire to reduce takeout, etc, etc....to one with a handicapper’s mindset, an even money proposition, let alone the much longer shot you make it, it is not.
25 Dec 2011 at 05:29 pm | #
Dear kyle. Please take a basic course in economics and then we can discuss this. Since I used to teach these courses, it is clear to me that you don’t understand how these things work. My argument is very basic and very standard for any industry.
25 Dec 2011 at 05:47 pm | #
Anyone familiar with the principles of logical argument will recognize Al’s non-response as the logical fallacy of “argument by authority.” Those who aren’t, simply note that he failed to address my specific points in any way whatsoever.
25 Dec 2011 at 07:11 pm | #
Merry Christmas and Happy Holidays to all HRI bloggers and posters including OA whose relentless defense of NYRA under any circumstance has now gone indirect using arguments he conducts with himself.
From my perspective, neither NYRA nor the NYSRWB are as dysfunctionally destructive as the CHRB or as malevolent as the TOC in their mistreatment of horseplayers. I agree with those who say the blame is collectively owned by all three agencies and merits further investigation and castigation.
The only action to which I would apply New York racing customer time and energy is getting direct takeout lowered to at least compete with Kentucky. What is the economic justification for takeout of 24% for exotic wagers involving three or more horses on races in NY when it is “only” 19% in KY?
Please be so kind as to enlighten us, Professor.
25 Dec 2011 at 07:44 pm | #
Kyle; I’m with you, this isn’t about what the optimal takeout should be. This is the kind of stuff that, in normal situations, get’s people fired but for the NYRA apoligists, this is good news because...guess what...takeout is going down! We should all send a big thank you to them!
Does anybody think NYRA did this on purpose, knowing that they could repay this with slot money? Don’t know if the timeline fits but it is very hard to believe that this went unnoticed for 15 months.
Regardless, with all of the slot money pouring it, there is enough to cover up this and whatever else comes along.
BTW...Epix is showing non stop Bond movies...Merry Christmas!
25 Dec 2011 at 08:12 pm | #
Dear John:
Merry Xmas and Happy New Year!! As to NYRA’s role in this mess, there is NO excuse that can be offered which mitigates their guilt. For those customers who bet through ADWs, there is a viable remedy. However, just like those of us who are still waiting to collect on Allemeuse ( 25 years and running), there is no reasonable solution for making whole those bettors who bet through the old-fashioned method of buying a mutuel ticket.
As to an appropriate penalty, NYRA must be held to account. The FOB has the power to revoke NYRA’s franchise and there must be hearings to determine if this is the appropriate course of conduct. Moreover, the SRWB must similarly determine whether or not the NYRA should be licensed in NYS.
All of the chickens have come home to roost. The “theft” of 8.6 Million dollars, taken in consideration with the massive criminal conduct that resulted in the Federal indictment, unfortunately compels the result that NYRA is unfit to continue to administer thoroughbred racing in New York State.
25 Dec 2011 at 08:22 pm | #
Kyle, I didn’t answer you because you didn’t seem to ask a question other than what is optimal take. I don’t know and neither do you. What I can say is if the statement Mr. Megna made is true, that means that the increase in take caused an increase in profit. This implies that the take is too low. This is basic principles and a simple fact.
Your concepts as you discuss them are wrong. For example, you talk of revenue maximization. Do you understand that an otherwise profitable firm can maximize revenue and lose money? You need to look for profit maximization, not revenue maximization. You pricing concepts make no sense either. I stand by my statement that you need to learn your economic principles if you want to argue this point.
And gee Indolto, where have you been? I’m defending no one on this, which you should be able to see by reading what I’ve written. If you read this as an indirect argument, your rhetoric skills are on the wane. I’m arguing basic economic principles here.
Everyone knows this wasn’t right. (I put this by itself so you don’t think I’m making an indirect argument)
I’ve been aware of it for some time and didn’t understand why it wasn’t fixed, but never had the oportunity to ask when I was thinking about it. I do other things in my life so I don’t fixate on these issues every day. As I said to kyle, there is no justification for a take of 24% as it is sub-optimally too low if we are to believe what Mr. Megna said. Is it also possible that optimal take is different for different tracks? Not saying 19 or 24% is the right number for any bet, but can you honestly tell me you know the real answer to this? I know you do not. For that matter I’ve never had anyone prove to me the elasticity of demand for betting is elastic for the industry as a whole. It’s easy to believe (and appears to be true) for individual tracks, but that does not mean it is for the whole market. So the things that are being thrown around still have not been sufficiently proven and without that, NO ONE can give you the right answers on this.
If anyone hasn’t quite got it yet, I’m mocking those who believe 1) tracks would benefit by lowering take and 2) NYRA made money leaving the take as it was rather than lowering it. You are contradicting yourself if you hold these two positions. I’m also mocking Mr. Megna because his job was oversight of issues just such as this and he clearly blew it. I’m interested in what the full story is on this, but unlike most, I reserve judgement until I hear the facts, and there’s a lot of unanswered questions right now.
Yes, someone is to blame. Was it intentional? Maybe. If anything though, wouldn’t you think someone deserved to get fired because how much money he lost his own company before any of the penalties? And what penalties they are! If you beleive in lowering take, doesn’t the drop to 24% actually benefit NYRA? This is all a complete laugh to me and all you angry people make it even more humourous when you can’t keep your stories straight.
25 Dec 2011 at 08:29 pm | #
I take that last little bit back for Framarco. He’s onto something. Something certain politicians have been trying to accomplish since the franchise was awarded.Somehting casino money has upped the ante on. Doesn’t anyone else see something more than coincidence in timing here? Except if it happens, what you want to bet it means even more govt. control and less money going to racing? Be ware what ye wish, Brother Mark. Unintended consequence always waits around each choice.
25 Dec 2011 at 09:15 pm | #
What you are alll forgetting,
is NYRA gas slots NOW,
They don’t care about Horse Racing,
Horse Racing is a LOSE leader in there environment and nobody cares about it any more
Seen this over and over when a track gets SLUTS
25 Dec 2011 at 09:18 pm | #
Al,
Didn’t realize you had just jumped in at the quarter-pole one this one. To help you and others like you going forward on this, when discussion turns to optimal takeout and maximizing revenue the focus is a narrow one where revenue is the product of takeout times handle. Operating expenses, concessions, slots money, parking, admissions....none of that is considered. As to Megna suggesting NYRA “profitted” to the tune of $1 million (which I think is probably a very low estimate) he is just referencing what portion of the $8.6 million overcharge was retained by the Association.
26 Dec 2011 at 12:06 pm | #
Smarty Jones,
Sorry for the belated response to your comment. I’ve been completely away from the computer for a couple of days.
I haven’t had a chance to read all the comments made since yours or mine, so here is the short answer for now. If I should add more I will after I read the rest.
1) No, I don’t work for Capital OTB. I work for the Troy Record newspaper and am a self-employed private contractor. Capital does pay me for doing a TV show, but I am not an employee of the company.
2) Based on Capital’s handle and how much I get paid for doing the show, my share of the takeout overcharge over the last 15 months calculates out to about 5 cents. I’d be glad to refund it, just tell me to who.
3) I haven’t read any written rulings issued to NYRA by the SRWB. However, in-state simulcast sites like Capital, the other OTB corporations, Saratoga Harness, Finger Lakes, et al, should absolutely be required to refund their customers. I will certainly follow up to determine if that is going to be done. This should be a cut-and-dried issue. Refunds should be made.
4) Unfortunately, only a small portion of OTB handle goes through account wagering. Cash wagers will be impossible to track unless IRS forms were involved.
5) If you have followed my Record columns over the years you should know: a) I frequently write about takeout, and why it should be lowered, and, b) I have written several columns over the years taking OTB to task for not supporting takeout reduction.
You can check by going to the Record’s website and type my last name in the search box. Several hundred column links will come up. Happy reading.
6) The bottom line, however, is NYRA has the racing franchise and the state sets takeout rates. The onus was on them to lower the rate on the date set by law.
26 Dec 2011 at 12:11 pm | #
Nick, although we don’t always see eye-to-eye, your record of calling them as you see them is clear. All the best in the New Year.
TTT
26 Dec 2011 at 02:26 pm | #
Nick:
Thanks for providing, in your rebuttal, of writing that gets to the point. It was a pleasure to read. May your 2012 Xmas stocking be stuffed with cashed exactas!
26 Dec 2011 at 02:55 pm | #
Finally, we belatedly give thanks to the racing management idiots who sometime ago decided that live video coverage of NYRA racing would never be featured on the New Jersey Account Wagering network (to which my wife & I subscribe).
Reminder: NJAW Bettors (at home) have not seen a live NYRA race since Calvin Coolidge (Republican cigar-store Indian icon) was President.
“No live racing-no betting on the race” has been our general rule.
Result: Very few (if any) “Trifecta, Superfecta, Grand Slam, Pick 3, Pick 4, and Pick 6 wagers” on NYRA races have ever been bet, using our NJWA account.
Inadvertent Blessing: Guess who didn’t get screwed by the 26/24 Fiasco?
26 Dec 2011 at 03:07 pm | #
While on the subject of the NYRA, it will be interesting to see, now that the Trakus system is finally being instituted all over the country, whether or not the NYRA will be the last of the Mohicans; New York, the greatest City in the world...Shame on them.
TTT
26 Dec 2011 at 03:17 pm | #
saratogdon says: that John and I discussed this at length last year in 4-6 emails. Race tracks, even public ones,such as Churchill Downs, do not publish financial statements. You mistakenly thought you could find a statement detailing where the $ came from and how it is dispersed. I would say the State bears the fiduciary duty to publish such figures. We all know many of NYRA’s other escapades. I feel that the main isssue here is whether it was done with “ malice a fore thought”.
26 Dec 2011 at 05:43 pm | #
“Horseplayers… will be getting a 2% decrease in the takeout rate on trifectas [etc.].
“This reduction comes after it was discovered that NYRA had for 15 months been overcharging bettors by 2 percentage points on those wagers…
“This takeout reduction will be in place for 15 months.”
[Grening, DRF]
Vegas oddsmakers have refused to post future book odds on the possibility that…
On the day (15 months from now) that this takeout percentage is supposed to go UP by 1%…
NYRA will somehow make the same mistake twice & forget to RAISE it.
27 Dec 2011 at 10:47 am | #
Thanks all for the Christmas wishes, passion for the game and the kind words for HRI. We try.
Don, comments most welcome but please, in the age of LOL, IMO and BTW, do we need to save the five characters of Christmas? I know, “Xmas” has been around a lot longer. Maybe it’s me, but when I see it I cringe.
To all, again, NYRA can’t have its “license pulled” because it is a state “franchise,” not licensee. So the SRWB couldn’t do so if it wanted to. Perhaps the “franchise” should also be made to be licensed? Individuals are, as stated, but not the organization.
To all, I confess that as cyncical-with-cause that I try to be, I never thought of timing issue vis a vis when-and-if this “error” comes to light, we will have additional funds to make things right, so to speak. You people are good.
Al makes a good argument about lower takeout means lower revenue--but that’s only initially. Handle in relation to lowered takeout needs time to grow; in the short term only does revenue take a hit. Yes, the OTBs mostly were the impetus for takeout increases.
Indulto make the best point by asking the question “What is the justification for a 25% takeout when Kentucky gets by with “only” 19,” or words to that effect.
Initially, I believe it was the state alone who demanded that any pool which had three components, such as the trifecta, have a higher take because bettors who “won” more money could afford it--Never mind that bettors need to make a larger investment to give themselves a more reasonable chance of winning.
Myopia, at its best.
BTW: I, too, apologize for the delay. I think this was the first time in two days I returned to the computer. (Always try getting back to your lead).
Thanks all. A happy and healthy 2012--right up until 12.12.12. After that, we’re on our own I guess.
JP
27 Dec 2011 at 02:50 pm | #
JP: Agree wholeheartedly on “Xmas"(!)
My all-encompassing alibi is that I have had nothing to do with - and DETEST “LOL,” etc., the simple enunciations of which should trigger a life-sentence for Lindsay Lohan & all off her ilk.
If all our cel phones, etc. (devices invented so that people do not have to actually face the other person) disappeared tomorrow morning, every tinge of cynicism currently holding sway in my person would vanish, gladly, miraculously.
This would not be a bad deal, and would beat 37-41 miles-per-gallon on the highway, which is always a major consideration.
Happy New Year!
27 Dec 2011 at 08:56 pm | #
“If anyone hasn’t quite got it yet, I’m mocking those who believe 1) tracks would benefit by lowering take and 2) NYRA made money leaving the take as it was rather than lowering it.”
Professor, are you as interested as I am in what Barry Schwartz believes regarding #2? Do you have the access to find out?
28 Dec 2011 at 04:32 pm | #
Nick, I appreciate the candor and tone of your response, but you did not answer many of my questions. You can say you are just an “independent contractor” of Capital OTB, but you are the public face of that organization and as such I think you represent more than you are acknowledging. My outrage at your comments was ignited by your total focus on NYRA. Yes - NYRA should have caught this, but the point is that nobody caught it, and in my mind that mitigates NYRA’s mistake to some extent. The conspiracies on this blog that NYRA did this by design can only be true if the State and the OTBs were complicit. Since the State and the OTBs cannot agree on what day it is, I find this a little silly. Again, my questions were as follows:
Did Capital OTB not charge the same too-high exotic takeout?
Does Capital OTB not have a cadre of lawyers and accountants?
Do they not track their business?
Do they not know how much they are supposed to be charging their customers?
Has Capital OTB owned up to the mistake like NYRA has?
Has Capital OTB presented a plan for reimbursing its customers like NYRA has?
Again, as the paid “face” of Capital OTB, you might see why it would be appropriate for you to have some answers to these questions.
It’s easy to say the buck stops with NYRA, but the majority of the “bucks” went into the pockets of the OTBs and ADWs - like Capital OTB. That’s my point. NYRA’s at fault, but they are far from being alone in that regard.
28 Dec 2011 at 05:26 pm | #
Smarty Jones,
To his credit, NYRA President & CEO Charley Hayward has taken responsibility for the takeout blunder. The DRF article attached below contains his comments to Dave Grening and answers many of your questions.
As you will discover in reading the article, Capital OTB & the other OTBs have been instructed to refund the money in the same manner as NYRA. As my previous comment said, this was a no-brainer.
The short answer to your OTB question is yes, Capital OTB, like every other simulcast site in the nation which took NYRA racing, benefited from the takeout overcharge.
Again, as you will discover in the DRF article, Capital’s contract with NYRA was approved as correct and proper by the NYSRWB. I’d suggest it is to the latter, besides NYRA, to whom your ire should be directed.
Blaming Capital OTB and the other simulcast outlets for the too high takeout is akin to blaming your accountant for the rates which apply to your income tax. Tax rates are set by Congress and administered by the IRS.
http://www.drf.com/news/nyras-hayward-says-takeout-reduction-permanent
28 Dec 2011 at 05:41 pm | #
Smarty and Nick:
There is a lot of blame to go around. I tend to put NYRA at the top of the heap. While other agencies and parties should have noticed the mistake, it was NYRA that actually committed the error and to my way of thinking, deserves the majority of the flak.
Pete