by Tom Precious
The New York Racing Association predicted the size of fields at its tracks could grow by an average of one-half to one horse per race in the coming year thanks to higher purses from the new video lottery terminal casino at Aqueduct.
NYRA officials Dec. 19 told a state oversight panel they expect $93 million in gross VLT revenue from the casino and a 30% hike in purses–drawing more owners and trainers to NYRA tracks.
"All of a sudden the circuit for Triple Crown races will stay in New York," NYRA president and chief executive officer Charles Hayward said.
The rosier-than-usual presentation to the Franchise Oversight Board, created several years ago to monitor NYRA’s finances, included another prediction by NYRA officials that 2012 will also produce a fiscal year in the black. Ellen McClain, chief operating officer for NYRA, said VLT revenue will have a "notable impact" on operations in the coming year.
"We do think that with this increase in purses it makes NYRA extremely competitive, and we can compete for those horsemen and attract them here," she told the oversight panel.
Officials said they could easily project the average race field size will grow by one horse, but were more conservative–one-half horse–in planning the 2012 budget. "We’re in unchartered waters here," Hayward said.
NYRA officials later said the projection would take the 2011 average race field from eight entries to 8.5 in 2012.
After years of losses, including again in 2011 with slightly more than $8 million in red ink, NYRA officials said they expect about $2 million in net racing income in 2012 on gross revenue of about $275 million. Hayward sought to emphasize that the better fiscal health stems from NYRA’s racing operations and does not include money it will be getting from the VLT facility.
The $93 million in gross VLT revenue for NYRA from the Genting New York casino at Aqueduct, which has now opened with its 5,000 maximum VLTs, envisions about $45 million for purses, $27 million for the capital fund, and $21 million for operations.
Hayward also used the Dec. 19 meeting to announce that a telephone call center for NYRA opened earlier in December within New York’s borders. NYRA was criticized by state officials earlier this year after contracting with a Churchill Downs Inc.-owned company to move NYRA’s call center outside New York.
In the fall, NYRA said it was working with state economic development officials to bring the center back to New York; Hayward said the new facility began operations.
"Terrific," said Robert Megna, the Franchise Ovesight Board chairman who is also the top fiscal adviser to Gov. Andrew Cuomo, who was among the leading critics of NYRA taking its phone operations outside New York.
After years of battles with the state over questions of fiscal transparency, board members praised NYRA for providing information about its 2012 budget plans before the NYRA board has given final approval to the budget. But NYRA, as well as the oversight board, declined to provide the written fiscal documents provided to state officials about the racing corporation’s 2011 and 2012 operations.
In a seemingly annual ritual, however, state officials did raise questions about NYRA’s plans for salary hikes. This time, NYRA said it is planning 3% higher wages costs in its 2012 budget.
"I can tell you one thing, from my experience, budgeting salary increases in advance of your negotiations on them only ensures that you will get them at a minimum," Megna said. He said the 3% NYRA projects, as a result, more realistically represents a floor for salary increases at the racing corporation.
Hayward said NYRA is seeking additional reductions in health care and other expenses in the union contracts NYRA is negotiating in the coming year. Half of the contracts of unions at NYRA have expired. He said the unions have asked for three to four times what NYRA has offered for wage hikes at the negotiating table.
"From our perspective, the way we’re looking at the union discussions takes into account things, long-term, that are much more beneficial to NYRA," Hayward said.
Megna also raised concerns about $800,000 of expenses in "other" categories of spending increases, including travel, dues, and what he said was a double-digit planned hike in "manure removal."
"I don’t know if there’s any squeezing you can do there," Megna said of the additional expenses.
Hayward said NYRA has not yet seen cross-over benefits of casino gamblers placing wagers on racing. But he said a state-of-the-arts sports bar and simulcasting center in Aqueduct’s Man O’ War Room–and improvements to the track’s betting areas and WiFi for people to make horse bets at the casino on their handheld devices–will help push what an oversight board member called "cross-pollination" from the casino to horse racing side.
NYRA officials said they expect a change in 2012 from the "challenging" year of 2011, which saw it deal with everything from the fallout from the New York City Off-Track Betting Corp. shutdown to a rare fall snowstorm that forced the closing of Belmont Park.
McClain said NYRA’s account wagering net revenue is expected to rise about 6.6% from the 2011 level of about $114 million. NYRA is launching a new website that is expected to drive more wagers.
She said NYRA expects "robust gains" in its export betting market, in which NYRA gets most of its pari-mutuel handle. She attributed much of the projected gain to higher field sizes and the luring of new betting outlets that might have not offered NYRA races with smaller field sizes.
