New York State Comptroller, NYRA at odds over financial
By Matt Hegarty
The New York State Comptroller Thomas DiNapoli said Tuesday
that the New York Racing Association was projected to lose $19.7 million on its
racing operations in 2012, a contention disputed by the racing association,
which said it projected a net income of $1.4 million from racing operations in
The dispute revolved
around a statement by DiNapoli’s office that accompanied a follow-up audit
conducted by the comptroller. The audit itself, which assessed NYRA’s efforts
to comply with recommendations made by DiNapoli’s office in mid-2010, did not
reference NYRA’s projected net income for 2012. NYRA officials said that the
association’s 2012 projections were never discussed with state auditors during
the preparation of the audit.
Mark Johnson, a
spokesperson for DiNapoli, said the $19.7 million figure was "provided by
NYRA during a closing conference" with the office’s auditors. He said DiNapoli
stood behind the accuracy of the figure.
The disagreement –
which may reflect a difference of opinion on what costs should be included in
the association’s racing operations – reflects a rapidly deteriorating
relationship between NYRA and state officials over the past several months,
ever since the association began to receive subsidies from a casino at its
Since the casino
opened late October, NYRA has acknowledged that it had been improperly
calculating the takeout on super-exotic bets for the past 18 months, a mistake
that was caught by the auditor’s office in an examination of the state’s
breeding fund. Then, just two weeks ago, the association categorically denied
an allegation made by a state oversight board that NYRA allowed its
account-wagering customers to bet on credit.
statement is harshly critical of NYRA, the audit itself credits NYRA for
"partially" implementing five of the nine recommendations contained
in the 2010 audit, but it also said that NYRA had not made any progress in
implementing another four of the recommendations. Among the recommendations
were that NYRA examine its agreements with contractors and conduct
"surprise" cash counts in its departments.
NYRA said in its
statement that it "took very seriously the recommendations" made in
the 2010 audit, but that it did not have the time or the resources to implement
all of the policies yet.
understand the importance of this process and remain committed to completing
it," the statement said.
As for the dispute over the characterization of the
association’s 2012 operating results, NYRA took exception to explicit
references in DiNapoli’s statement that NYRA would use subsidies from a
recently opened casino at Aqueduct to "mask ongoing financial problems and
inefficiencies." DiNapoli’s statement also said that that NYRA
"stands to squander significant revenue" from the casino and that "only
by gaining new [slot-machine] revenues will NYRA be able to show an overall
profit this year."
NYRA, a non-profit
that has lost tens of millions of dollars over the past several years, said in
its statement that its projection for net income from racing operations did not
include any of the subsidies it expected to receive from the casino. It also
said that use of the subsidies is restricted by state law.