April 12, 2016
Teresa Genaro, Blood-Horse

Three-and-a-half years after being put under state control by Gov. Andrew Cuomo, the New York Racing Association board of the directors approved a plan April 12 for a return to privatization at a meeting in New York City.

The board was required by statute to submit a re-organization plan to the state this month, with state control due to expire, also by statute, in October. On Tuesday it submitted three possible plans, one of which would extend the current re-organization board.

In 2012, Governor Cuomo seized control of NYRA following concerns about integrity and mismanagement. Though NYRA was scheduled to return to privatization last year, Cuomo extended the period of state oversight by one year.

The three re-organization plans submitted Tuesday differed only in governance and the make-up of the next board of directors. Under the first option, a 15-person board would have 11 privately appointed and four publically appointed members, two by the governor and one each by state Senate and Assembly leaders.

Option 2 would have a 15-person board comprised solely of private members.

The third option that would extend the current re-organization board with a majority of members appointed by the governor and legislature was included at the request of state legislators.

Decisions about NYRA’s future will be made solely by the governor and legislature, but the board did recommend that either of the first two options be adopted, with a preference for a board that combines private and public appointees. The board noted that having an official tie to Albany has been beneficial in the past in furthering the organization’s interests.

Attending the meeting by phone, New York Thoroughbred Horsemen’s Association president Rick Violette asked that both the NYTHA president and the executive director of New York Thoroughbred Breeders be made full voting members of the board. Both positions are currently ex officio without voting privileges. NYRA board vice chair Michael Del Giudice declined to include that recommendation, saying later that he thought the interests of those organizations can, at times, be in conflict with NYRA’s, making it inappropriate for them to vote on board matters.

Under options one and two, the NYRA chief executive officer would become a full voting member of the board.

Once the board returns to private control, it would no longer be required to abide by New York State’s open meetings laws, and Del Giudice confirmed that board meetings would cease to be open to the public. Reports of the CEO and chief financial officer would be posted on the NYRA website.

In something of a marketing pitch to the state to encourage legislators to accept the board’s recommendation, a portion of the meeting was devoted to recapping the current board’s performance, including returning NYRA to profitability; significant capital expenditures to upgrade customer and backstretch facilities; a decline in equine catastrophic injuries; and increases in handle.

NYRA president and CEO Chris Kay pointed to significant handle and purse increases so far this year at Aqueduct Racetrack. He said through the first three months of 2016, wagering on NYRA races improved 24.7% compared with last year and purses are up 18.3%. He said nationally handle is up 3.1% and purses are down 2.6%.

Kay also noted that the catastrophic injury rate at NYRA tracks was 1.09 per thousand starts, down from 2.2 per thousand starts in 2012. The 2015 number puts NYRA fatalities below the national average of 1.62.

Both Kay and Joseph Lambert, chief administrative officer and corporate counsel, said they believe the decision will be made before this year’s legislative session ends in June. They also said that should that happen, they would expect the new organizational structure to take effect immediately.