Monday, June 15, 2009

Taking Care of Business, or Not, in Albany

Thanks Dave (Paterson) and Malcolm (Smith). Even by the historically low standards of Albany, your leadership has been stunningly incompetent. And now you've apparently -- one never knows where this circus will end up -- managed to lose Democratic control of the NY State Senate, with unpredictable consequences for a myriad unresolved policy issues. Two of those issues directly concern horse racing in the (declining) Empire State.

First, any upheaval in Albany can only prolong the agony of selecting a contractor to build and run the slot-machine palace promised for lo these many years for Aqueduct. We've been promised the slots, and their attendant boost to purses, for at least the last five years, so we've learned to expect delay, but this latest blow, completely unnecessary, has one feeling like the camel as more and more straw is piled on its back.

Purses in New York are stagnating, while costs continue to increase. Trainers, equally squeezed by cost pressures, are forced to raise day rates, just as owners hit by the financial trauma of the last couple of years scale back their commitment to racing. Day rates in New York for the average trainer -- to say nothing of the Todd Pletchers and Nick Zitos of this world -- are pushing hard against the $100 a day threshhold. Meanwhile, purses, while still quite decent compared to many US racing venues, are stagnating. Allowance races at NYRA tracks carry purses in the mid-$40,000s, while the maiden claimers and conditioned claimers that increasingly are used to fill out the race card often have purses of $20,000 or less. Racing has always been a tough place for an owner to make money, but it's getting tougher.

The slot machines (oops, they're supposed to be called "video lottery terminals," to comply with the NY state constitution) were intended to provide significant revenue to the state, while increasing purses and NYRA revenue enough to make racing a viable business, if not a source of Bernie Madoff-like profits. The legislation authorizing the machines provided for 4,500 of them at Aqueduct. Even at a very conservative prediction of $200 per machine per day, that would mean almost $1 million a day in profits, to be divided among the state, the racino operator, NYRA and the horsemen's purse account, with a little bit going to NY breeders. That little bit to purses might have pushed allowance races up into $60,000 territory, which would be enough, at least for a few years, to help us all survive in the game we love.

I've forgotten how many years ago the process of selecting an operator for the Aqueduct slot machine palace started. MGM was awarded a contract, but that was delayed first, by NYRA's indictment and the appointment of a court-ordered overseer, and then by NYRA's bankruptcy filing. One also suspects that MGM was in no hurry to proceed at Aqueduct, since slot machine play in Queens would inevitably siphon players away from MGM's Atlantic City properties. After NYRA emerged from bankruptcy, a new contract was awarded to Delaware Nort, which runs the slots at Finger Lakes, but that company reneged on its promised up-front payment, and, once again, the search for an operator is on. With the Senate in disarray, no one knows how long the process will take.

Meanwhile, we're still waiting for purses that will cover even a majority of our costs.

The second issue pending in the Legislature concerns funding for the health program that serves backstretch workers, but that's a story for another day.

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