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Allow NYRA to expand in New York City, but only as a trial

Saturday, December 29, 2012
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There’s a song from the musical “Oklahoma” called “The Farmer and the Cowman.” It says that, although one man likes to push a plow and the other likes to chase a cow, that’s no reason why they can’t be friends — after all, they’re “territory folks” with common interests, and “should stick together.” This is a message that the various players in New York state’s fractured horse racing industry, and the state leaders who allow and abet their destructive competition, need to hear.

Everybody knows about the New York Racing Association’s sorry history, which includes losing money year after year while spending extravagantly, lack of transparency, arrogant management and corruption. In 2008 the state came this close to taking away its franchise, and probably should have (or at least given it a much shorter one) — but in the end chose to renew the franchise for another 25 years.

While NYRA has been bad news, the state hasn’t helped, denying it badly needed revenue by needlessly delaying for almost a decade the installation of VLTs at Aqueduct Race Track. And in a larger sense, the state has hurt NYRA by establishing a separate, competing structure that takes off-track bets on the races NYRA produces at the three tracks it operates: Saratoga, Aqueduct and Belmont.

The regional OTBs are popular because, unlike NYRA, they give money directly to the municipalities in which they operate. But one of them, New York City’s (the largest of all), no longer does that because it has been closed since going bankrupt in December 2010. Although NYRA has moved in and picked up a small part of the market, a lot of betting that was done previously at the New York City OTB either hasn’t been done, or has been done with out-of-state, out-of-country, or Indian tribe bet processors — which is legally dubious, harder to keep track of, and less beneficial to New York’s horse racing industry.

NYRA wants to expand into the New York City market in a major way. So does the Catskill Off-Track Betting Corp., but Gov. Cuomo last week vetoed legislation that would have allowed it to, on the grounds that this was another ad hoc gambling expansion and the state needs a comprehensive plan for all its gambling issues.

That seems to open the door to a New York City expansion for NYRA, which finally seems to have turned things around financially (not just from the long-awaited VLTs but from better management). It’s expected to turn a profit in 2012, for the first time in 11 years.

But if NYRA is allowed in, it should be on a trial basis, and NYRA should have to share revenue with New York City, just as the OTB did. If both NYRA and the city prosper, and the apparent management improvement turns out to be for real, then the arrangement can be made permanent.

 
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