NYRA to address shortfall
Updated: December 9, 2010, 5:50 PM ETBy David Grening | Daily Racing Form
OZONE PARK, N.Y. -- The New York Racing Association is working on a number of initiatives it hopes can make up for an estimated $33 million shortfall in revenue for the company and purses caused by the shutdown this week of New York City Off-Track Betting Corp. NYRA plans to open its own OTB parlor at Belmont Park beginning Sunday, has asked the state to allow for video-streaming of its races on the Internet, and hopes to make a deal with the city to put its races back on the television station formerly utilized by NYCOTB. Also, NYRA will continue to expand its bus service from select OTB branches throughout the five boroughs to the track and aggressively market its NYRA Rewards program, which has signed up more than 200 new customers in the last two weeks. NYRA will offer double cash rewards on new accounts for three months. NYRA president and CEO Charlie Hayward hopes these initiatives, plus the impending infusion of money expected from a casino scheduled to open at Aqueduct in late May, can help NYRA continue operating without having to cut purses or reduce racing dates in 2011. Hayward, speaking to reporters in Aqueduct's press box Thursday, said NYCOTB's closing "puts financial pressures under us, but we do have the safety net of the VLTs. I think it's way premature to talk about purse reductions and race-date reductions. I think we have to see how these things work out." Factoring in a 12 percent reduction in handle on NYRA races at NYCOTB -- as was the case this year -- Hayward estimated that NYCOTB's closure would mean purses for races at Aqueduct, Belmont, and Saratoga would take a hit of $18.6 million while NYRA would lose out on $14.7 million in revenue. Some of that money could be recaptured if the city releases the $8 million that NYCOTB, while in bankruptcy, put in escrow in lieu of payments to NYRA and purses. Hayward said that $4.8 million of that money would go to purses, $3.2 million to NYRA. Hayward estimated that NYRA has to try and make up for 35 percent of what NYCOTB handled at its parlors because only 2.4 percent of each dollar wagered at an OTB parlor goes to NYRA, compared with 10 percent of each dollar wagered ontrack. A bet through NYRA Rewards is considered an ontrack wager. "We're getting so little from OTB, we don't have to get nearly the handle to get the same yield," Hayward said. Hayward said NYRA sent an emergency request to the State Racing and Wagering Board on Friday that would allow NYRA -- as well as the five remaining regional OTBs -- to video-stream its races as well as races from out-of-state tracks, essentially making it a full-blown advance deposit wagering operation. Hayward said video-streaming "along with some of the incentives we're talking about, including our rewards program, would make us a very competitive ADW." Hayward said that NYRA was to have talks New York City officials about restoring its signal to Channel 71, which was the television station OTB used to show NYRA's races. Hayward said NYCOTB paid the city $3.3 million annually to show races on Channels 71 and 73, the latter which showed races from out-of-state tracks. Hayward said the video-streaming on the Internet and getting the races back on television are key components for NYRA to grow its handle "because people aren't going to bet on races they don't see." Hayward said NYRA also notified the board that, beginning Sunday, it plans to open the Belmont Cafe on the first floor of Belmont Park as an OTB of sorts. The cafe, which is heated, will be open seven days a week and staffed with mutuel clerks and self-betting machines. It also will offer food service. Races from Aqueduct as well as other tracks would be shown. NYRA would have opened it Saturday, but the Belmont cafe is being used for a Christmas party for the Belmont Child Care Association. Asked if he expected some resistance to opening Belmont for simulcasting from Nassau OTB -- which has as a nearby branch in Franklin Square -- Hayward said, "If NYRA were to reduce its race days and go out of business, the other regional OTBs would be right behind us; we're 40 percent of their business. They should be thrilled we're trying to stay in business." A spokesperson for Nassau County OTB said it had "not yet received any proposal from NYRA or any information about this plan. But when we do receive it, we do look forward to reviewing it with Charlie Hayward." Meanwhile, Assemblyman J. Gary Pretlow, chairman of the Committee on Racing and Wagering, has called for a hearing next Wednesday in Albany to explore the possibility of merging the state's regional OTBs into one entity. Hayward said he would participate in that hearing "with enthusiasm." Hayward said that if the OTBs, who were seeking similar relief offered to NYCOTB in a Senate Republican bill that never got put up for a vote, "are serious about fixing racing then step forward and see how it can be reorganized." Nassau County OTB will not participate in the hearing, the Nassau OTB spokesperson said, but "we look forward to reviewing the testimony from the hearing after it takes place."