Letter from the President, Fall, 2012
October 26, 2012
Before Genting's Resorts World New York Casino at Aqueduct Racetrack had even celebrated its first birthday, there was a rush to gauge the impact that VLT revenue has had on Thoroughbred racing in New York. The immediate impact has, in fact, been significant, as the numbers detailed on the front page of our fall newsletter demonstrate.
Unfortunately, it seems that the sole metric used in many circles to determine whether or not gaming revenue is having a positive effect on New York's Thoroughbred industry is the handle figures from the NYRA tracks. That methodology is not only simplistic, it is short-sighted and totally misleading. Handle cannot be the only tool used to define the health of our industry.
Over the summer, and seemingly at every Franchise Oversight Board meeting, the handle figures were examined as if they were the only barometer available to judge the impact of VLT revenue. The debate did not have the benefit of benchmarks or expectations set beforehand, so the naysayers could declare that any increases realized in the handle this year were insufficient, and these assessments began less than a year after the VLT facility was in full swing.
More importantly, the critics who have limited their evaluation to this one metric ignore many factors vital to the bigger picture, factors that are much more significant, if not as easily quantified as the daily churn.
The first, and arguably the most powerful, measurement we should be using is jobs. As our Economic Impact Study unveiled, for every 10 racehorses in New York, there are eight full-time jobs created. If the racehorse population increases just 10%, or 2,300 horses, that would mean more than 1,800 new jobs for New York. Because every racehorse brings with it $92,100 in economic impact, that 10% boost would impact our State's economy to the tune of $211.6 million.
Putting that aside, using handle as the only barometer is simply bad business. It could virtually freeze innovation in New York racing--whether that is experimenting with the number of racing days, or with the number of races on a card. If the result of innovation results in a temporary reduction in handle, you end up penalizing those who want to try something new. That's not healthy, and it's the surest way to the same old, same old.
Using handle as the only tool to evaluate the health of New York racing could also penalize us for making our sport safer for the horses and the riders. We will almost certainly see a negative impact on the handle this winter because of the medication reforms we have recently adopted. This is most certainly not to knock those reforms. NYTHA has been advocating for change and supports the new rules. But you have to be realistic about the ripple effect. New York horse racing will provide a safer platform for our horses and riders, but horses shipping in to race from out of state may well be in short supply. Until surrounding states adopt similar if not identical withdrawal times, the decision to race in New York must be made three weeks before the race, and not at the time of entry. There is no doubt that field size will take a hit, and smaller fields produce less handle. Should we be open to criticism for offering a safer environment? Will critics point to any decrease in handle as evidence that gaming revenue is not having a positive effect, while turning a blind eye to the cost of our safety measures? That's ridiculous. There is no better way to invest our revenue than in the safety and welfare of our athletes.
Quality is also a metric that can be hard to define, but has to be a piece in the evaluation puzzle. It takes time to raise the bar. People have to trust that the new standard is here to stay, that purse levels will be maintained and that the better races will fill, before they commit fully to raising the standard of their stables.
Also factoring into the equation are the capital improvements that the influx of revenue will provide for at all three NYRA tracks. They don't happen overnight. Saratoga is a special place, but making improvements to the seating and especially the dining areas can only add to its attraction, and to the meet's bottom line. The sports bar in the works for Aqueduct will do wonders for the Big A experience and is expected to pay for itself in just three years. But not overnight.
It takes time for investments to prove profitable. With the influx of gaming revenue, we have the opportunity to offer the best, and the safest, horse racing in America, while creating jobs and pumping up the economy in the state. There are any number of ways to measure the impact that gaming revenue has on Thoroughbred racing in New York. We can't be like the blind men describing the elephant in the parable...we have to look at the entire animal to know just how impressive the picture really is.
Rick Violette Jr.