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NYRA board eyes hiring firm to improve online wagering

Tuesday, June 11, 2013
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— The New York Racing Association board of directors on Monday tentatively approved the hiring of a contractor to improve NYRA’s online wagering, despite concerns from state regulators.

It was the first heated and confrontational meeting in the six months of the new board, which was taken over by the state and reconstituted last year in an effort led by Gov. Andrew Cuomo. The controversy revolved around delays in improving online wagering, delays NYRA says will cost it up to $5 million in lost revenue.

The state’s Franchise Oversight Board, the main state overseer of NYRA’s finances, has expressed concerns with how the contractor was chosen. NYRA will now review those complaints and decide if new bids should be solicited.

Also Monday, NYRA officials announced that the filling of their long-vacant CEO position could be imminent. The post was emptied more than a year ago with the firing of Charlie Hayward for his alleged role in a bookkeeping error that cost bettors millions.

David Skorton, chairman of the NYRA board, updated the board on the search for a new CEO. He said the search committee and consultants have narrowed their list down to an impressive field of candidates.

“We’re very, very close to recommending someone to the board,” he said.

NYRA began looking for a company to improve its online wagering in 2011. There were at least six interested companies, but only one, Global Betting Exchange, offered a proposal that met NYRA’s needs, recounted NYRA’s interim leadership team.

NYRA was unable to award the contract last summer, however, because the board was in limbo, waiting for the state takeover to be completed.

Concerns held by the state’s Franchise Oversight Board, the main regulator of NYRA, were raised at NYRA’s board meeting Monday by Ben Liebman, a key racing adviser to the governor. In response to repeated defenses of how Global Betting Exchange was selected, he countered that the system was broken and inadequate.

NYRA board member Bob Megna, the former chairman of the FOB and current budget director for the governor, said the state had an extensive list of concerns. “They have significant questions and reservations about [the selection process],” Megna added.

Some NYRA board members said they were unhappy these concerns weren’t shared earlier and were relayed only to NYRA’s management. John Hendrickson, a former NYRA board member who now serves as an adviser, called the lack of communication with government overseers embarrassing, considering the NYRA board is state-controlled.

“There is supposed to be better communication,” he said. “I’m really disappointed.”

NYRA board member Earle Mack argued that it might make sense just to start rebidding and not bother to approve the GBE contract. “I suggest we not fight city hall on this … It looks like we haven’t [got] a choice,” he said.

NYRA CFO Susanne Stover said NYRA’s budget projected a $3 million to $5 million increase in revenue during the fourth quarter of this year if a firm can be chosen soon to make improvements to online wagering. If an operator can’t be put in place soon, that projected increase will evaporate.

NYRA board members were vocal about their displeasure with the state’s interference: Rick Violette called the problem frustrating and said that the contract had been thoroughly reviewed. Charlie Wait added that the state’s criticisms were an indictment also of the NYRA board, as its audit committee carefully reviewed the selection process.

Also at the meeting, the NYRA board voted to name the new viewing stand at Saratoga Oklahoma training track the Whitney Viewing Stand. Construction of the stand was held up this spring when safety concerns were raised by horsemen, but those fears were quelled by moving the viewing stand to a different position on the track.

“I am honored to have the public viewing stand named after the Whitney Family,” said Marylou Whitney in a statement. “The Whitney Family has loved the track and Saratoga for over 100 years — starting with William C. Whitney, who helped save the track.”

The viewing stand is a major component of the Saratoga 150 celebration.

 
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