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What you need to know for 11/19/2017

State loosens reins on NYRA

State loosens reins on NYRA

Business leaders happy to see organization reprivatized
State loosens reins on NYRA
The Saratoga Race Course Oklahoma Training Track on Wednesday, April 12, 2017.
Photographer: ERICA MILLER

With the New York Racing Association on track to being under private control again, Cynthia Hollowood is betting on good things to come at Saratoga Race Course. 

Hollowood, general manager of the Holiday Inn in Saratoga Springs, hopes the state’s reins being loosened will mean more progress on capital projects at Saratoga, like a much-discussed At the Rail luxury clubhouse that would replace temporary tents and trailers.

“In every other major sport, you go to a sporting venue and they have these luxury boxes, and corporations and associations are able to entertain their customers and employees,” she said. “We don’t currently have that. We need to generate new fans, and by having that facility to entertain people, we’re going to bring more people into the sport, which will bring more people to the hotel.”

After five years of state oversight, NYRA will be returned to private control and operate as a nonprofit organization after Gov. Andrew Cuomo and legislative leaders agreed on a deal with the passage of the state budget over the weekend. 

“We thank the governor and Legislature for their support in returning the New York Racing Association to private control,” said NYRA CEO and president Chris Kay in a prepared statement. “NYRA is the cornerstone of an industry responsible for more than 17,000 jobs and $2 billion in annual economic impact across our state. As a private entity, we look forward to continuing to grow interest in our racing, expand our fan base, and promote New York’s important tourism and agriculture sectors.”

The state took over the organization, which oversees thoroughbred racing in Saratoga Springs and across the state, in 2012, with Cuomo pointing to a staggering horse-racing industry that was too reliant on revenue from video slot machines as well as decades of scandal.

Todd Shimkus, president of the Saratoga County Chamber of Commerce, said the state takeover took care of that. He joined Hollowood in advocating for NYRA’s re-privatization at a legislative hearing at the Capitol in January. 

“What everybody agreed to was that a new CEO would be hired, that they would focus on profitability, that they would focus on improving horse safety, and that they would focus on improving the conditions and the treatment of backstretch workers,” he said, adding that locally, racing stakeholders hoped to find ways to boost attendance. “You can check off all four of those boxes.”

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Shimkus said he was also happy that the deal resulted in a board with key industry stakeholders and honors an agreement from 2008 that granted a specific percentage of VLT revenues from Aqueduct Racetrack in Queens to the horse-racing industry. Cuomo had argued for a cap on the revenue, which is not part of the deal. 

The nonprofit structure will also help Saratoga compete for gambling dollars with casinos that are being built across the state and the Northeast, including the recently opened Rivers Casino & Resort in Schenectady, Shimkus said. The new board will operate free from the state Open Meetings Law and will not have to meet in public.

“For us to be able to compete, we’ve gotta be flexible and innovative, and we think that’s what a not-for-profit can do better than any other type of entity,” he said.

Like Hollowood, Shimkus was optimistic about capital improvements moving forward under the 17-member board, which will include two people appointed by Cuomo, two each by the Senate and Assembly majority leaders, one representative from the New York Thoroughbred Horsemen’s Association, one from the New York Thoroughbred Breeders, Kay — the NYRA CEO and president — and eight people appointed by NYRA’s existing executive board. The new board will take effect as soon as a majority of its members are appointed.

“It is about the capital improvements, making sure that they are significant, that they improve the fan experience and yet are respectful of the history and the traditions,” Shimkus said. “There are some clear upgrades that need to be made; there are some new facilities that we need to have. But we also have to make sure that we don’t change the landscape too much because we have something pretty good going on here right now.”

The state Oversight Board in August approved the environmental review of plans for Saratoga’s most extensive renovations in 50 years, which cleared the way for about $130 million in improvements. Those plans included the new clubhouse, a three-story building west of the current clubhouse packed with high-end hospitality venues for banquets, outdoor dining terraces and rentable suites. In February, NYRA put out a request for design proposals. 

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Jeffrey Cannizzo, executive director of New York Thoroughbred Breeders, said reprivatization allows the racing industry to be “nimble and flexible” by letting it operate without as many government restraints. 

“It’s going to allow the industry to flourish with some stability going forward, which is important for breeders and horsemen here,” said Cannizzo, who also spoke at the hearing in January. 

Cannizzo’s organization is based in Saratoga Springs and he will have a seat on the new board.

“The horsemen and breeders are excited because our voting membership and rights on that board have been reinstated,” he said. “As the key industry stakeholders, having that full voice on the board of NYRA, that’s critical to us.”

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