Although the New York Racing Association now has enough money to get through the year, some damage to the industry has already been done, some horse racing officials believe.
It will take time to tell how many fewer foals were bred in New York this year and how many racing fans were scared away from booking a trip to Saratoga for the summer.
“There’s definitely been short-term damage that’s impacted the breeding industry in New York due to a lot of the uncertainty,” said Jeffrey Cannizzo, executive director of New York Thoroughbred Breeders in Saratoga Springs.
Although foal numbers won’t be known until sometime around September, Cannizzo is predicting a 30 percent drop in foals born this year in New York state, while the national projection is a 12.5 percent decrease.
Cannizzo said racing fans will see the impact on this year’s foal crop in about 21⁄2 years, when these horses come of age.
“I’m projecting that there’s going to be 450 fewer horses on the ground available for racing come 2013,” he said. “That number of horses will equate to roughly a quarter of the year’s racing.”
Under the bill passed Monday night by the state Legislature, $25 million of a previously appropriated $250 million capital loan for the proposed new Aqueduct video lottery terminal facility was diverted into a working capital loan that can be used for NYRA’s operations, said Jessica Bassett, spokeswoman for the governor’s budget office.
The loan must be paid by the end of the current fiscal year, March 31, 2011, or within 30 days of a state contract to install VLTs at Aqueduct — either by the yet-to-be-named VLT operator or by NYRA, Bassett said.
Most likely, proceeds from the new VLT facility will be used to repay the loan.
A VLT operator is expected to be named in August.
And $25 million is small change to gaming companies, said Joseph Dalton Jr., president of the Saratoga County Chamber of Commerce.
“That’s really peanuts to any VLT operator coming in,” Dalton said.
The state expects to gain $1 million a day when VLTs are up and running.
NYRA gave notice to more than 1,400 employees last week that it planned to start laying people off after the Belmont Stakes and close its three tracks if it didn’t get money. The move would have meant no Saratoga meet this summer.
The association is running out of money because it expected VLTs to be operating by now and they are not and because New York City OTB has stopped paying NYRA as it struggles with its own finances.
The industry will grow once VLTs are installed and start making money and after the OTB problems get resolved, Cannizzo said: “When and if those two things happen, we’re optimistic and I think the industry would be profitable again. I think we could lure people back to New York state.”
The $250 million loan for Aqueduct was in place starting in 2008, but NYRA couldn’t tap it for its current financial woes because the monies are restricted to capital improvements at Aqueduct.
With the creation of the new loan, the Aqueduct loan is now reduced to $225 million, Bassett said.
The NYRA loan was included in a measure from Gov. David Paterson to extend basic state operations in the absence of an approved budget for this year, The Associated Press reported.
NYRA Chairman C. Steven Duncker said the board of directors is “grateful” for the loan and thanked all those who lobbied for it.
Elected officials lauded the loan, including state Sen. Roy McDonald, R-Saratoga; Democratic Supervisor Joanne Yepsen of Saratoga Springs, who is waging a campaign for McDonald’s seat this fall; and U.S. Rep. Scott Murphy, D-Glens Falls.
“It’s disappointing that it has taken this long for action, putting unnecessary economic stress and uncertainty for Saratoga Springs and the entire region,” McDonald said in a statement.
Yepsen also criticized state government for “ignoring this problem for years.”
“This important issue to our region should have been addressed years ago, but this is better late than never,” she said.
Because of the agreement, the chamber of commerce agreed to hold back on filing a lawsuit against the state on behalf of horse breeders. Dalton said he told the four attorneys working on the case to keep their notes but put further research on hold.
“If the VLT arrangement does not work out, we will continue the lawsuit,” he said.
The chamber is paying for the lawyers because the racing issue affects the whole county’s economy, Dalton said.
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