By Steve Mosco
After ousting two top executives in the wake of a scandal that saw bettors cheated out of $8.5 million, the New York Racing Association’s decision to fill the spots from within is not sitting well with the governor.
The racing authority named former Chief Operating Officer Ellen McClain as its new CEO and Kenneth Handal as its new general counsel May 14, according to a NYRA statement. This followed the termination of Chief Executive Officer Charles Hayward and general counsel Patrick Kehoe May 4.
After meeting with the horse racing association, the governor announced an agreement Tuesday to establish the NYRA Reorganization Board. The board will place NYRA under temporary public control in order to reform the association and transform oversight and management.
“With the structure of the gaming industry changing here in New York, the state needs to take a new approach to how it manages and governs racing,” said Cuomo. “New Yorkers can be assured that the NYRA Reorganization Board will act in the interests of the members of the public who enjoy horse racing, the taxpayers who support it and the horses themselves, to make racing in our state the strongest, safest and most enjoyable in the country.”
The agreement effectively dissolves NYRA’s current executive board. Once board members are appointed, the new board will conduct a national search for a new CEO and general counsel.
According to a report by the state Racing and Wagering Board April 29, NYRA charged bettors an extra percentage point on certain wagers at Aqueduct, Belmont and Saratoga racetracks from Sept. 15 through Dec. 21, 2011.
NYRA operates the racetracks at Saratoga, Belmont and Aqueduct in South Ozone Park. Resorts World New York City, which operates a casino at Aqueduct, preferred not to comment.
John Sabini, chairman of the state Racing and Wagering Board, said NYRA filled the two vacated positions without notifying the board or the state Franchise Oversight Board. According to Sabini, this did not allow the boards to properly vet McClain or Handal.
Sabini and Franchise Oversight Board Chairman Robert Megna called the appointments “entirely inappropriate” and “invalid.” Specifically, the boards are concerned with McClain’s appointment because she was one of NYRA’s top officials when the alleged wagering scandal took place and state investigations have yet to be completed.
NYRA said it moved quickly to fill the vacant positions to insure that there was professional management in place to operate a “complex business which has a significant economic impact on New York State.”
NYRA officials said they were pleased with the meeting and look forward to the governor’s new board to come to fruition.
“The bettors, fans, public, and government deserve trust in their racing. This resolution is a necessary first step,” said NYRA representative John Hendrickson. “I am encouraged that racing will now receive enthusiastic commitments from Albany. Gov. Cuomo is to be commended for his vocal support of racing, and for bringing all parties together for a positive resolution.”
In September 2008, NYRA got a new 25-year franchise from the state to run Saratoga Race Course, Belmont Park and Aqueduct Racetrack, but the contract says the agreement may be revoked if NYRA fails to meet various performance standards.
Reach reporter Steve Mosco by e-mail at smosco@cnglocal.com or by phone at 718-260-4546.
