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NYRA seeing better results

2011 losses $4.4M worse than expected; ’12 take up

Sunday, July 29, 2012
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— The New York Racing Association is benefitting from higher than projected gambling on its races this year, but last year its net loss ended up being about $4.4 million worse than anticipated.

The positive news is expected to be reflected by the ongoing Saratoga Race Coursemeet, which started on July 20 and for its first weekend was on pace to beat its handle projections. This comes as NYRA is about to transition to a government-controlled board of directors under new state rules awaiting the signature of Gov. Andrew Cuomo.

A planned 43 percent increase in purses at NYRA’s races at Aqueduct, Belmont and Saratoga was expected to generate better races and therefore higher handles, according to the corporation’s budget for 2012. At the 78-day Aqueduct winter meet and the 55-day Belmont spring meet, the conservative increases predicted for on-track handle were exceeded by more than $10 million. The two tracks were expected to generate about $147 million and ended up generating about $159 million.

After the first weekend of racing at Saratoga, on-track handle and paid admission had all increased. On-track handle was almost $13 million, a 14.2 percent increase from 2011, and paid admission was a little above 75,000, an increase of about 2 percent.

At Aqueduct, which ran from Jan. 1 to April 22, the number of racing days was up five from 2011 and two more than anticipated. The daily average total handle, which was expected to jump from $5.74 million in 2011 to $6.21 million for 2012, actually increased 14.7 percent to $6.6 million for this year. The total handle for the 717 races at Aqueduct was $513.8 million, about $40 million more than had been anticipated.

At Belmont, which ran from April 28 until July 15, the number of racing days was the same as 2011 but one less than anticipated in the budget. The total handle for the 525 races there was $563.4 million, about $48 million more than 2011 and about $10 million more than expected.

At both Aqueduct and Belmont, though, paid admission dipped slightly compared to 2011.

Some state overseers of NYRA have continued to express doubt about whether it was wise to invest about half of $93 million the corporation receives from video lottery terminals at Aqueduct into higher purses. Before being ousted in May, NYRA President Charlie Hayward had maintained that the uptick this year was directly due to that investment, which has been echoed by other NYRA officials.

NYRA has not released expense figures for 2012, although if they’re close to the projected budget, then this year could be the first time the corporation doesn’t run a deficit in more than a decade. A net income of $18.9 million was projected for 2012.

While these surprises were welcome deviations from the 2012 budget, the final numbers for 2011 were not as encouraging.

According to an independent auditor’s report by Urbach, Hacker, Young LLP, NYRA’s net loss for 2011 was $24.3 million. The 2012 budget forecast a loss of only $19.9 million.

A spokesman from NYRA did not respond to a request for an explanation of the variation.

Net revenues were actually about $200,000 higher than forecast for 2011, but total expenses were almost $4.7 million more than expected.

The spending habits of NYRA have been criticized this year by state Comptroller Thomas DiNapoli and by the state’s Franchise Oversight Board.

Additionally, the audit notes that NYRA ended 2011 with an accumulated deficit of about $63.5 million.

It is not clear whether the approximately half a million dollars that NYRA returned to bettors, as the result of withholding too much from winning exotic bets over a 15-month period, had an impact on their 2011 figures or will be taken into account this year.

Going forward, NYRA is expecting handle to increase at the coming Belmont and Aqueduct meets. The Belmont fall meet starts on Sept. 8 and runs until Oct. 28. The Aqueduct winter meet begins on Nov. 2 and ends on Dec. 16.

 
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