Big A owner, NYRA, files for bankruptcy

Although horseracing is known as the sport of kings, in the case of the New York Racing Association (NYRA), the owner of Aqueduct racetrack in Jamaica, its coffers are apparently empty.
In a statement, the private, non-profit association announced that it filed for Chapter 11 bankruptcy protection in federal court on Thursday, November 2.
&#8220We always viewed filing for Chapter 11 bankruptcy protection as a last option and, regrettably, NYRA's Board of Trustees felt that we were required to take this action to protect New York's thoroughbred racing industry,” said NYRA president and chief executive officer, Charles Hayward, in a statement.
&#8220Chapter 11 bankruptcy does not mean going out of business,” he added. &#8220The goal of the filing is to maintain the current schedule of racing dates, purse structure, stakes program and all other racing operations.”
NYRA pointed a finger at the Pataki administration for its bankruptcy declaration citing the State Lottery Division's failure to approve the 4,500 video lottery terminals (VLTs) the association was betting on to generate revenue for the track. The State legislature approved VLTs in racetracks in 2001.
&#8220It is unfortunate and, frankly, inexplicable why the State Lottery Division could not work out the details necessary to get the VLT construction underway at Aqueduct,” said C. Steven Duncker, chairman of the NYRA Board of Trustees
According to Jennifer Mauer, spokesperson for the New York State Lottery Division, the agency originally approved an agreement between NYRA and MGM Mirage to build and manage the VLT casino at Aqueduct in December 2005 but later requested an amended agreement to address changes caused by NYRA's legal and financial difficulties.
The agency granted NYRA a temporary VLT license in March 2006 pending review of the new agreement, Mauer said. However, with NYRA's Chapter 11 filing, New York Lottery cannot take any further action due to federal bankruptcy code rules, she explained.
&#8220We'll continue to work with NYRA,” Mauer said. &#8220We want to ensure that video gaming becomes a reality at Aqueduct.”
NYRA said that the state's failure to deliver on $19 million of a $30 million bailout it agreed to loan the association last year also contributed to the decision.
On Friday, November 3, the state agreed to loan NYRA $8 million to ensure uninterrupted racing until the end of the year and to protect the state's assets, according to Scott Reif, a spokesperson for Governor George Pataki.
Over the last three years, NYRA brought in new management, reformed its internal security systems, incorporated state-of-the-art drug testing programs through the use of race day monitoring barns, reduced its net loss, increased revenues and decreased expenses.