Friday, January 15, 2010

Racing’s Problems Effecting Quality of Life in New York State

SARATOGA SPRINGS, NY, January 15, 2010--The thoroughbred industry downstate from here is now in its ninth year of waiting for the state to approve a licensed franchisee for a Video Lottery Terminal operation at Aqueduct Racetrack .

Since racetracks were granted approval for VLTs, Finger Lakes, a thoroughbred track in upstate Canandaigua, and Saratoga Gaming and Raceway and Empire Gaming and Raceway at Yonkers Raceway, have done very well. Purses are up in all locations.

What has happened in regard to the Aqueduct scenario has been well documented. The situation has been described as, in the most charitable terms possible, highly irresponsible. In the vernacular, it’s unethical, criminal.

In the same week Gov. David Paterson gave a State of the State address calling for stricter ethics rules, the president of the New York City Off-Track Betting Corporation announced plans for a new business model--if only it were given an opportunity to pay its bills based on net receipts, not gross revenues.

Before thinking “yeah, that’ll work and who do they think they‘re kidding,” never underestimate what can happen when one government agency works with another to solve a mutual problem.

After NYC OTB made its pitch before a joint Senate and Assembly hearing board, the president of the New York Racing Association called for an NYC-OTB-NYRA merger, under the track’s control.

Downstate, where I was born and lived most of my life, they have a word for both proposals. That word is chutzpah, which the dictionary defines as impudent rudeness or lack of respect. Either way, the odds that this parlay would work as presently constructed are extremely high.

The New York legislature’s unconscionable foot-dragging borders on the criminal for the harm it has caused the state’s taxpayers. The lawmakers are, by definition, a “citizen legislature,” part-time lawmakers entitled to have other sources of income.

Talk about a model rife with temptation for conflict.

Anyway, members of both houses were on local network news Wednesday night proudly announcing how they had passed ethics reform legislation, the first step in a long process. On the long process part I would bet.

Gov. Paterson didn’t necessarily agree, calling it “window dressing in an election year,” because it didn’t address two significant issues: campaign finance reform and term limits.

The logjam that is Albany politics would benefit from the imposition of term limits, an excellent idea on a national level, come to think of it.

It certainly would have been a good idea in the matter of recently convicted Senate Majority Leader Joseph Bruno, R-Saratoga, once the most powerful figure in state politics. Ironically, the VLT issue just might have been settled by now if he were still in power.

Term limits would have worked nicely in the case of House Leader Sheldon Silver, too, a Democrat who has played obstructionist-in-chief during the VLT discussions.

The inefficiency which is the current NYC OTB model has been so well documented as to become legendary. The NYRA, which volunteered to take over their operations, has been only slightly less so, and far less transparent.

Only recently did it grudgingly surrender its books to the state comptroller’s office. Until then, the association wasn’t doing a very good job of living up to the spirit of the agreement it made with state government.

New York State extended the NYRA franchise and gave it $105 million to emerge from bankruptcy protection. In return it gave title of its three racetrack properties to the State. But the state never did make it possible for VLTs to be up and running in 2009, as was part of the agreement.

There’s no shortage of black hats here.

But the VLT impasse is more than about dollars and cents. As with all gambling revenue, declines have a negative effect on education funding. Moreover, declining gaming revenues adversely impacts the quality of life and topographical character of the state itself.

VLTs is also about the preservation of the green space made possible by New York State breeding program.

There are approximately 400 breeding farms in the state but, as a result of falling purse revenues from declining handle and NYC-OTB’s inefficiency, the NYS Breeding Fund is owed $1.8 million by NYC OTB, and the figure keeps growing.

Resultantly, 21 breeding farms have been closed, including two of the state’s three largest commercial breeders, Sequel and Sez Who Farms. The estimate of farms that have moved breeding operations to VLT-enriched Pennsylvania ranges from 12 to 15 percent.

Foal size, which reached its zenith in 2004, has been reduced by 21 percent. Last year, there were 3,302 mares bred, producing 2,209 foals.

A crop reduced by one in every five horses foaled just five years ago will have a dramatic effect on field size this year and beyond, continuing racing’s downward handle spiral. The situation might not be as dire as Kentucky’s, but wait five minutes.

Even if overall simulcast handle on New York racing grows, and online wagering suddenly goes through the roof, it will not provide relief for the current situation. The New York breeders’ share of simulcast revenue is zero.

All these machinations that make up the state of the game in 2010 begins and ends in Albany. And the issue is greater than only the state of the industry. The entire population of New York has a vested interest in VLTs.

It’s way past time for the Governor and Legislature to agree on a slots operator for Aqueduct so that building can begin immediately. There’s just too much riding on the outcome.

Written by John Pricci

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Friday, January 01, 2010

Meet the New Year, Same As the Old Year

Saratoga Springs, NY, December 31, 2009--It’s the end of the year, the end of a decade Time magazine called “The Decade from Hell.”

As for the last year, 73 percent of all Americans said in a recent poll that it was a bad year for the country. Remarkably, 72 percent said they were optimistic about 2010. Based on what, exactly? That things can’t get worse?

Be cautioned that that last rationalization might fall into the “careful what you wish for” category. Sadly, in fact, it might apply more meaningfully in the case of the racing industry.

With the exception of two remarkable female equines that helped elevate the sport back into the consciousness of mainstream news and sports organizations, what is there to feel optimistic about, especially as it concerns the thoroughbred sport?

Politicians have raised the level of contributions they accept from vested individuals and/or organizations to shameless proportions. Today, “the loyal opposition” means no anything that might benefit the citizenry. If it helps the party, fine.

On the other side of the aisle, meanwhile, they like to believe that they’re taking the high road, or are making chess-like two-moves-ahead decisions. The result has added up to a big, fat zero for its constituents and American public alike.

Aside from a healthy Horse of the Year debate, the only positive the industry can point to is the continued growth of the Advance Deposit Wagering market.

ADWs, of course, comes with a sword that cut both ways. Someday they will be the source of measurable growth. Until then, online betting platforms will continue to cannibalize a market currently in double-digit decline as convenience will continue to trump real engagement.

Racetracks used to be fun, and can again be places of social, intellectual, and occasional monetary reward. And it’s not so much that this lesson is lost on anyone as an entertainment option.

It’s that no one in the industry has any idea how to send an effective memo to the masses.

You might recall that in November, on Thanksgiving, we reprinted the uplifting tome of Max Ehrmann, originally written in that period in the last century referred to as “The Roaring Twenties.”

Appropriate that this decade in some quarters should be referred to as “The Naughties.”

Exactly right for a decade that was, on balance, good for nothing.

Today, with a little help from the good folks at the National Lampoon, a spin on Ehrmann’s encouraging words that lend a far different, albeit realistic world view attitude; a measure of how things are, not the way we wish they were.

The following, then, is fair warning for the new year contained in an abridged version of a piece the Lampoon calls “Deteriorata.”


“…Go placidly amidst the noise and waste, and remember what comfort there may be in owning a piece thereof.

“Avoid quiet and passive persons, unless you are in need of sleep.

“Rotate your tires.

“Speak glowingly of those greater than yourself; and heed well their advice, even though they be turkeys.

“Know what to kiss - and when.

“Consider that two wrongs never make a right, but that three do.

“Wherever possible, put people on hold.

“Be comforted that in the face of all irridity and disillusionment, and despite the changing fortunes of time, there is always a big future in computer maintenance.

“…Whether you can hear it or not, the universe is laughing behind your back.

“Remember the Pueblo.

“Strive at all times to bend, fold, spindle, and mutilate.

“Know yourself. If you need help, call the FBI.

“Exercise caution in your daily affairs, especially with those persons closest to you... that lemon on your left, for instance.

“Be assured that a walk through the seas of most souls would scarcely get your feet wet.

“Fall not in love therefore; it will stick to your face.

“Gracefully surrender the things of youth: the birds, clean air, tuna, Taiwan - and let not the sands of time get in your lunch.

“For a good time, call 606-4311, ask for Ken.

“Take heart in the deepening gloom that your dog is finally getting enough cheese.

“And reflect that whatever misfortune may be your lot, it could only be worse in Milwaukee.

“…Whether you can hear it or not, the universe is laughing behind your back.

“Therefore, make peace with your god, whatever you perceive him to be: hairy thunderer or cosmic muffin.

“With all its hopes, dreams, promises and urban renewal, the world continues to deteriorate.

“Give up.”

Sound advice, until tomorrow that is, when the Count Fleet Stakes, the first Kentucky Derby prep of the 2010 season, will be run at Aqueduct Racetrack.

Written by John Pricci

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Friday, December 18, 2009

Maryland Racing Needs Grass Roots Support Right Now

SARATOGA SPRINGS, NY, December 17, 2009--For those racing fans in and around the Beltway, you need to show your support for Maryland racing. And how can citizens of the Old Line State accomplish that?

By showing up at Laurel Park tomorrow and lending your support to the people who put on the show who will be demonstrating at a rally inside the paddock.

There is certain to be media coverage expected so help Laurel out by providing some bodies for whatever photo or electronic opportunities that may develop. Arrive before noon and the admission is free.

At the beginning of this decade, I could never conceive that I’d be writing a story like this about a state that plays host to the second jewel of a Triple Crown, but here it is.

Almost makes you happy that Jim McKay wasn’t around to see this, although I’m probably wrong about that. Given McKay’s character, popularity, charisma and appreciation of history, he might have made a difference.

The skinny is this: Laurel is scheduled to be auctioned on January 8, but on Monday the Anne Arundel County Council will vote on whether to approve zoning for slots at nearby Arundel Mills Mall.

If approval is granted, Laurel Park's property value will sink like a stone. The most likely buyers in that case would be housing or commercial developers, not people or organizations interested in thoroughbred racing’s survival.

At issue are county council members who say that they would like to have slots at Laurel, but that’s not the topic on the table.

This week, council members were no-shows at a Maryland Jockey Club function that presented architectural plans, environmental and grading permits and a timetable demonstrating Laurel’s new licensed owners could have VLTs revenue flowing in less than a year. It would take Mall interests over four years just to secure the permits.

Isn’t it interesting that the notion of VLT revenues, long needed by Maryland to compete with circuits in surrounding states, took so long to gain approval because of protests by anti-gambling factions, but suddenly is now OK for mass consumption?

It’s OK when money might be made available to deep-pocketed developers and speculators to further their interests with lawmakers. And it’s no problem if gaming facilities were within eyeshot of children shopping at Toys R Us with mommy.

How America works these days is all so ugly, whether the issue is health care for human beings or whether people in other racing states can burn while governors and legislators fiddle with their futures--think New York, home of the third jewel, where services are being cut because in part a suitable VLT operator can’t be found in eight years.

There’s only one word for all of it: Criminal.

In Maryland’s case, racing interests are seeking a NO vote from county council members so that the state’s Lottery Commission can reopen bidding for a VLT license after new owners take over Laurel Park. Waiting three weeks doesn’t seem like a lot to ask.

Maryland racing began in the county in which Laurel resides. But what can anyone reasonably expect from a local government that puts the kibosh on a State Horse Park; green space, quality of rural life, and animals be damned.

Maryland voters gave permission for VLTs because they were told the license would go to an existing racetrack, namely Laurel Park. The track’s plan, eight years in the making, has the approval and support from a community that has indicated it doesn‘t want slots at Arundel Mills Mall for various reasons.

But it appears some members of the council want to rush for a Monday vote rather than wait until Laurel is sold just like, for instance, the current administration in Washington, for which I voted, wants a health care passed by Christmas for no good reason.

According to the latest statistics provided by the MJC, horse racing and breeding account for 15,000 jobs within the state having an economic impact of $1.5 billion, making it Maryland’s third largest industry. And the only American racetrack older than historic Pimlico is Saratoga.

Some would argue that this down-to-the-wire emergency could have been avoidable had Laurel Park submitted a required $28 million licensing fee application last February.

It didn’t because it was unable to receive a guarantee that the fee would be refunded in the event Laurel failed to receive a zoning permit. That’s one deal Frank Stronach can’t be blamed for taking a pass.

The reality is that Magna Entertainment overpaid for the tracks because it believed VLTs would become a reality. That timing was too late to help Stronach. But there’s no good reason why some capricious deadline has to be too late for Maryland, not after more than three centuries of racing has become part of the fabric.

Written by John Pricci

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