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NYRA says it needs $30-million from state to survive

Posted: Friday, February 05, 2010 2:05 PM

by Paul Post

New York Racing Association officials said Wednesday the organization is looking at an $8-million negative cash flow this year and it needs $30-million from the state to keep operating until Aqueduct’s racino is operational.

During a hearing looking into NYRA’s fiscal condition on Wednesday, NYRA Chief Financial Officer Ellen McClain said the organization used $80-million of the $105-million it received from the state in 2008 to pay off creditors.

Because of ongoing operations, unavoidable capital improvements, and declining revenues, NYRA started this year with $16.4-million, but expects to spend $24-million, leaving it about $8-million in the hole.

“The economy remains tough,” she said. “We will unfortunately run out of money in the absence of a financing source.”

NYRA President Charles Hayward said he notified the state Budget Division about NYRA’s fiscal condition in November.

“If we don’t have the money in the bank to make payroll, we’re not going to operate,” he said.

Bankrupt New York City Off Track Betting Corp. owes NYRA $15-million.

“We’ll certainly be able to run the Belmont Stakes as long as we get payments from New York City OTB,” Hayward said.

A federal judge is expected to decide on February 22 whether or not to approve New York City OTB’s reorganization plan. NYRA criticized the proposal, saying it would reduce payments to racetracks and breeders. Several harness track owners support OTB’s plan, however.

Absent money from OTB, the state would have to step up to keep NYRA going, Hayward said.

Hayward outlined several other steps he says are needed to make New York racing profitable. At present, if a trainer has two horses in a race they are listed a coupled entry, even if the owners are different. Eliminating this requirement would generate $7-million more in profit for NYRA, add $6-million to purses and give the state an extra $1-million, Hayward said. NYRA has already applied to the state Racing and Wagering Board to have the rule changed.

Also, because of a legal technicality requiring legislative change, NYRA is not allowed to show some its own races on its own Internet platform, Hayward said.

“We’re probably exporting wagering dollars out of the state,” he said.

He also called for a restructuring of NYRA’s relationship with Off Track Betting.

Paul Post is a New York-based correspondent for Thoroughbred Times