Friday, June 25, 2010
Albany Foot Dragging Could Render Gaming in New York Irrelevant
SARATOGA SPRINGS, NY, June 24, 2010--This community dodged a bullet recently when the New York Racing Association was extended a state loan against future VLT revenue, the absence of which would have resulted in shuttering the tracks for lack of funds.
Of course, it was not a bailout, but money they had coming from New York State in the exchange for turning over the deeds to their three racetrack properties, the terms for which spelled out clearly in the franchise agreement of 2008.
Meanwhile, Saratoga Gaming & Raceway, a.k.a. “the harness track,” a highly successful venue since VLTs transformed the property into a regional and destination attraction, is facing a threat from without, the construction of a full-scale casino in the Berkshires of Western Massachusetts.
Saratoga Springs is located about 40 minutes to the north by car via Northway Route 87 from the state capital; the Berkshires are a little farther in another direction but is easily accessible via I-90 East from Albany.
The larger issue is that while Saratoga has close to 1,800 VLTs, Massachusetts would offer a full complement of table games.
"I'll see your big apple and raise you two oranges."
The highly successful Connecticut-based Mohegan Sun is mindful of a threat to its own operations, electing to get into Massachusetts gaming on the ground floor by building a casino near Springfield, one of three slated for the Bay State.
While there was some discussion at to when New York State might establish full-scale casino operations, there wasn’t a lot of confidence expressed at this week’s New York Gaming Summit that it would happen anytime soon.
New York legislators have not even written statutes permitting electronic table games, saying that since existing laws do not expressly forbid it, operators could proceed as they wish. However, gaming operators have been reticent to invest in any project on the basis of tacit approval.
An expansion of full scale gaming can’t happen until an amendment is written into the state constitution, a long, arduous and multi-layered process. So, until a Constitutional Convention is called, that won’t happen anytime soon, either.
At present, Senator Charles Schumer and State Attorney General Andrew Cuomo, the odds-on favorite to be New York’s next Governor, seem to favor expanded gaming.
Schumer has publicly made comments in support of casinos for the Catskills region while Cuomo, in a 237-page position paper, stated that he wants a comprehensive review of how all gaming in the state is conducted.
While New York needs to collect vast revenue to close its enormous budget gap by any means necessary, the audience at the recent New York Gaming Summit were told not to have confidence that expanded gaming would happen in the near future.
While full scale casino operations are perceived to be a relatively harmless way to collect badly needed revenue without burdening all of the state’s citizenry, Gaming Summit attendees were warned that economics wasn’t the only consideration with respect to expansion.
James Featherstonhaugh, a high powered, corporate litigator and partner in the Albany Law firm of Featherstonhaugh, Wiley and Clyne, LLP, was instrumental in the adoption of the state’s racino legislation and is part owner of Saratoga Gaming & Raceway.
At Tuesday’s conference, Featherstonhaugh counseled that competition among gaming operators was fierce, and that policy issues and morality were also considerations. In other words, politics would decide whether or not expanded gaming would happen in New York.
“I think there are going to be some major changes in the way gaming is looked at,” Featherstonhaugh said during the Politics and the Law segment. "The next governor wants to make a comprehensive review of gaming as a whole, including possibly a constitutional convention that could lead to full-scale casinos.”
While New York dithers about what it wants to do, Pennsylvania will introduce full table games next month and voters in Maine will decide on casinos via referendum this November.
But for New York, and especially Saratoga Gaming & Raceway, the threat is more menacing. When Massachusetts comes on line, it will be able to offer not only a full compliment of gaming but can spend more on its customers via player rewards programs.
Why? Because the tax rate in Massachusetts for a full-scale casino is 25 percent compared to New York’s 50 percent rate on video lottery terminals. In the long run, which state would be in the best position to succeed?
Written by John Pricci
Friday, June 18, 2010
What’s Working, What’s Not, and What Will New York Choose?
SARATOGA SPRINGS, NY, June 17, 2010--As of 10:26 AM this morning, as I clicked on the Equidaily web-site, three of the top-section story-links posted focused on the recent news out of Southern California and South Jersey.
And the differences between them were as wide as the distance between the East and West coasts of this great natural resource called America…before one of the multi-nationals began befouling it, that is.
The experiment at Monmouth Park this summer was the clearest example of how less can mean more, how the absence of something makes the heart and, by extension, the wallet, long for it even more.
However, the less-is-more concept at Hollywood Park and Buellton, California were, unfortunately, examples of how less should be taken quite literally, and where, for the moment anyway, bad news is the only thing that California racing has in abundance, the big mare notwithstanding.
Live racing was canceled at the Inglewood track for the second time this year due to insufficient entries. According to a Daily Racing Form story, officials were “guardedly optimistic” that they can complete the spring-summer meet that ends July 18 without losing another day of live sport.
Meanwhile, 125 miles to the north and west, up the majestic California coast line from Hollywood Park, Marty and Pam Wygod decided to shut down their River Edge Farm and move their entire breeding operation to Kentucky. Resultantly, 110 head, including 50 broodmares, will be sold at auction later this year.
What does that say about the present and future state of the game in the Golden State when California’s leading breeders for three straight years, 2006 through 2008, decide to take up stakes and get out of Dodge?
Wygod was one of the first computer whiz kids in the early 1970s who took an interest in racing while living in the New York metropolitan area. He developed a friendship with noted handicapper Mannie Kalish of the New York Post who introduced him to trainer Victor ‘Lefty’ Nickerson.
Nickerson, who mentored two California-based Hall of Fame horsemen, Ron McAnally and Richard Mandella, began training horses for the Wygods. Later, Wygod would start a new life in California, where he devoted his attention to racing and breeding full time.
Nickerson died six years ago and is best remembered, of course, as the developer of the great John Henry, whose reputation turned to legend soon after owner Sam Rubin moved the remarkable gelding to the Southern California circuit from New York.
Nickerson recommended to Rubin that McAnally should be ‘John‘s’ new full time trainer. Nickerson remained the trainer of record whenever the gelding would ship back to New York for occasional stakes foray.
Explaining his decision, Wygod told the DRF that “we’re going to focus on breeding in Kentucky. That’s where the top end of our stallions and broodmares [including 2009 Broodmare of the Year Sweet Life] are. We just reached a point after 35 years that it made sense to focus our interests there.”
Three of River Edge Farm’s four stallions, Bertrando, Benchmark, and Tribal Rule presently rank among California’s top seven sires. A fourth, Dixie Chatter, stood his first season this year.
As California breeders, the Wygods bred stakes winner Pirate's Bounty, later the state’s leading sire three times, producing 63 stakes winners, 44 of them born at the Wygod’s nursery.
Replicating a scenario that’s currently being played out in New York because of bureaucratic bungling in the Empire State, California is about to lose a breeding operation it can ill afford, such is the state of California racing.
At Hollywood Park, temporarily granted a reprieve from the shopping mall developers because of the current deep recession, the bad beats continue. Lopping off a handful of days at the beginning and end of the current race meet hasn’t worked because of a circuit-wide horse shortage.
“We thought we cut enough but maybe we didn’t,” Eual Wyatt Jr., vice president and general manager of Hollywood Park, explained this week. Despite the loss of two live racing days, two race-weeks shortened to four days, and eight-race programs, field sized has dropped, albeit marginally, to 7.86 runners per race.
A total of 49 horses raced on Wednesday’s eight-race program, attracting handle of $4,623,846 from all sources which, in better times, is the equivalent of a three-day Pick 6 carryover pool. Tonight’s popular evening program has drawn only 69 horses into the body of eight races.
This current reality is playing out against a backdrop of financial catastrophe in the state and the uncertainty of what will happen to date as a result of landlord Santa Anita kicking the Oak Tree Racing Association session out onto W. Huntington Drive.
By severely cutting back dates at Monmouth Park this summer, attendance there has increased nearly 21 percent over comparable 2009 dates through the first 11 days of racing. While it is far too early to tell whether the Monmouth’s success will extend through the balance of 2010, trends clearly are headed in the right direction.
Of greater import perhaps is the notion that the current perception of New Jersey racing is positive, not the doom and gloom being played out virtually everywhere else.
Whether or not perception is
reality in this scenario, the shift of focus has created buzz. And if the current scene in New Jersey ever becomes reality nationwide, the mainstream might change its perception that racing is a dead sport.
Even with nationwide handle off 10 percent this year, the bottom line is that $12 billion will be pushed through the parimutuel pools by New Year‘s Day. That’s a number that cannot be ignored in today's economy.
The only way to change negative perception is to create a new one. Next week in Tarrytown, New York, a Gaming Summit will host industry leaders from throughout the state.
The keynote speaker will be Jeff Gural, prominent realtor, owner of Vernon Downs and Tioga racetracks, and part of a group with SL Green Realty Trust and Hardrock Entertainment bidding for the VLT franchise at Aqueduct.
Gural’s philosophy is that there’s too much racing, that other sports have seasonality, and that tracks like Saratoga work because it’s fun to go racing there. Among the topics on the agenda is “The Troubled State of Horse Racing and Off-track Betting in New York.” Good or bad, there will be no shortage of examples.
Written by John Pricci
Friday, June 11, 2010
New York Horsemen Term Detention Barn a Failed Strategy
SARATOGA SPRINGS, NY, June 10, 2010--The time has come for the detention barn at New York Racing Association tracks to be eliminated. It’s a huge unnecessary expense that has more to do with image than reality.
The detention barn has proven a hardship to horseman, an unnecessary expense, has been bad for NYRA’s business, and has been an ineffective deterrent in relation to what was expected. That is the consensus opinion of a dozen New York-based horsemen we spoke with this week, an opinion that is also shared here.
Before communicating some of their thoughts--we spoke with a half dozen trainers in Saratoga this week whose horses in 2009 alone earned $38,949,766 and several more downstate by telephone. Before sharing those observations, some historical background.
Following an investigation initiated by the indictment of two mid-management executives and four mutuel clerks in December 2003, the New York Racing Association was ordered to pay a $3-million fine after pleading guilty to felony charges of money laundering and racketeering.
Further, it had to allow the U.S. Attorney to appoint an Independent Monitor to oversee its operations under the terms of a Deferred Prosecution Agreement and was required to restructure its senior management and six departments within the company. During this time period, then NYRA President Kenny Noe Jr. retired to his South Florida home.
Neil Getnick was appointed Independent Monitor and rather than concentrate on money laundering and racketeering charges, he focused instead on backstretch issues. Resultantly, security was tightened to absurd levels, that overkill including the detention barn concept. After the DPA period ended, Getnick’s law firm was hired by the NYRA for five years at $1.5 million per year.
All this occurred at a time when the NYRA franchise was about to expire and, with Getnick‘s oversight, it embarked on an integrity campaign that included the use of a detention barn.
This enhancement of image, along with agreeing to end its longstanding ownership claims to its three racetrack properties, resulted in NYRA having its franchise extended for 25 years, from September 12, 2008 forward. It also received $110 million to operate from the state until the installation of VLTs, originally expected to be on line by 2009.
The detention barn is operated by NYRA security and Getnick personnel and has been, on balance, a failure. Milkshaking, one of the major reasons it was instituted, is no longer done by tubing but by the injection of alkalizing agents at concentrated levels to achieve the desired effect.
Publicly, the detention barn to date has stopped two trainers in three years; one is a bad actor currently in jail; the other, with a record of medication abuses, stupidly entered the off-limits area and administered what he called a cough medication to one of his entrants via a dosing syringe. Subsequently, he was banned from racing at NYRA tracks for six months.
NYRA has continued to trade on the integrity issue via the detention barn scenario and has continued to pay the Getnick firm exorbitant fees for its contributions in helping NYRA retain and extend its franchise. With one exception, every horsemen we spoke with believes that the playing field still isn’t level, as some trainers continue to win at abnormally high rates.
In order to receive honest feedback from horsemen, free of recrimination and without fear of damage to their livelihood and those of backstretch workers, we allowed trainers to speak with HorseRaceInsider off the record.
“You don’t need a detention barn to detect milkshaking,” said one trainer. “At Keeneland they have a simple pre-race test they take about 40 minutes before a race.”
“It’s 50-50 whether it does any good at all and 50-50 that a horse will leave his race there. And let’s not forget that NYRA got us into this in the first place,” said another trainer before driving off.
“For stakes horses shipping in, they first go to a receiving barn then the detention barn,” said another. “You have to move twice. It’s easy o understand why a lot of trainers don’t want to ship their good horses here. Today you can race for good money almost anywhere.”
“I feel bad for the owners,” said yet another. “I have to pass along the costs to them after absorbing some of it myself. And I’m not sure it’s much of a deterrent. If you want to cheat, you can always find a way.”
Only one trainer we spoke with thinks it works. “It costs me about $100 per horse in added expense and I started 400 horses last year. But I feel a little better knowing that [the detention barn] is there.”
“When it first began two years ago, I was a hundred percent for it,” said one world class horseman. “But now I wouldn’t support it because it’s been ineffective. it’s not fair to bettors because a lot of horses don’t handle the move well.
“I asked a gambler I know ‘how many big bettors do you know who believe that some very successful trainers have an edge? All of them,’ he said.”
“When I run out of town and I’m running on horse on Lasix, I have to be there four hours in advance. Here it’s a lot longer. If you’re shipping in and running in the first race, you have to leave at about two o’clock in the morning.
“And they’re strict about it. You have to be in the detention barn for six hours. If you’re just one minute late,” holding up his index finger, “it’s a $500 fine.”
The detention barn then is a structure that says about NYRA: “See, we’re good citizens and we’re doing all we can.” The only ones who believe that are non-savvy politicians who almost ran New York racing completely into the ground with their draconian rules, institutionalized indifference and lack of vision.
Here’s one crude idea that would save the association [and taxpayers] millions every year, act as a more effective deterrent, wouldn’t punish horsemen logistically or economically and help insure that horses will perform without undue compromise to their established form.
How about the installation of small web-cams in each corner of every barn and in other strategic areas of the shedrow and have security personnel observe a bank of TV monitors a la the casino eye-in-the-sky model?
Then, when an egregious form reversal is observed empirically--even after the fact-- there would be video of the culprit doing the deed. If video cams are good enough for banks, large convenience stores, and the like, it should be good enough for the barn area.
With the money the NYRA will save by not paying the firm Getnick and Getnick for questionable services that are inefficient at best, they might be able to save some of their own employees from the unemployment lines. They might even save enough to allow the air conditioning to be turned back on in those brick structures that house backstretch workers on the Oklahoma training track.
Written by John Pricci