State Comptroller Thomas DiNapoli has subpoenaed the New York Racing Association’s (NYRA) books, after the group said it might have to cancel the Belmont Stakes race in June – the third jewel in racing’s “Triple Crown.”
DiNapoli said on Monday, December 28 that he took the step after NYRA denied access to their financials – saying prior audits showed NYRA failed to pay nearly $54 million in state fees from 2000 to 2005.
A week before, NYRA President Charles Hayward said the firm, which operates Aqueduct, Belmont and Saratoga race tracks, could run out of cash by June. “We can’t invite trainers from all over the country if we think somehow we’re going to close by June 1,” he said.
DiNapoli scoffed at the suggestion, pointing out that NYRA claimed in September it was financially stable. “In the meantime, it has been trying to hide its books from my auditors,” he said. “It’s the same old NYRA in new sheep’s clothing, trying to shortchange taxpayers again.”
NYRA emerged from bankruptcy protection in 2008, after striking a 25-year racing franchise deal. The state forgave $100 million NYRA owed it and gave the firm $105 million to pay off debts – including $30 million in operating cash.
The state also pledged 14 to 16 percent of revenue from 4,500 video lottery terminals (VLT) to be operated at a “Racino” at Aqueduct – that was supposed to go to contract in April of this year.
The winning bidder, Delaware North, failed to come up with the $370 million “front money” payment and the governor and legislative leaders have yet to pick a finalist since new bids were first submitted in May.
Another problem cited is that the city’s bankrupt Off Track Betting (OTB) Corporation reportedly owes NYRA $14.5 million.
NYRA spokesperson Dan Silver takes exception with DiNapoli’s view, saying the group “Operates without a single penny of taxpayer subsidy.”
Silver pointed out that the money was “in exchange for over $1 billion worth of real estate.”
“The need for additional revenue if VLTs failed to be operational by April of 2009… is not a surprise to anyone in state government who is familiar with the NYRA franchise agreements.”
Silver also said that the State Constitution forbids the comptroller from auditing non-profit corporations, including NYRA, which is overseen by the state’s Attorney General, Racing and Wagering Board, Franchise Oversight Board and Department of Taxation and Finance – with 11 of their 25 directors appointed by the state.
“Any suggestion that the taxpayers are placed at risk by the constitutional prohibition on comptroller audits of NYRA is misleading,” he said.