The Horse Racing / Oxford English Dictionary Exacta

By Bennett Liebman
Government Lawyer in Residence
Government Law Center
Albany Law School

Who benefits from the sport of horse racing? Many would say that there are significant economic benefits from horse racing. Horse racing and breeding can create thousands of jobs. Others might say that the main benefits of horse racing are entertainment and amusement. For much of the 20th century, horse racing was probably the leasing spectator sport in the nation.

Yet, a look at the Oxford English Dictionary (OED)[1] and other dictionaries should tell us that the chief beneficiary of horse racing has been the English language. The words, phrases, and idioms of horse racing have become the language of America.

It’s not just the language of denizens in Damon Runyon’s short stories. It’s not confined to the tracks and it’s not confined to gamblers. It’s everywhere.

Take a look at the words. There’s “workout” which was originally “a practice run for a racehorse.” There’s “dead heat,” meaning a tie, which was used for horse racing as early as 1796. There’s a “dark horse” “of whom or which nothing is generally known” which derives from a description of a horse race in a novel by Benjamin Disraeli in 1831. There’s “running mate” used in harness racing from the 1850’s. There’s “first string” which was originally “the best or fastest racehorse belonging to a specified owner or trainer.” The term “hands down,” meaning with little effort, derives from horse racing, “with reference to a jockey dropping the hands, and so relaxing his or her hold on the reins, when victory appears certain.” A “turf war” – signifying a fight over territory – started as a dispute involving horse racing or horse racing organizations.

There are numerous gambling terms derived from horse racing that have made their way into general usage. They are “morning line,” “pari-mutuel,” “parlay,” “trifecta,” “tipster,” “hot tip,” “daily double,” “quinella,” “triactor,” “across the board,” “exacta,” “out of the money,”[2] “form book,” and “off the board.”[3]

There are words included in descriptions of races that have filtered their way into the language. They include: “armchair ride,” “fast track,” “match race,” “homestretch,” “backstretch,” “wire-to-wire,” “at the wire,” “under the wire,” “no hoper,” “post time,”[4] “photo finish,” “post time,” “rank outsider,” “mudders,” “walkover,” “in the running,”[5] “also ran,” “run for one’s money,” and “Garrison finish.”[6]

Terms involving weight had their origin in horse racing from “heavyweight” to “featherweight” and “lightweight.”

There are descriptions of racing including “steeplechase,” “turfdom,” and “point-to-point.” There are terms that originated with people associated with horse racing like “clockers,” “hot walkers,” and “tipsters.”

Other terms of racing origin include “hippodrome” now used as a name for theaters which began life as a course for horse racing. The word “ascot” signifying a specific tie is derived from the clothing worn at the fashionable Ascot racing meet. The English Derby ended up the basis for the felt hat known as a “derby.” The phrase “all ages” meaning an event open to everyone, regardless of age, started off as a racing term referring to races that were open to all horses no matter their age.

Much of the most recent usage of horse racing terminology in America has come in the field of journalistic coverage of political elections. It has come at a time when the media collectively has been faulted for so-called horse race coverage of elections. The coverage has been criticized for focusing on tactics, strategy, gaffes, appearances and whoever is the leader in the polls. The horse race coverage avoids focus on important and actual substantive factual position on issues.

The horse racing coverage tends to thrive on the use of horse racing terminology. The late political commentator Tim Russert loved calling any trio of states or issues a trifecta. During the 2000 presidential election, he regularly advised that Al Gore needed to win the trifecta of Pennsylvania, Michigan and Florida.[7] Since Russert’s use of the trifecta, American political commentary including the 2016 presidential campaign has been awash in trifectas.

While Donald Trump may have started off as a dark horse, he soon emerged as a first string candidate. There were numerous Republican no hopers such as Lindsey Graham, George Pataki, Rick Santorum, Bobby Jindal, and Mike Huckabee. They all finished off the board and out of the money. While Hillary Clinton led wire to wire in the Democratic primaries, at one point political pundit Chris Matthews found that “Senator Bernie Sanders suddenly looks headed for daily double in American politics in Iowa and New Hampshire.”[8] By the spring, “the odds-on favorites won; the Trump-Clinton daily double finished double-digit lengths ahead of their rivals.”[9] The candidates chose their running mates and engaged essentially in a match race, where the candidate contended that their opponents were mudders, and Trump was the winner following a photo finish at the wire. Trump’s win along with the Republican majority in the House and Senate assured a Republican trifecta in the federal government.[10] There were similar trifectas in state governments as a growing number of states elected Republican governors and Republican majorities in both legislative houses.[11] The stock market even hit a superfecta after the Trump victory.[12]

Perhaps the start to ending horse race journalism would be to prevent journalists from using horse racing terms in describing elections.

Non-Racing Phrases

Oddly enough, there are some racing-style phrases that did not originate in racing. The sport of kings was not originally racing. It was hunting and war.

While the term “jockey” has been use for professional race riders since the 17th century, it started as a diminutive or familiar by-form of the name Jock or John.

The term “ringers,” signifying fraudulent substitutes, had its origin as a general term for counterfeits, well before being applied to horse racing. The Phrase Finder, however, suggests that the phrase “dead ringer” meaning an exact duplicate does stem from horse racing.[13] The   word “handicaps,” while in use as a phrase in horse racing since 1751, was first applied as a type of general game in the 17th century. A “railbird” was a tropical American cuckoo long before it was used to describe a racing enthusiast.

“At the gate,” meaning close at hand, was in use before organized horse racing began.

“Simulcasting” started off as a term to describe shows aired both on TV and radio. It later referred to shows aired on more than one TV network, before it had any application to horse racing.

A “teletheater” was not initially a location – other than the actual race track – that showed televised horse races. It was originally “a television series consisting of a number of self-contained dramas.”

“Long shot” initially referred to long barrel guns and the furthest distance which a shot fired from a weapon can reach.

The “triple crown” referred to the papal tiara, centuries before there was a potential triple crown in English or American racing.

Other terms we associate with racing that did not have a racing origin include “mount,” “pinhook,” “paddock,” “outrider,” “tout,” and “stayer.”

The use of the word “upset” for an unexpected or surprise winner (rather than for a revolt or tipping over) did not come as a result of the horse named Upset, who in 1919 became the only horse to defeat Man o’ War.[14] There are numerous examples of the  press using the word “upset” to signify a surprise victory in the 19th century.

Possible Racing Terms

Finally, there are familiar phrases that may have come from horse racing.

“Hat trick” – referring to a set of three successes in a match – probably had its origins in cricket.[15] It was, however, used in racing for a rider winning three races in a meet,[16] well before it was first utilized in ice hockey for a player scoring three goals in a game.

While the OED does not find that the word “charley horse” meaning stiffness or a cramp comes from horse racing, the Online Etymology Dictionary suggests that the term derives “probably from somebodyʼs long-forgotten lame racehorse.”[17]

The term “wild goose chase” may have its origins in racing. It was first used in 1602 as “a kind of horse-race or sport in which the second or any succeeding horse had to follow accurately the course of the leader (at a definite interval), like a flight of wild geese. The Online Etymology Dictionary finds that it was first used in Romeo and Juliet in the 1590’s “where it evidently is a figurative use of an earlier (but unrecorded) literal sense in reference to a kind of follow-the-leader steeplechase.”[18]

The use of the term “Big Apple” as a reference to New York City arguably stems from horse racing. The Online Etymology Dictionary claims that it derives from jazz musicians calling any city, especially a northern city, the “Big Apple.” Yet, it was used as early as 1921 “to refer to New York racing circuit, considered as the pre-eminent one.”  Word Origins states, “This name for New York City was originally horse-racing slang that made its way into the vernacular.”[19] The Phrase Finder writes, “Probably the strongest contender is that it was coined in the horse racing community in the southern USA.”[20]

The Online Etymology Dictionary finds that the term “give and take” as of 1769 was “originally in horse-racing, referring to races in which bigger horses were given more weight to carry, lighter ones less.”[21] The OED suggests, however, that the term was in use as early as the  16th century to denote exchanging repartee and blows.

The point is that were it not for horse racing, the English language would be far less rich and interesting. Hands down, from the perspective of the dictionary, horse racing’s linguistic contributions triumph over all other sports in a walkover.

 

[1] All references in this article are to the Oxford English Dictionary, Oxford University Press (2017). http://www.oed.com.i.ezproxy.nypl.org/.

[2] The OED now uses “out of the money” principally for the pricing of puts and calls.

[3] “Off the board” has the same general meaning as “out of the money,” referring to contestants that do not finish in the top three. It is not referred to in the OED but is in general usage.

[4] https://www.merriam-webster.com/dictionary/post%20time

[5] “10 Phrases That Come from Horse Racing,” May 1, 2014, http://blog.wordnik.com/10-phrases-that-come-from-horse-racing.

[6] The term is not referred to in the OED but can be found at https://www.merriam-webster.com/dictionary/Garrison%20finish. It refers to a come-from-behind victory and is named after the 19th century American jockey Snapper Garrison who was noted for his rallying finishes.

[7] Peter Marks, “The 2000 Elections: The Media; A Flawed Call Adds to High Drama,” New York Times, November 8, 2000.

[8] Chris Matthews, Hardball with Chris Matthews, for January 21, 2016, MSNBC.

[9] Joe Dowd, “A Political Circus, Come and Gone,” Long Island Business News, April 25, 2016.

[10] Steve Kornacki, Hardball with Chris Matthews, for December 29, 2016, MSNBC.

[11] Andrew Malcolm, “Hillary Clinton Wasn’t the Only Big Election Loser,” Chicago Tribune, November 16, 2016.

[12] Adam Shell, “Stocks Hit Superfecta Driven by Trump Win,” Milwaukee Journal Sentinel, November 22, 2016.

[13] http://www.phrases.org.uk/meanings/dead-ringer.html.

[14] “Sports Legend Revealed: Did the Term ‘Upsetʼ in Sports Derive from a Horse Named Upset Defeating Man oʼ War?” Los Angeles Times, May 10, 2011, http://latimesblogs.latimes.com/sports_blog/2011/05/sports-legend-revealed-did-the-term-upset-in-sports-derive-from-a-horse-named-upset-defeating-man-o-.html.

[15] Besides the OED, see http://www.wordorigins.org/index.php/site/hat_trick/.

[16] Per the OED, it was utilized in racing as of 1893.

[17] http://www.etymonline.com/index.php?term=charley+horse&allowed_in_frame=0. See also http://www.wordorigins.org/index.php/site/comments/charley_horse/ and “10 Phrases That Come from Horse Racing,” supra note 5.

[18] http://www.etymonline.com/index.php?allowed_in_frame=0&search=wild+goose+chase. See also http://www.phrases.org.uk/meanings/dead-ringer.html on the equine origins of the “wild goose chase.”

[19] http://www.wordorigins.org/index.php/site/big_apple/.

[20] http://www.phrases.org.uk/meanings/64200.html.

[21] http://www.etymonline.com/index.php?term=give-and-take&allowed_in_frame=0. See also “10 Phrases That Come from Horse Racing,” supra note 5.

Posted in Uncategorized | Leave a comment

CONFESSIONS OF A RECOVERING RACING REGULATOR

Prepared Remarks for the Association of Racing Commissioners International Annual Convention, April 18, 2017

By Bennett Liebman
Government Lawyer in Residence
Government Law Center
Albany Law School

When Ed Martin asked me to speak about confessions of a recovering racing regulator, I was perplexed. What life lessons do I have? I was a member of the State Racing and Wagering Board in New York for nearly 12 years from 1988-2000. What wisdom can I possibly impart to a new generation of regulators? Did I have any lessons?

One of the most perplexing changes to me was in the agenda of the Association of Racing Commissioners International meeting. When I went to ARCI meetings in the 1990s, they were largely excuses to play golf or to go to the local track. I was the substantive part of the agenda, talking about rules and fouls and ethics. Because I’m old, I have a limited recollection of those conventions, but I do remember being on a dinner cruise to the Statue of Liberty one year and talking to Tom Lomangino who ran the Maryland Racing Commission laboratory. I think we concluded that the saying on the Statue of Liberty “Give me your tired, your poor, your huddled masses yearning to breathe free” was actually the poet Emma Lazarus’s subtle reference to Lasix.

Yet now Ed has a convention tackling truly important issues. The only filler in the convention is me. It’s like the traditional poker story often attributed to Warren Buffet. “If you’ve been in the game 30 minutes and you don’t know who the patsy is, you’re the patsy.” I’m the patsy. I’ve gone from the content guy to the comic relief of the ARCI meeting.

In fact, looking at my credentials, I’m probably the founding partner of the firm of former, former and former. Former member of the Racing and Wagering Board, former Acting Co-Chair of the Racing Board, former Deputy Secretary to the Governor for Gaming and Racing, former NYRA Board member, former Columnist, Daily Racing Form, Former Columnist, Hoof Beats.

Also, here is the record of New York racing since I joined on. In 1987, total handle was nearly $3.5 billion. For 2015, the last year for which we have stats, the handle was less than $1.5 billion. When you apply the cost-of-living changes, since I joined the Board, handle is down by nearly 80 percent. Since I joined the board, live harness racing handle – that’s the amount bet at harness tracks on their live product ‒ is down by 97.5 percent. I haven’t even helped the state. Revenue to the state from horse racing is down nearly 90 percent. If you’re looking for whom to blame for the state of New York racing, I could be the primary suspect. I’m approaching the guy who used to run a harness track in New York who said: “I should be in charge of the state’s problem gambling program because I’ve proven conclusively that nobody will bet in any facility that I run.” So you need to question my authority before you accept what I’m saying.

So before I can impart my racing life lessons, let me talk about where I came from.

I was a lawyer who had met Mario Cuomo when I was in law school. When he became Secretary of State in New York, I became an assistant. When he became lieutenant governor, I became his associate counsel and then counsel. I was a special deputy counsel when he became governor. I did much of the state’s ethics work. I helped research speeches. I can say with some certainty that I am the only person to have drafted speeches for both Mario Cuomo and Joe Neglia. I worked on all kinds of major projects. I thought I was a serious, thoughtful, respected attorney.

Of course, the minute I got appointed to the Racing and Wagering Board, I instantly became a hack.

I always get asked about Mario Cuomo’s relationship with racing. Cuomo seemed to have a rocky relationship with racing. It wasn’t that he hated it. He was puzzled by the fascination people had with it. He was baffled by people’s interest in it. And he had a decent amount of experience in it. He grew up in Jamaica, Queens, which had New York’s most successful track, Jamaica. He went to junior high school at a location less than two miles from both Aqueduct and Jamaica. His law partner and close friend Peter Dwyer was a diehard racing fan. Dwyer and his pal Freddy Flynn would even in the old days drive to Harrington Racetrack in Delaware, because Harrington was the only track in the Mid-Atlantic that was open between Christmas and New Year’s. Dwyer would come into the office and say “My ex-partner is the Secretary of State, and I’m the only lawyer in Brooklyn who doesn’t have a pass to the track.” Cuomo’s political career was largely launched by Jimmy Breslin who spent considerable time at the track. At the Department of State, we had a number of racetrack enthusiasts, besides myself. Our administrative director swore that he had a computer program that would beat the harness tracks, Cuomo’s top assistant ended up doing some horse owning and breeding, and our top government lawyer was in a fraternity with an assortment of future thoroughbred trainers. One of his early jobs was to run from Aqueduct to the street outside the track to convey race results to his frat brother’s father who was a local bookie. Oddly enough, our overall boss in the governor’s office – a non-racing type ‒ Mike Del Giudice, became the chair of NYRA. Maybe because Cuomo came from Queens, Governor Carey put him on a racing study panel, and he came away from it saying that the white-haired guy, future Hall of Famer Phil Johnson, was the one who knew anything, but Cuomo largely saw us as non-serious, biased supporters of racing, whose opinions we should downgrade.

The one moment I do remember is him coming into the office one day and saying that his wife, who ended up being a close friend of Mary Lou Whitney, was going to Belmont Park that day, and he was studying the entries. There was a horse named State running, who was actually a regally bred horse trained by Woody Stephens. Cuomo was the Secretary of State. State had five letters in it. It was in the fifth race running out of post five. Destiny. Kismet. He bet. And of course, the horse finished fifth.

Initially, I felt that I seemed well placed in 1988 to be on the Racing Board. My parents just before my birth lived three blocks from Aqueduct. They actually entered a contract to buy a house about 100 yards from Aqueduct. You could see Roosevelt Raceway from my high school. Much of my college career was spent at Saratoga Raceway. My suitemates actually sent a letter to Stan Bergstein asking for job advice. One of my suitemates became a harness driver and groom. I helped work on a harness tip sheet in law school. I had season tickets to Saratoga, before the era of Chris Kay, so they were affordable. My wife grew up on Meadowlands Street in the hamlet of Delmar, New York.  Many of you may remember the late Clyde Hirt from Sports Eye. My next-door neighbor dated Clyde Hirt’s daughter. What else was I going to do with my life? I had the right breeding to be a racing commissioner.

I was the first of the Slingerlands members of the Racing and Wagering Board. From my appointment until the termination of the Racing and Wagering Board, there was always one member from the hamlet of Slingerlands, which has a population of approximately 7,500. After being reaccomodated, I was followed by Cheryl Buley in 2000, and Cheryl was replaced by my neighbor Dan Hogan, who served until the board was legislated out of existence and replaced by the Gaming Commission in 2013. Thus, for nearly two and a half decades, there was a Racing and Wagering Board member from Slingerlands, New York. We had a Slingerlands seat.

I can remember buying a train ticket from Penn Station to Belmont Park in 1989. I asked for a receipt, and the clerk said, “What a life. Getting paid to go to the racetrack.”

But glorious it was not. It was not the part of Garrison Keillor’s Lake Wobegon where “all the women are strong, all the men are good looking, and all the children are above average.” We were the part of Lake Wobegon “that time forgot, and the decades cannot improve.”

And time had truly forgotten the Racing and Wagering Board. Our main office was in Manhattan near Little Italy and Chinatown. Today it’s an NYU dorm in the heart of what is now trendy NoLo. Back then, it was the dive of dives. It was the building where the heroin in The French Connection had been lost, and it must have permeated the building and its inhabitants. Everything in the building not tied down would be stolen. The subway rumbled right under the building, so you had to stop hearings every 10 minutes because the noise was deafening when the trains went by. We shared the building with the state’s Public Service Commission, which, unlike ours, was a substantive agency. Their Albany-based personnel were so scared of going to the building that they travelled in convoys on subways from Grand Central Station to get there. They would not send material to New York City except by UPS, since they assumed that any other mode of transport would get lost. We had no computers. We had, basically, IBM selectric typewriters and a few word processors that used floppy disks. We had no faxes.

I worked mainly in the Albany office, which was far nicer but is only remembered because a third of the small floor we occupied held a large craps table. We were the office with the craps table. In order to use a fax, I had to walk about 500 yards over to my friends at the governor’s office and ask them to fax any info.

I recall our big hearing at the Board in the second month was there. We had an all-day hearing to consider what to do about NYRA’s termination of its gap attendants. I got up the next morning and went to my local newspaper store, and I saw this huge, huge write up of the story by Clyde Hirt in Sports Eye. I had never met Clyde Hirt, but I knew he wasn’t at the meeting. Instead, our chair, Richie Corbisisero, had one of the lawyers in the office take long notes on the meeting and then gave them to Clyde who reran them as his entire story. I thought I had followed Alice down the rabbit hole.

It got worse. Everything about it was old. We had two secretaries in New York in their 80s, Ruthie and Helen. They had the lowest-level jobs in the State, and they were working to provide a living for their sons who were in their 50s and were still not self-supporting.

I got the impression that they threw anyone who had a restaurant background into the agency. Our chairman’s family ran a large restaurant and catering facility. Our director of bingo had run a catering hall and bowling alley in Staten Island. The family of one of our assistant counsels ran a large kosher deli and catering facility on Long Island. We had an investigator who ran a restaurant in New York’s northern suburbs. When the director of bingo retired, he was replaced by a guy who did not run a restaurant, but he had the same name as the people who ran Nathan’s hotdogs; so, obviously, they sent him to the Racing and Wagering Board.

Our meetings when I started at the Board could have been held in secret. I only recall one person showing up for a Board meeting in my first six years there. We had open meetings that nobody attended. We would hold the meeting, and Richie Corbisisero would call up Clyde Hirt and tell him the decisions. We could have met in the backroom on a takeout Chinese restaurant and nobody would have known. We had a press officer who wasn’t allowed to talk to the press. It got a little bit better when Mike Hoblock became chairman and we tried to take the Board show on the road, but, even then, we would hold meetings at racetracks, and the track leadership wouldn’t show up for the meeting.

A year before I got to the Board, there was an infamous incident where Mario Cuomo had called up the office wondering about the agency’s recommendation on a bill to reduce the taxes paid by harness tracks. The Board really didn’t have a position, but other agencies had suggested that the bill would be signed and the Board should recommend approval.

Cuomo phoned asking for an explanation of the approval recommendation. He went through the whole agency as either people weren’t in the office or nobody in the office could give him any explanation of the agency’s position. Just a typical day at the Racing and Wagering Board.

And we got worse. During the early- and mid-1990s recession, we started to shed staff. By 1996, we had nobody around. We shed all our OTB people. We shed our branch offices. We had one racing investigator on central staff. We had one racing administrator on staff in Jim Gallagher, and we had 2.5 attorneys. We had no hearing officers; so I held all the hearings. We could hardly do drug cases because we had no personnel. We had the Flanders case pending for years.

We were saved from being laughingstocks by the arrival of Ed Martin and our chairman, Mike Hoblock, at our agency in 1997, and we began to have resources to actually do our work. We were better. Much better. We had an OTB staff. We did investigations. We did hearings. We had faxes and the Internet.

Yet, it seems that we never grew up to be a real agency. We never climbed out of the rabbit hole. I remember Mike Hoblock saying something that went like this. If the State Health Department tells a facility to jump, the facility says “How high?” When we say jump, everyone ignores us.

I once shared a meal with a former OTB official who simply said, you might put out a policy directive. We would ignore it. You did it again, and we would continue to ignore it. We figured you would lose interest and not come back a third time. The industry will always see racing commissioners the way Tom Meeker at Churchill Downs once characterized them as “gnomes” or those “little cloisters that meet in their own little states and make these grand and wise decisions.” I think I said in a speech fifteen years ago, that tracks thought racing commissions were two-thirds of the old Perry Mason objection. Commissioners were not necessarily incompetent but certainly immaterial and irrelevant.

So with that look back at my career as a racing bureaucrat, what actually have I learned?

If you’re a racing commissioner, you will always be considered part of the problem and not the solution. You will not stop decades of narrative. Racing commissions are always going to be viewed as clueless or out of touch.

It doesn’t matter that racing administrators here today, like Ed Martin, Mike Hopkins, Larry Eliason, Charley Gardiner, John Wayne, and Rob Williams from New York and other states, have had decades of experience in racing and probably more relevant experience than many people running tracks. It doesn’t matter that when racing was popular, nobody thought racing commissions were responsible for the sport’s popularity. But now in harder times, it’s the racing commissions who are to blame. That is the way it has almost been since the advent of the racing commission. For eighty years, the narrative has been set that racing commissioners are clueless. You are not going to change that. I used to think when I started as a racing commissioner, please don’t make us look like the NCAA. But the NCAA has clout. I don’t think we ever reached the NCAA level. Instead, racing commissioners are seen as a combination of W.C. Fields and Captain Hook’s assistant, Mr. Smee. Windbags and toadies. We’re like political versions of stewards. It is so ingrained in racing that you are not going to change the narrative.

If Abe Lincoln, George Washington, and Eleanor Roosevelt returned to earth as a racing commission, they would be considered political hacks serving as the three blind mice of racing.

Iron rule of politics: When an elected official says that they are a friend of racing, and this might not be true in Kentucky, the odds are 3-5 that they are not a friend of racing. Politicians hear “horse racing,” and they see dollar signs.  In some states, they see Jockey Club-types ponying up real dollars. In other states, they see it simply that if someone can afford to lose money to race a horse, they certainly have enough money to invest in political candidates. Election season brings out the friends of racing.

Sometimes, I think the wisest words on politics and racing were said by President Rutherford B. Hayes in 1879. Before the start of a race in Kentucky, Hayes said, “Ladies and Fellow Citizens, I am told that the race is ready to be run and by speaking I should only delay the enjoyment. With so good an excuse for saying nothing, I am sure you will be glad to know that I propose to let the race go on.”

Where is Rutherford B. Hayes when racing needs him?

Again, this statement might not be applicable in Kentucky, but budget people in other states do not like horse racing. They see it – pardon my Yiddish – but as schnorrers, beggars, or posers looking for larger pieces of a diminishing pie. They all see less and less money coming in to the states from racing and yet, at the same time, they see more and more people looking for the crumbs. In the six gubernatorial administrations I’ve seen in New York, most every counsel or program person assigned to racing quickly wanted out. Referring to the movie, horse racing is the Chinatown of the state budget and governmental world. It’s so fouled up that nobody can deal with it.

Because it’s so unimportant fiscally, it takes on another serious repercussion. It becomes the opposite of The Godfather. Racing politics isn’t business. It’s personal. Track representatives get drunk and badmouth politicians. It happens all the time, regardless of parties, and the pols don’t forget. In New York, Governor Eliot Spitzer saw Senate Republican leader Joe Bruno as an enemy of NYRA and supported NYRA as the enemy of his enemy. The Assembly Democrats in New York always saw that racing was important to some Republican leaders, so they would simply hold racing hostage until their other deals would be done.

Nobody takes the racing industry’s financial numbers seriously. The numbers are nice, but, seriously, nobody in government remotely believes them. They are far too used to racing CEO’s complaining annually that the legislature is killing them. You can put your financial impact statements into as many press releases as you want, but nobody believes that a sport where attendance, handle, and breeding are constantly decreasing can continue to be the support of so many thousands of jobs.

You ain’t going to change the face of racing. There’s a reason there is no racing commissioners wing of any racing hall of fame. Nobody’s walking around the racetrack thinking how good racing was when Ashley Trimble Cole or Herbert Bayard Swope chaired the racing commission. Nobody even remembers them. Nobody remembers a racing commissioner or a boxing commissioner. We, you and I, are yesterday’s news.

What should you be doing about it?

I did not think this way when I first joined the Racing Board but after simulcasting and international racing and nearly universal account wagering, there simply is no reason to oppose uniform rules. The thought process that now goes into uniform rules is exceedingly better than it was twenty years ago. It wasn’t always the case, but there now is one world of racing. What happens in New York does affect Kentucky, Florida, California, and even England. Our differences are minor and often pointless. Unless you have an incredibly damn good justifiable public policy reason, uniformity is best. It’s always been true about the rules of the race, but now it’s true of most every rule that racing commissioners promulgate. Racing commissioners do look like the three blind mice when they ignore the need for uniformity.

Respect the sport. Horse racing is really about the oldest sport that exists. It brings out so much to everyone. What sport do we have that has a lineage out of Winston Churchill? Winston Churchill legalized the tote in the UK when he was Chancellor of the Exchequer in the 1920s, and his maternal grandfather Leonard Jerome first brought pari-mutuels to America in the 1870s. Supreme Court justice Louis Brandeis, one of the people least likely to ever wager, wrote about thoroughbred horses, “I supposed them to be lank, thin and to the uneducated mind unbeautiful. Quite the contrary. They are the most beautiful living creatures I have ever seen.” Benjamin Disraeli coined the phrase “dark horse” to mean an outsider.

 Horse racing has even given the English language a richer vocabulary. Words and phrases like  “workout,” “dead heat,” “hands downs,” “all ages,” “turf war,” morning line,” “pari-mutuel,” “parlay,” “trifecta,” “tipster,” “hot tip,” “daily double,” “quinella,”  “across the board,” “exacta,” and “out of the money” all come from racing. Even the nickname “The Big Apple” for New York City is probably a racing term.

 When I was on the NYRA Board, I used to get passionate about our history of New York racing. How could the Futurity, which was the most important race in America for decades, be downgraded in status? How could the Ladies Handicap, the oldest stakes race in the country for fillies and mares, become ungraded? Part of what’s great about racing are its traditions. It’s why people weep when they hear “My Old Kentucky Home.”

 My parents and my family got drawn into racing when I became a fan in my early 20s. It brought out the absolute best in my family. They never had a bad day at the track. Our trips were planned around going to the track. My father – who probably would not have run after Joe DiMaggio –

would run after Andy Beyer, Harvey Pack, or Steve Crist. No sport brought us together as much as racing. No sport ever could. We need to respect the sport. It’s why racing should be the king of sports.

 Racing commissioners need to take the lead on safety. I was nominally, with Gordon Hare of the Oklahoma Racing Commission, the chair of the rules committee in the mid-1990s. We didn’t do much. Nobody except the Jockeys’ Guild even bothered to lobby us. Yet the Jockeys’ Guild asked us to take a position on safety vests. We supported them fairly early, and it actually made a difference. And you can make a difference. You can improve the lives of the people who work in the sport and the animals who are our principal athletes. It should be easy for commissioners to do the right thing here.

The other obvious right thing is charity. There are so many worthwhile charities associated with horse racing, horses, riders, and the backstretch communities. You need to set a good example here for everyone.

Ethics. This ought to be so easy. Obviously, act ethically. There’s a moral imperative here, but there’s a pragmatic one here as well.

This is racing. Everyone sees you at the track or at an OTB. They’re suspicious. Are they making a bet? What are they telling the stewards? What kind of inside info do they have? Will the stewards give the commissioner’s horses more slack because they want to keep their jobs? Are they getting free meals in the trustee’s room? Stay out of it. You are immediately suspect. You don’t need to have everyone looking at you like you’re taking money away from the bettors.

More pragmatically, it’s racing. People understand racing scams. They almost expect them. You’re far more likely to get caught than in most any other activity. I think I could go through the history of the Racing Commission in New York and point out the scandals. The odds are you’re going to get caught. So for your own self-interest, do the right thing.

Finally, and I have been saying this for as long as I became a commissioner, you work for the public, and the public are the fans of racing. Without fans – and most of them are gambling on the sport – you have nothing. They don’t have lobbyists. They don’t have clout. They pay for the sport through their betting dollars. No sport has a closer relationship to its fans. They are the true investors in racing. Never forget it. You need to stand up for their rights. They are what racing needs.

You may not be able to change the course of horse racing. You are certainly not going to change the narrative of the clueless racing commissioner, but you do have the power, if only in a humble and modest manner, to make things better for the people in racing. Stand up for these people, please, because racing is our greatest sport. Please make it better by respecting the sport and standing up for its fans and participants. You’ve been granted a great privilege here in serving as racing commissioners. Please pay it forward.

Posted in Uncategorized | Leave a comment

The 2017 Gubernatorial Budget and the Future of the New York Racing Association

By Bennett Liebman
Government Lawyer in Residence
Government Law Center, Albany Law School

1. Introduction[1]

It has been four and a half years since the New York Racing Association (NYRA), which runs the three principal thoroughbred racetracks in New York State (Aqueduct, Belmont and Saratoga), effectively became a state agency (with 12 of its 17 members appointed by state officers) known as the New York racing association reorganization board (Reorganization Board).[2] As initially enacted, the Reorganization Board was scheduled to go out of existence after three years in the fall of 2015.[3] Budget legislation passed in 2015 increased the life of the Reorganization Board for another year,[4] and subsequent legislation passed in 2016 continued the Reorganization Board for another year.

In 2016, a variety of proposals were made which would have eliminated the Reorganization Board and re-established NYRA as a private body.[5] The Reorganization Board itself offered a general plan for private control.[6] Governor Andrew Cuomo offered a program bill which would have terminated the Reorganization Board,[7] and the Legislature passed a bill providing for a privatized NYRA.[8] In the absence of a consensus on what to do about the Reorganization Board and faced with the prospect that the Governor might veto the privatization legislation, the Legislature quickly reversed itself on the issue and passed a bill proposed by the Governor extending the life of the Reorganization Board for another year.[9] The initial legislative bill ending the Reorganization Board has been pocket vetoed by the Governor.[10]

2. The Governor’s 2017 Budget Proposal on NYRA

Governor Cuomo in his January 2017 budget proposed legislation that would end the Reorganization Board and return NYRA to its former private not-for-profit status.[11] The legislation terminating the Reorganization Board would take effect on April 1, 2017. Unlike the Governor’s 2016 program bill, the 2017 budget legislation was specifically endorsed by the management of NYRA,[12] and the prospect for the passage of some form of NYRA privatization legislation has to be considered very high.

The 2017 budget legislation is basically a variation of the Governor’s 2016 program bill[13] with a certain number of added breaks and protections granted to NYRA.

Among the proposals continued from the program bill, the budget legislation would create a 15-member board. Of the 15 members, eight of the members would be appointed by the current executive committee of the Reorganization Board. One would be the CEO of NYRA. Six would be selected by the Governor. Legislative leaders would pick one member each of the six gubernatorial leaders, leaving the Governor with four appointees. The six publically appointed members would all need to be New York State residents.

The Governor would select the initial chairman of the NYRA Board who would serve for a three-year term.[14] Subsequent chairmen would be appointed by the NYRA Board.

Initial NYRA Board members would have staggered terms. Subsequent NYRA Board members would serve full three-year terms. No board member could serve more than the lesser of three terms, or nine years.

The New York horsemen and the New York breeders would not appoint a voting member to the NYRA Board. Instead, each group would appoint one ex officio non-voting member to the NYRA Board. This is the same situation that exists under current law, where the horsemen and breeders are relegated to ex officio status.[15]

The Franchise Oversight Board[16] can require NYRA to hire an independent financial advisor, a corporate restructuring professional, and submit a corrective action plan (subject to the Franchise Oversight Board’s approval) when NYRA’s financial position has deviated materially from its financial plan.

Added to the program bill of 2016 were two proposals requested by NYRA. NYRA is given authorization at Belmont Park[17] to run races after sunset.[18] These races must end before 11:00 PM, and the times of the races have to be coordinated with Yonkers Racetrack.

NYRA is also given authorization, subject to approval by the horsemen and the breeders, to reduce its winter racing schedule. NYRA currently is compelled to run 95 days at Aqueduct between December and April.[19] Under this bill, NYRA, if it were to receive permission from the horsemen and breeders, could reduce the racing dates as it sees fit.

NYRA also obtained some benefits from certain removals from the 2015 program bill. NYRA will no longer be subject to the Freedom of Information Law and the Open Meetings Law. There will be no cap on revenues from VLTs to NYRA. There is no requirement that NYRA must spend $16 million per year on capital expenditures at Saratoga. Only one gubernatorial appointee is required on any NYRA committee established pursuant to statute.[20]

Finally, the Franchise Oversight Board under the prior 2016 program bill had broad powers to recommend to the State budget director to end NYRA’s receipt of racing support payments from VLTs at Aqueduct. Under the budget bill, the termination of support payments can only occur after “two consecutive years of material losses due to circumstances within the control of the franchised corporation, as determined by the franchise oversight board.” The Franchise Oversight Board “may by majority vote request the director of the budget to impound and escrow racing supporting payments.”

3. Summary of Provisions Affecting the Governor’s Powers

As compared to the 2016 program bill, the Governor’s office largely retains all its prior appointment powers. The Governor gets to appoint four of the 15 members of the Board and its first chairman. Should the Governor so choose, through his appointments to the current Oversight Board, he could effectively stack the existing executive committee to de facto grant himself further NYRA Board appointments. The Governor’s powers over the NYRA Board appointments are diminished only slightly.

The Franchise Oversight Board also retains much of the powers it was to be granted under the 2016 program bill.

Where the Governor seems to have limited his power vis-à-vis the 2016 program bill is in placing fewer limits on the racing support payments provided to NYRA from VLTs. The 2016 program bill limited NYRA’s VLT revenues to a maximum of $46 million. In the 2016-2017 State fiscal year, NYRA would have received $59 million in VLT revenues.[21] Yet the 2016 budget legislation effectively put a floor on VLT payment to NYRA at $54.96 million.[22] Since that same legislation diverted certain Aqueduct VLT revenues to support Nassau County Regional OTB, it appears that the maximum that NYRA will receive in future VLT payment will be the $54.96 million number. The State has, effectively, already placed limits on NYRA’s potential VLT revenue stream.

The Governor also removed the requirement contained in the 2016 program bill that NYRA remain subject to the Open Meetings Law and the Freedom of Information Law. Yet, this is not a limitation on the Governor’s power but is simply ending a requirement that has been placed on NYRA. In terms of the Governor’s powers regarding NYRA, the 2017 budget bill is only slightly more restrictive than the 2016 program bill.

4. The Effect on NYRA

This is a bill that NYRA’s current management under CEO Chris Kay could only have prayed for. This is Chris Kay 2.0. The CEO is made a member of the Board. The current Reorganization Board—which has basically given NYRA management a blank slate—largely picks its successor, which effectively means that the compliant Reorganization Board gets to remain as a private not-for-profit board. While there are term limits on board members, they largely will not kick in until the mid-2020s. The horsemen and breeders do not have formal representation on the board, which is similarly in accord with NYRA’s initial recommendation on privatization. The status quo will prevail.

Not only will the status quo prevail but NYRA will get broader authority. The sunshine laws will no longer apply to NYRA, lessening some public scrutiny of the Kay regime.

NYRA gets to have night racing at Belmont Park, which races in May through July and September through October. While the costs of lighting the facility and the parking lots are high, this would potentially make it easier for NYRA to host the Breeders’ Cup. While regular night racing has hardly been a success in the United States, it may also be that NYRA management envisions night racing as a gateway to establishing a broader evening entertainment experience at Belmont. Chris Kay is a former Universal Studios executive, and NYRA may envision something akin to a Universal City Walk at Belmont Park.

An end or a limitation to winter racing may similarly save NYRA considerable revenue.  Maintaining winter racing at Aqueduct has always been a priority of the breeders and the horsemen. Accordingly, it will be interesting to see if and how NYRA tries to use its influence and power to persuade horsemen to limit winter racing. Will NYRA go easier on pushing for anti-Lasix regulations?[23] Will NYRA try to use its power over stall space allocations to deal with recalcitrant horsemen? Will it provide added revenue or other perks to horsemen and breeders as a way to coax these groups into supporting a limitation on winter racing?

5. Who Loses Under this Bill?

The short answer is the horsemen and the breeders lose. Under the Legislature’s 2016 vetoed bill, they became voting members on the NYRA Board. Under the 2017 budget bill, they have again been relegated to ex officio status. Similarly, added pressure will be placed on these groups to accede to limitations on winter racing.

The New York OTBs are probably losers here as well. Less NYRA racing in the winter is simply bad for OTB handle. Also, if NYRA moves much of its Belmont racing to the evening, the OTB’s lose a daytime product. Since betting at the OTB’s has become largely a daytime experience, nighttime Belmont racing will unlikely be beneficial to the OTBs.

Also, if NYRA does implement Belmont evening racing, those tracks that race at night might be adversely affected. This would include the upstate harness tracks who would be running at the same time as Belmont, such as Saratoga Harness, Vernon Downs, Tioga Downs, Batavia Downs and Buffalo Raceway. Also likely to be affected are those out-of-state tracks that run in the evening such as the Meadowlands in New Jersey and Penn National in Pennsylvania. These tracks would suffer from added competition against their simulcasting signals.

There may be potential complaints from Nassau County communities around Belmont Park, such as Elmont and Floral Park, which have traditionally voiced opposition to NYRA evening activities at Belmont. Given the influence that Republicans in Nassau County have in the State Senate, this opposition may cause problems for NYRA in achieving these goals.

Finally, if you believe that the current regime at NYRA is good for thoroughbred racing, then this legislation will clearly be perceived as beneficial. NYRA management will largely be unchanged. If, however, you regard the NYRA regime as a self-perpetrating group largely oblivious to the needs of racing and racing fans, be prepared for eight more years of the same.

6. Issues in the Budget Bill Draft

Reconverting NYRA back to a private organization does bring with it a string of issues. If the point of having a new privatized NYRA was to allow for long-term planning, why is there no long-term planning committee? What happens to the availability of records that were created when NYRA was a public body? What happens to the availability of the records of the pre-2012 NYRA which were arguably available during the time that NYRA was a public agency? What happens to the existing NYRA website showing the content of prior Board meetings and the materials used to discuss these meetings? What happens to the ability of the State Comptroller to audit NYRA?[24] Finally, what happens to the internal ethics provision that the Reorganization Board put into place in 2012 and 2013—no fund raisers on NYRA property, no campaign contributions from NYRA officers, and no campaign contributions from NYRA itself or a NYRA created PAC? What happens to these actions of the Reorganization Board?

Finally, there are somewhat confusing issues as to when a new NYRA board would actually come into existence and replace the Reorganization Board. The effective date clause in the bill states that the new board provisions “shall take effect upon the appointment of a majority of board members.” Yet the executive committee of the Reorganization Board “shall continue to exist until such time as the appointments required hereunder are made.” On top of that, the members appointed by the executive committee cannot vote until they have a racetrack management license. So who would be in charge at a time when a majority of new members has been named, but an insufficient number of them has licenses? Who runs NYRA under this possibility?

Perhaps all these questions will be answered when the State’s 2017 budget is passed.

 

[1]  This essay uses materials previously used in earlier essays on this overall topic which include “The Future of the New York Racing Association Reorganization Board,” https://saratogainstitute.wordpress.com/2016/03/30/the-future-of-the-new-york-racing-association-reorganization-board/, “The Future of the New York Racing Association Reorganization Board: Take 2,” https://saratogainstitute.wordpress.com/2016/05/04/the-future-of-the-new-york-racing-association-reorganization-board-take-2/, “New York State and the New York Racing Association: Can’t Anyone Privatize These Racetracks?,”  https://saratogainstitute.wordpress.com/2016/06/08/new-york-state-and-the-new-york-racing-association-cant-anyone-privatize-these-racetracks/ and “NYRA Enters the World of Chelm,” https://saratogainstitute.wordpress.com/2016/08/01/nyra-enters-the-world-of-chelm/.

[2] L. 2012, Ch. 457.

[3] Id. at § 4.

[4]  L. 2015, Ch. 59, pt. PP, § 1.

[5] See generally “NYRA Enters the World of Chelm” supra at note 1.

[6] The video presentation of the Reorganization Board’s plan recommended at its April 12, 2016, meeting can be viewed at https://www.nyra.com/belmont/video—april-12-2016-board-meeting/.

[7]  Governor’s Program Bill #24, (2016); https://www.governor.ny.gov/sites/governor.ny.gov/files/atoms/files/GPB24_NYRAREORGANIZATION_BILL.pdf.

[8] Assembly Bill No. 10429, same as Senate Bill No. 7918 (2016).

[9] L. 2016, Ch. 73, pt. C, §1.

[10] The legislative proposal, A. 10429, was submitted to the Governor’s Office on December 22, 2016, and was not acted on by the Governor. Since the legislative session had ended by the time that action was due on the bill, without gubernatorial approval, the legislation was de facto vetoed under Article 4, §7 of the State Constitution. See also Yancey Roy, “Key Senator: Cuomo Proposal Allows Gov Control of NYRA,” Newsday, January 19, 2017.

[11] FY 2018 New York State Executive Budget Revenue Article VII Legislation, Part NN. The part is entitled “Re-privatize the New York Racing Association,” https://www.budget.ny.gov/pubs/executive/eBudget1718/fy18artVIIbills/REVENUEArticleVII.pdf, Assembly Bill No. 3009, same as Senate Bill No. 2009.

[12] Tom Precious, “Cuomo Proposes Returning NYRA to Private Control,” BloodHorse, January 18, 2017, http://www.bloodhorse.com/horse-racing/articles/219148/cuomo-proposes-returning-nyra-to-private-control.

[13] See note 7 supra.

[14] The power of the Governor to select the first chairman of the privatized NYRA was similarly in the 2016 plan suggested by the Reorganization Board. See note 6 supra.

[15] Racing, Pari-Mutuel Wagering and Breeding Law, §207.1.b.

[16] The Franchise Oversight Board is a five-member public agency designed to represent the State in its real estate dealings with NYRA and to enforce and monitor the State’s agreements with NYRA. See Racing, Pari-Mutuel Wagering and Breeding Law, §212. The Franchise Oversight Board is largely a continuation of the former non-profit racing association board that was established to monitor NYRA in 2005. See L. 2005, Ch. 354.

[17] Belmont Park in recent years has raced in May, June, the first half of July, September and October.

[18] Currently, NYRA cannot race after sunset. See Racing, Pari-Mutuel Wagering and Breeding Law, §203.

[19] Racing, Pari-Mutuel Wagering and Breeding Law, §238.1.(d).

[20] Under the 2016 program bill, three publically appointed members, including at least two appointed by the Governor, had to be on each statutory committee.

[21] See New York State, Gaming Commission, Video Gaming Report http://nylottery.ny.gov/wps/portal/Home/Lottery/Home/Video+Gaming/VIDEO+GAMING+REPORTS.

[22] L. 2016, Ch. 60, Part SS. See Tax Law, §1617-a.

[23] The leadership of the New York horsemen has been vocally opposed to ending the race-day use of the drug Lasix, which is used overwhelming in North American racing to limit bleeding in race horses.

[24] While §209 of the Racing Pari-Mutuel Wagering and Breeding Law authorizes the State Comptroller to audit NYRA, the Comptroller’s authority to audit non-governmental entities has been limited by the State Court of Appeals. See generally Matter of New York Charter Schools Assn., Inc.  v. DiNapoli, 13 N.Y.2d 120 (2009). If NYRA is a private organization, NYRA may well challenge the audit authority of the Comptroller.

Posted in Uncategorized | Leave a comment

Assessing and Updating the Rules of the Race

By Bennett Liebman
Government Lawyer in Residence
Government Law Center
Albany Law School

Speech before The Racing Officials Accreditation Program
Tucson, Arizona
December 5, 2016

Thank you for having me here today. And thank you for that overly kind introduction which only proves one thing: I’m old.

I got the request to speak here last week; so I’m somewhat of an added starter here. I should be wearing substitute silks. It has been suggested that I drew in from the also-eligible list. I have tried to do some research for the speech, since I’ve said and written a little on this overall topic for about a decade. I spend a good deal of my time writing articles of critical importance to gambling and horse racing. My recent law journal article on the history of dog racing in New York State was a real page-turner, and you can look forward to even more cutting-edge articles awaiting publication on the history and meaning of the term “pari-mutuel” and how New York racing developed a theme song for the Belmont Stakes.

Stewards and racing officials have been just about my favorite people in the business. Racing officials were incredibly kind and generous to me when I became a commissioner. My friend Leo Connelly brought me out to his office in Syracuse to show me how to watch races. Mark Thomas, who was our assistant state steward at NYRA, gave me all his cassette tapes from the first national class on stewarding. The late NYRA steward Dick Hamilton became a cherished close friend. Wendy Davis let me participate in teaching classes to stewards. In fact, Leo Connelly and I got to be the moderators for the early programs we held here on stewarding during the symposium.

That said, and even though I have said little in recent years on this topic, I find, somewhat unfortunately, that things have changed far little than they should have, and I can actually largely update what I was saying in 2006.

From a historical perspective, horse racing officials were the leaders in sports technology. We were the worldwide leaders. The sports world started using photo-finish cameras in track and field for the 1932 Olympics in Los Angeles. Racing built on this innovation, and racing was the first professional sport to add photo-finish cameras and electronic timing in approximately 1935. In the mid-1940’s, racing became the first sport to authorize film and tape reviews of race. Racing was the first sport authorizing objections and inquiries to be resolved by game officials through reliance on film and tape.

Of course, there were some hiccups along the way. You can see that Massachusetts – not surprisingly ‒ had its problems in trying to implement photo finishes. They even banned the photo-finish camera for a time in the 1930’s. And even into the 1970’s, especially if you ever spent time at Saratoga harness, you would continue to hear fans complain that the photo-finish camera was rigged or favored either the outside or the inside horse, depending upon what losing horse they wagered on. It may not have come easy, but we were the leaders.

But we’ve been joined by others in recent years. Every major sport now has significant elements of video replay and post-live action review available. Have we been surpassed? Well, both yes and no. They may have more technology, designated replay officials, elaborate procedures and even bunkered troops reviewing tapes in distant cities. But they’re basically reviewing objective decisions. Racing is still the one professional sport using replays to make decisions on judgment calls. The others basically don’t.

Look at the other major sports. Baseball reviews catches and safe and out calls and whether the ball left the park. The only thing remotely subjective are the interference plays, and by now the rules on an issue like home plate interference are practically black and white. If it becomes anything near subjective, the initial decision is upheld.

The NFL calls are also designed to be totally objective. Was the ball caught? Was it a touchdown? Was it out of bounds?

Hockey is even more restrictive. It’s only for goals, and everything is designed to be objective. Was there a goal? Did time expire? Was the net dislodged before a goal?

The NBA is a little trickier. The on-court decisional reviews are supposed to be objective. There are also reviews of fights and flagrant fouls because major penalties have to be assessed immediately, but for the on-court action, the review is objective.

In tennis, where the replays have probably been most successful, we’re looking at line calls, and the video decisions are quick and non-controversial.

So we’re seeing a replay world, where we are looking at replays largely focusing on objective factors. Nobody is reviewing balk calls, check swings, pass interference, or intentional grounding, boarding, or charging. We also are not reviewing certain decisions that could be objective, but would involve changing the entire ethos or pace of the game. You could arguably objectively review the strike zone in baseball, travelling in basketball, boarding or all offsides calls in hockey, and foot faults in tennis. Nobody is willing to go that far.

So the issue is what horse racing should be doing in the age of replays, understanding that officials in racing make largely subjective rather than objective calls. I would suggest that racing’s goals should include how best to use technology to help the on-site racing officials, how to use technology to assess the performance of racing officials, and how to show our fans that we are working to improve the quality and the consistency of our decisions.

My basic suggestion is that we need to nationally unify our rules governing the running of races, unify our rules on entries, and keep racing commissions out of the review of steward judgment calls.

It ought to be obvious that we need national uniformity in our race rules. There no longer are meaningful borders between states on racing. Everyone bets on everything. New Yorkers arguably have – at least as measured by purses – the best racing in the country. But most of the money bet by New Yorkers is bet on out-of-state tracks. 72% of the money bet at New York State tracks is bet by out-of-staters. And most obviously to me, this should be an obvious move. It’s not a hard policy call like our drug rules; it’s a no-brainer to have a uniform rule.

And there’s a need for a uniform rule. As our jurisdictions moved away from the Gertrude Stein rule that “a foul is a foul is a foul” to the more Monty Python notion of “The Meaning of (Foul) Life,” states went their separate ways.

New York, for instance, banning interference, impeding and intimidation, or the foul, altered the finish of the race. New York’s rule on the meaningfulness of fouls is actually written in the alternative, so it’s incredibly hard to analyze it. The model rule is probably written better banning interference, impeding and intimidation where the stewards believe the interference altered the finish of the race.

Other states are even different. Arizona has no ban on intimidation. It does require racing room and you can’t keep a horse in the pocket, which reads like some odd attempt to prevent Angel Cordero from retroactively riding in Arizona. Oregon and Colorado also require racing room.

California is as oddly worded as New York and includes language that seems to narrow the situs of a foul only to those areas where the incident would have affected the race finish, while broadening the nature of a foul to include placements to where a horse was reasonably expected to finish.

Ohio retains the rule that a foul is a foul is a foul. In the UK and Hong Kong, fouls are only determined based on the effect solely of the horses involved in the incident.

I used to be bothered by the lack of any definition of interference, impeding and intimidation, but you see all the other sports which don’t specifically define major terms. There is no baseball rule defining a check swing, no NFL rule on what constitutes holding, and not much in the NHL on what constitutes boarding. It just is what it is.

But how can intimidation or impeding be a foul in one state and not in others? What’s the point of a pocketing rule or a racing room rule? Do you have to cross in front of a horse to cause a foul? What if you just force a horse wide? And then California adds making the part of the race in which the foul occurred part of the foul calculus. What ever became of the notion of the hazards of the start?

And obviously we have enormous problems with applying what I’m terming the Monty Python meaningfulness rule. It cannot just be an excuse for scrutinizing fouls in races.

Should we only apply the rule involving placing decisions between the fouler and the foulee? Do we care if the foulee would move up to a position where it would have earned a higher check, or should it only involve cases where the horse would have finished in the top 3 or 4 places? And most importantly, what degrees of proof are needed to determine whether a foul affected the result? You can go anywhere from finding that there was no reasonable doubt that it affected the result to some credible evidence that it might have affected the result. We have a mess on our hands. We need a national uniform rule on what a foul is and how it affects the finish of the race.

As an aside, I love the notion of taking a Wayback Machine back to the past to apply the Monty Python rule retroactively to past major events. Secretariat certainly doesn’t get taken down in the 1972 Champagne Stakes, where he won by two lengths. Equipoise probably wins three additional races. Dr. Fager probably doesn’t get taken down in the 1967 Jersey Derby, where he won by 6 ½ lengths. And maybe we don’t even have the disqualification (DQ) controversy in the 1980 Preakness, where Codex beat Genuine Risk by 4 and ½ lengths.

We also need to deal with couplings and uncouplings. Traditionally in racing, horses with the same trainers and/or the same owners were coupled in the wagering. Traditionally, if one part of the entry was DQ’d due to a foul, the entire entry was DQ’d. This got changed over the decades so that the innocent part of the entry was only DQ’d if the incident affected the finish of the innocent entry mate. You also kept entries out of exotic races. Gradually over the years, with the need to fill races and the need to expand wagering opportunities, the coupling rules were weakened extensively.

It’s worth going back and reviewing what used to be the fan and commentator history on uncouplings. It once was incredibly unpopular; we had fans protesting and rioting about mistakes on couplings. In 1976, the New York Racing Board allowed it in thoroughbred racing for horses with the same trainer. It proved so unpopular that it was repealed four years later. As late as 1999, Andy Beyer could say that the “practice has generated immense suspicion and hostility.” Nonetheless, the pendulum has shifted and uncouplings are basically accepted.

But they’re coming under increased scrutiny largely as a result of the running of the million dollar Sword Dancer Handicap at Saratoga about three months ago.

That race was won by the overwhelming favorite, Flintshire, trained by Chad Brown. Flintshire’s uncoupled entry mate, Inordinate, ridden by Aaron Gryder, also trained by Chad Brown, moved off the rail in the stretch to make way for Flintshire. The stewards disallowed the foul claim made by the trainer of the horse to the outside of Inordinate. The fan reaction against the free passage of Flintshire has forced an overall review of the issue.

And there really are major reasons to review these rules. First of all, here in Tucson, we have the traditional Stan Bergstein ecumenicalism and parity issues. The coupling rules are far different for harness racing than for thoroughbred racing. There’s no reason for that.

The rules on what horses can be uncoupled differ from jurisdiction to jurisdiction, and the rules on whether to disqualify the innocent party of the entry differ.

In New York, you only disqualify the innocent party if due to the foul, another horse was prevented from finishing ahead of the innocent entry mate. Under the model rules, it’s discretionary with the stewards. Some states disqualify the innocent party, where the innocent party was unduly benefitted. My personal favorite might be New Jersey, where the thoroughbred rule largely follows the discretionary model rule and the harness rule provides for the DQ of the innocent entry mate, where the foul may have affected the finish of the race.

You also have issues over whether you can take action against an uncoupled entry due to a foul by the uncoupled mate. In New York, under the literal rule, you could only take such action if the horses have the same trainer, but not where they have the same owner but a different trainer.

The UK has an interesting way of dealing with the entry issue. A maneuver in the interests of a horse under common control is considered a violation. It does not include pure pacemaking, and the jockey is responsible – and potentially the common trainer ‒ for the assistance violation.

It’s not too dissimilar from what happened in the 2006 Hambletonian. Trainer-driver Trond Smedshammer, on the tiring leader, pulled his horse off the rail in the stretch to make room for one of his uncoupled trainees. He received a 30-day suspension for helping. In 1969, driver Yves Filion opened up the rail for his brother Herve with a coupled entry. He got 15 days. And about 74 years ago, the incredibly talented rider Don Meade got a 19-month penalty for signaling to the rider of his entry mate to take care of one of the competitors. In short, we need a uniform rule on this topic and we need to consider applying the UK improper help rule to these entries when there is no actual interference.

Finally, we need to end racing commission review of steward judgment calls. It still happens in some states, and there’s no reason for it. All other sports have rejected the secondary review of judgment calls made by game officials. The Court of Arbitration for Sport has consistently rejected review of “field of play” decisions. Besides the need for finality, the fact is that the technologic innovations have tried to make sure that the decisions are made at the most knowledgeable level. Let’s face it, the volunteers who serve as racing commissioners are not at the most knowledgeable racing level. They should not be reviewing steward judgment calls.

There are a few categories of calls that can be addressed through administrative appeal.

Obviously, bad faith decisions. You can’t uphold decisions made by the 2002 Olympic figure skating judges who agreed to vote jointly for their home country skaters. You can’t uphold decisions by crooked NBA ref Tim Donaghy, and you can’t uphold the early 1980’s Great Barrington Fair stewards’ decision, where the stewards took down the first two finishers to put up an exacta they had wagered on.

You can’t uphold obvious mistakes of fact, where the wrong horse was ID’d. Most obviously, in 1986, when the Saratoga stewards took down the horse Allumeuse in a race where he was not involved in the incident.

You also can’t uphold decisions made based on a mistake of law. If the rule says “you can’t run inside the pylons,” and the judges don’t take down the horse because they saw that the horse received no advantage from running inside the pylons, that’s a mistake of law that needs to be addressed.

That really isn’t too different than the George Brett pine tar decision. The penalty for excess pine tar was that you tossed out the bat. You did not declare the batter out. It also was the last play of the game. So no field of play decisions were affected. It was the equivalent of DQ’ing a horse because it was late to the paddock or ran in the wrong silks.

So what does racing do to utilize new technology? The problem is that racing stewards make judgment calls. These are not the kind of decisions that replay officials make in other sports. They make objective fact calls. What would they rule on: running inside the pylons, leaving the course in a steeplechase?

Moreover, until racing has actual uniform rules on what constitutes a foul, you can’t have officials in a bunker in Lexington or Columbus or in a highrise in Manhattan making DQ decisions. And even if you did have a uniform rule of the race, you would have to get individual racing commissions to cede jurisdiction to a central body. If the past is any prologue, that is not about to happen.

So how does racing use technology as we go forward? In the non-steward field, inevitably down the road, we are going to see technology, rather than humans, review the finish line camera results and other portions of the running of the race. There is a strong likelihood that individual racetracks and/or state budget offices will work on racing commissions to limit the number or put an end to the use of patrol judges and placing judges.

Eventually, we will get to automated timing and microchip identification of horses that are engaged in workouts, and we will be seeing a shakeout in how and where racing will employ the use of clockers.

These are depressing results for many of us who like heavy doses of tradition in horse racing. But it’s likely to happen. This hotel, as we speak, is holding a luncheon for the Arizona production of “Fiddler on the Roof.” Horse racing is much like Anatevka, because without our traditions, we would be as shaky as a fiddler on the roof.

Moving on to stewardship, if we are serious about judging fouls on the basis of how they affected the finish, we will need technology that accurately measures the speed of horses throughout the race. Did a bump or a jostle actually affect the speed of the horse? How many lengths were actually lost when a horse was forced to check? How much distance was lost as a result of a horse being forced wide? Can we develop algorithms that would legitimately estimate how a horse would likely have finished if it was not fouled or impeded? If we want stewards to make informed calls on whether an incident affected the result, we need to provide stewards with the most information possible. We will need a Trakus 2.0 or maybe even a Trakus 3.0 to do this.

Perhaps we need to let stewards consult with designated replay review officials in the bunker during the inquiry. This is not too dissimilar to the NFL review. In the NFL, game officials make the call with the help of review officials. Wouldn’t you want the stewards to be able to talk to a Mike Pereira-type when they reviewed the race? This could work to provide expertise and limit steward inconsistencies. I’ve always thought that it would be nice to have a devil’s advocate present in the stewards’ stand, and this video replay assistant could deliver that outside voice.

Perhaps a subsequent day review would be the best way to use replay officials in racing. This could work similarly to the NHL review session, but without the power given to the NHL replay officials. The day after the game, the NHL replay officials gather in Toronto to review the issues that came up in the prior games. They review hits and checks to see if they merit suspensions. They generally determine whether incidents merit greater punishment and whether in-game calls were correct. Thus, they serve as a way to review the overall work of the game officials and to provide a more detailed and accurate view of what actually took place in the game.

In racing, they could review the basically objective incidents that could not be called on-track due to time limitations. Now this should involve whip violations, how often was the horse struck, how high was the hand, where was the horse struck, at what point in the race was the whip used, and did the whip strike another horse or another rider. They also could review the objective elements in a harness race, including running inside the pylons, staying in lane during the stretch, and resolving lapped on breaks at the finish line. You might even use the subsequent day review to look for foreign objects on tracks.

On a more subjective level, you could review the tapes of riding incidents to help determine issues of the severity of jockey or driver misconduct. If it’s truly dangerous riding, the replay officials can suggest increases in the penalties for jockeys or drivers.

They can review tapes to see if the rider or driver ran the horse on its merits. They would have time to review tapes to see review form reversals and to check on races with suspect payouts. I’m not proposing that the review officials have independent authority, but they ought to be able to make recommendations to the proper authorities.

This could potentially work to improve stewarding decisions and decrease inconsistency without affecting the sovereignty of racing commissions and racing stewards.

So in conclusion, let me reiterate what I’ve said this afternoon. Horse racing was the early leader in technology. It is still basically the one professional sport where the in-game officials use replays to make subjective decisions.

To make stewarding consistent, we need uniform rules of the race, uniform rules in couplings, and we need to keep racing commissions out of in-game decisions.

Because replay officials generally make only objective calls, racing would get less benefit from replay officials than other sports get.

Racing can be helped by better technology in making the decision of whether a foul affected the result of the race. Let’s hope we can afford the technology.

There should be times when stewards could consult replay officials during the race review to obtain additional expertise and to get a different perspective on the running of the race.

We definitely ought to be able to have expert replay officials review tapes of the race in the days after the race to help make decisions on objective issues that could not have been called due to time restraints on the game officials and to provide subjective input on the severity of any misconduct that occurred in a race.

Most importantly, we can improve stewarding through technology, but we need to put our own house in order first.

Thank you for letting me speak to you this afternoon.

 

Posted in Uncategorized | Leave a comment

New York State Racing History in PowerPoint

by Bennett Liebman
Interim Director and Government Lawyer in Residence
Government Law Center, Albany Law School

The link below will take you to a PowerPoint presentation on the history of racing in New York State.

Click here for PowerPoint presentation.

Posted in Uncategorized | Leave a comment

The Racetrack that Albany Law School Built

by Bennett Liebman
Interim Director and Government Lawyer in Residence
Government Law Center, Albany Law School

It has been 75 years since Saratoga Raceway[1] (now Saratoga Casino Hotel) opened for business in 1941 as a harness track. Many things – most especially the allure of harness racing – have come and gone. Yet, there has been one constant at the raceway. Albany Law School grads have always been in the top management of the raceway.

It started in 1941 with Frank Wiswall, Albany Law School class of 1916. Wiswall, who had been with the United States Trotting Association, “collaborated with architects and engineers in planning the construction”[2] of the track. He “drew the charter and performed all other legal work in organization of the corporation.“[3] Starting in 1945, Wiswall became the president of the track and served in that capacity until 1963. After leaving the presidency, Wiswall served as the chairman of the board of Saratoga Raceway until his death in 1972.[4] He was elected to the Harness Racing Hall of Fame in 1973.

At Albany Law School, Wiswall served as a member of the Albany Law School board of trustees for 45 years from 1922-1967. For many of those years, Wiswall was the senior member of the school’s board of trustees.[5]

Wiswall was succeeded as president of the Raceway by Ernest Morris. Morris, who was an attorney in Albany, has been on the board of the raceway for many years. Before he was elevated to the presidency of the track, Morris also served as the vice president and secretary of the raceway. Morris was a graduate of Albany Law School’s class of 1931. He served as the president of Saratoga Harness from 1963 through 1978 and subsequently served as the chairman of the board of the track. He also is a member of the Harness Racing Hall of Fame, having been elected in 1987. He died at age 83 in 1991.

At Albany Law School, Morris was on the board of trustees for 40 years from 1944-1984 and served as the president of the school’s board of trustees from 1965-1970. He received an honorary L.L.D. from the school in 1961.

Ernest’s son David became the attorney for the harness track in 1967. In 1973, he was elevated to the positions of executive vice president and director of the track.[6] In 1978, he became the track’s president.[7]

David Morris graduated from Albany Law School in 1961. He basically succeeded his father, Ernest, on the Albany Law School board and served on the school’s board of trustees from 1984-1998.

In 1987, David Morris sold Saratoga Harness to a group of investors from the Capital District for $8.65 million.[8] Four of the investors – Frank Fitzgerald, Dennis Kayo, Frank Fernandez and Joe Gerrity ‒ were the principal owners who held all the voting stock in the corporation. Of these four, Fernandez was a 1980 Albany Law School graduate with a legal practice in Albany. Fernandez initially became the secretary-treasurer of the track. He frequently served as the counsel to the racetrack.

In 2001, Fernandez left the Capital District to become the counsel at Home Depot in Atlanta. At that time, he resigned from his corporate positions at the track.[9] In 2003, he sold his stock in the track for $1.68 million.[10]

Fernandez served as a member of the Albany Law School board of trustees from 2010-2015. Mr. Fernandez received the Distinguished Alumni Award at Albany Law School in 2005 and also was the Alumni in Residence in 2004.

One of the holders of the Saratoga non-voting stock after the 1987 sale was Albany lawyer and lobbyist James D. Featherstonhaugh. Besides serving the track as both a lawyer and lobbyist, Featherstonhaugh acquired shares of the voting stock in the facility after the death of Frank Fitzgerald in 2001. Since the sale of the Fernandez interest in the facility, he has been one of the two individuals who own the voting stock in the track. Featherstonhaugh now has 25% of the voting stock while Daniel Gerrity – the son of Joe Gerrity who was one of the 1987 purchasers of the track ‒ owns 75%.[11] While the New York Times has written that Featherstonhaugh “owns a racetrack and slot parlor in Saratoga Springs,”[12] he actually serves as the track’s minority owner, secretary, chief legal officer and a member of the board of directors.[13]

Featherstonhaugh is the only one of the Albany Law graduate/Saratoga Raceway owners who has not served on the Albany Law School board of trustees. While Featherstonhaugh might be a charter member of any Albany lobbyist hall of fame,[14] he is also not a likely candidate to be in the Harness Racing Hall of Fame like Ernest Morris or Frank Wiswall.

It would be difficult to find any racetrack that has held so close a relationship over so long a period of time with one law school. Perhaps it is time to call Saratoga Raceway the official racetrack of Albany Law School or call Albany Law School the official law school of Saratoga Raceway. It might be time for the track to show off its Albany Law School roots by offering betting rebates, reduced food prices, and/or added free play for tuition-beleaguered Albany Law students, for Saratoga Raceway is the track that Albany Law School built.

 

[1] The facility has at various times been known as Saratoga Raceway, Saratoga Harness, Saratoga Equine Sports Center, Saratoga Gaming and Raceway, Saratoga Casino and Raceway and now the Saratoga Casino Hotel. See generally Dennis Yusko, “75 Years for the Harness Track,” Albany Times-Union, March 5, 2016.

[2] “Morris Named Saratoga Raceway Prexy,” Albany Times-Union, March 1, 1963.

[3] Id.

[4] “Frank Wiswall, Racing Official, 77,” Boston Globe, October 25, 1972.

[5] “Morris Named Saratoga Raceway Prexy, supra note 2.

[6] “David Morris Named to Saratoga Harness Post,” Amsterdam Recorder, November 29, 1973.

[7] “Son Replaces Father,” New York Times, July 21, 1978.

[8] New Owners Take Over Saratoga Harness Track,” Associated Press, April 2, 1987.

[9] Danielle T. Furfaro, “Albany, N.Y.-Area Attorney Named to Executive Post of Home Depot,” Albany Times-Union, February 28, 2001.

[10] Kenneth C. Crowe II, “Father, Son Team Take Over Raceway,” Albany Times-Union, June 20, 2003.

[11] Jordan Carleo-Evangelist and Dennis Yusko, “Highest of Stakes,” Albany Times-Union, June 23, 2014.

[12] Charles Bagli, “Caesars Joining Contest for State Casino License,” New York Times, April 23, 2014.

[13] See Jonathan Lintner, “Churchill Part of N.Y. Casino Bid,” Louisville Courier-Journal, May 14, 2014.

[14] See Wayne Barrett, “The Heavyweight Albany Lobbyist They Call ‘Feathers.ʼ” Village Voice, November 12, 2010. The Daily News called Featherstonhaugh a “legendary powerhouse.” Brian Kates, “A Limitless Line of Lobbyists Still Pulling Strings,” New York Daily News, March 30, 2009.

Posted in Uncategorized | Leave a comment

NYRA Enters the World of Chelm

By Bennett Liebman[1]
Government Lawyer in Residence
Albany Law School

In Yiddish folklore, there exists the mythical village of Chelm.[2] Chelm is “inhabited by befuddled, stupid, foolish, but endearing people.”[3] “It has become the archetypical home of simpletons, an incubator of amiable fools.”[4] The saga of the reprivatization of the New York Racing Association (NYRA) is looking more like a story that should have been set in Chelm.

The Summary of the Status of the NYRA Reorganization Board

NYRA has held the franchise to operate the principal thoroughbred racetracks in New York State since 1955.[5]  Originally designed to be a one of a kind non-profit racing association,[6] NYRA’s fortunes over the past 60 years have fluctuated significantly. Due to the declining popularity of thoroughbred racing, its financial situation has been dependent on the extent of State legislative support for NYRA.

In November of 2006, NYRA filed for bankruptcy, a year before its franchise was to expire. In 2008, the Legislature renewed NYRA’s franchise for a 25-year period. NYRA formally became a not-for-profit corporation.[7] While a not-for-profit corporation under the 2008 law, 11 of NYRA’s 25 trustees were appointed by public officials.[8]

In 2012, after a report issued by the State Racing and Wagering Board heavily criticized NYRA management for its involvement in mistakenly charging bettors an excessive unauthorized takeout, the Legislature and the Governor changed the composition of the NYRA board. They turned the former board into a publically controlled “Reorganization Board.” Of the 17 members of the Reorganization Board, 12 were appointed by public officials. Eight were appointed by the Governor, including the chairman of the new Board. The Reorganization Board was initially designed to exist for three years as measured from the date that the Racing and Wagering Board notified the Legislative Bill Drafting Commission of the “appointment of a majority of public directors of the temporary reorganization board.”[9]

The legislative findings of the 2012 reorganization board act state, “In no later than three years, the state racing franchise shall be returned to private control, remaining in the form of a not-for-profit corporation.” Yet, there was no formal mechanism to replace the Reorganization Board. Instead, the Reorganization Board was to “propose, no less than one hundred eighty days prior to its termination, recommendations to the governor and the state legislature representing a statutory plan for the prospective not-for profit governing structure of The New York Racing Association, Inc.”[10] In short, there was no agreement about how the NYRA board would be reconstituted after the end of public control.[11] Before any recommendation from NYRA on its future had been made, however, the State’s budget legislation in 2015 extended the life of the Reorganization Board another year until the fall of 2016.

On April 12, 2016, the NYRA Reorganization Board met to submit its recommendations for reprivatization. The Reorganization Board supported two plans. These plans both involved a 15-member Board. One had no members appointed by government officials. The other had limited public representation, with 11 of the members being selected by the executive committee of the Reorganization Board and four by government officials. The preference of the Reorganization Board was for the plan with the four public appointees.[12] The Reorganization Board proposal did not meet with the approval of the Governor’s office which wanted additional public representation, the continued application of the State’s sunshine laws to NYRA,[13] and a ceiling on the video lottery funds that would go to NYRA from the Resorts World racino at Aqueduct. The Governor’s objections were, in turn, objected to by the so-called Concerned Citizens for Saratoga Racing, a group largely composed of Chamber of Commerce representatives from the Saratoga Springs area. The Legislature proposed and then passed a modified version of the NYRA Reorganization Board’s privatization bill only to be confronted by the fact that the Governor’s office would be likely to veto the bill. A veto would put the existence of New York thoroughbred racing in jeopardy. A decision could be made under which there would be no organization to operate the franchise in the fall of 2017, or the racing franchise would operate under the auspices of the racing franchise oversight board.[14] Faced with this prospect, the Legislature, two days after it voted for NYRA reprivatization, passed a bill continuing the Reorganization Board for another year. That legislation was quickly signed by the Governor, and the Reorganization Board is now scheduled to continue into existence until the fall of 2017.

The Work of the Reorganization Board Since 2013

NYRA operated basically under interim management until June of 2013. At that time, the reorganization board appointed former Toys “R” Us and Universal Parks & Resorts executive Christopher Kay as its president and chief executive officer. Since Kay’s ascension to the presidency, there have been almost no Board dissents or disagreements and almost no public controversies arising out of the Reorganization Board’s activities. NYRA’s financial conditions have improved markedly under Kay’s reign, which is partially attributable to the fact that NYRA receives 7% of the net win from the video lottery facility at Resorts World run by Genting at Aqueduct.[15] In calendar year 2014, that amounted to an excess of $56.5 million to NYRA.[16] In calendar year 2015, the VLT contributions to NYRA increased to $58.2 million.[17] President Kay has also increased prices at the tracks, and charged NYRA’s simulcast customers higher rates. Efforts have been ongoing to develop a nationwide online wagering system. Equine safety has improved at the NYRA tracks, as evidenced by reduced rates of breakdowns or on-track deaths.[18]

The general understanding is that the quality of racing at the NYRA tracks has not increased over the past several years, despite the increases in purses generated by Genting’s VLT’s.[19] Additionally, live attendance has clearly lagged, despite the presence of Triple Crown winner American Pharoah in 2015 and near Triple Crown winner California Chrome in 2014. NYRA no longer announces live attendance on most days, and many significant questions have arisen over the accuracy of the attendance figures announced by NYRA at the Saratoga meet.[20] Many believe that current NYRA officials have limited knowledge of the nature and significance of horse racing.[21] There also are indications that the goal of transparency that was supposed to be fostered by making NYRA a publically accountable organization has not been met.[22]

The Reprivatization Plans of the Reorganization Board

Before the Reorganization Board’s April 12, 2016 meeting, there had already been a series of statements and leaks for a period of 15 months about what the Reorganization Board was likely to recommend.[23] NYRA President Christopher Kay said at the March 10, 2016, meeting of the Reorganization Board that “the plan will be largely unchanged from the one the association expected to submit a year ago.”[24]

Those initial plans from 2014 -2015 included:

  1. A smaller future Board, possibly 13 members down from the current 17 members.
  2. A large majority – if not all ‒ of the members of the Board to be selected privately, leaving none or a minimal number of members appointed by State government officers.
  3. Not-for-profit status.
  4. NYRA would no longer be subject to the State’s sunshine laws: the Open Meetings Law and the Freedom of Information Law.
  5. The CEO of NYRA would serve as a full voting member of the Board.
  6. The horsemen at the NYRA tracks and the State breeders would each continue to appoint an ex officio non-voting member. Under the 2008 legislation, these groups had appointed full voting members. Under the Reorganization Board, these groups each appointed an ex officio non-voting member.
  7. The new private-sector Board members would be appointed by the current Reorganization Board.
  8. There would be term limits for the members of the future NYRA Board. Each initial member of the future NYRA Board could serve one additional term. The term would be somewhere from two to four years.
  9. NYRA would set its own racing dates.
  10. Nothing would prevent the current Reorganization Board members from serving on the future privatized board.

In an uncritical manner, the Reorganization Board considered privatization plans at its April 12 meeting. The Board was presented with three scenarios. The first two privatization plans differed only as to the issue of publically appointed members. Plan 1 had 15 members, all privately appointed.

Plan 2 had 15 members of whom 11 would be privately appointed. Four would be appointed by government leaders, one each by the leaders of the State Assembly and Senate and two by the Governor. The Governor would also appoint the first chair of NYRA.

In all other respects, Plans 1 and 2 were identical. The CEO of NYRA would be a voting member. The current Reorganization Board would select the non-governmental Board members. The members would serve three-year terms, which would be renewable twice. The horsemen and the breeders would each appoint a non-voting ex officio member. Nothing would prevent current Reorganization Board members from serving on the future privatized Board.

Thus, in large measure, the NYRA privatization plans of April 12, 2016 were similar to the proposal that had been previously floated. The numbers of the members of the Board increased from the previously revealed plan from 13 to 15. The number of renewal terms available for existing members was increased from two to three so that some members might be able to serve up to an additional nine years on the Board. These two plans were unanimously approved by the Reorganization Board with a preference stated by a number of the members for Plan 2 with its minority of governmentally appointed members. Reorganization Board members Leonard Riggio, Earle Mack and C. Steven Duncker all voiced support for the publically appointed members.

The Reorganization Board also considered a third plan under which the current Reorganization Board would continue under public control for another year. This proposal was clearly opposed and dismissed by all the members of the Reorganization Board that discussed this issue. In a somewhat unartful manner, Acting NYRA Chairman Michael Del Giudice claimed he was asked to include the third plan for the Reorganization Board’s consideration. Board member Leonard Riggio added, assumedly referring to the Governor’s Office, “They asked us to include this.”[26]

Given the fact that the Reorganization Board has largely acquiesced in the management initiatives of the Christopher Kay administration, it seems like the Reorganization Board has advocated for what is basically a Christopher Kay 2.0 administration with fewer governmental constraints.

Why the Reorganization Board Resides in Chelm

This puts the Reorganization Board in an anomalous position. At full strength, more than two-thirds of its 17 members are public appointees. It would seem that most of the Reorganization Board’s members anticipate continuing on as members of a privatized NYRA. They are basing their claims to continuance as members of a not-for-profit organization on the strength of the Reorganization Board’s record as a government agency in restoring NYRA to profitability and in its record in improving the safety of race horses.[27] Yet, they are rejecting their own record.

The incongruity of this behavior can be described as follows. On one side, they are government-appointed members of a government agency. The basic claim for their continuance as members of the future NYRA is the assumed good record they claim to have made as members of a government agency. Yet, on the other side, they claim that functioning as a government agency is hampering their ability to run a racetrack. If the members are so antagonistic to the nature of a government agency serving as a racetrack proprietor, why are they serving as members of this government organization? What were the goals and objectives the members of the Reorganization Board wanted to achieve in 2016 (or even in the years from 2012-2015) that they were unable to achieve because of the Reorganization Board’s status as a public agency? What were they prevented from doing? If they have such a good record as a public agency, why should they be going private? How could it be said that the Executive Chamber controlled the votes of its appointees on NYRA policy when there were absolutely zero votes on the Reorganization Board for a proposal that likely originated from the Governor’s office?[28]

The one substantive argument given for the end of the Reorganization Board’s governmental status is that the Reorganization Board, because of its temporary status, is currently incapable of doing long-time planning. Yet, the Reorganization Board was the first incarnation of any NYRA Board to even have a Long Term Planning Committee. The Reorganization Board has submitted plans for the major redevelopment of Saratoga, which is clearly the biggest long-term planned project at the NYRA tracks since Belmont Park was reconstructed in the mid-1960’s. It has also planned for an improved account wagering system and even the possibility of a synthetic track surface at Aqueduct.[29] The Reorganization Board has done as much, if not more, long-term planning as any previous NYRA Board. The fact that there are no long-term plans for Belmont Park and Aqueduct are not due to the temporary nature of the Board. The problems these facilities face are so daunting and are subject to so much outside political and financial whims and pressures that nobody has any idea what should be done at these facilities.

Moreover, NYRA’s original November 2014 plan for a reprivatized NYRA suggested a suspension of the Long Term Planning Committee, and even the current plan only suggests the creation of an ad hoc Long Term Planning Committee. There is no indication that the current Reorganization Board cannot do long-term planning or any indication that a future NYRA Board will do any long-term planning. This is a red herring, or perhaps in this instance, an equine wild goose chase.

Moreover, at its meeting, the Reorganization Board recommended that it go private. Yet, there was no discussion or documentation whatsoever as to the ramifications of what would happen if and when the organization went private.

Would records of NYRA be subject to FOIL? If NYRA were no longer subject to FOIL, what would public access be to those records created before the time that NYRA went private? Would NYRA be subject to the Open Meetings Law? If NYRA were truly private, would it be possible constitutionally for the State Comptroller to audit NYRA?[30] To what extent would NYRA be under the regulatory control of the State Gaming Commission and the Franchise Oversight Board? Why is there any need or reason to make the NYRA CEO a statutory member of the Board? Should there be any regional representation from those areas where the NYRA tracks are located? Why should the current Reorganization Board appoint its successor Board? If you are making the NYRA Board truly private, why would you have the Governor appoint the first chairman of NYRA? Would NYRA still need to appoint an integrity counsel? What competitive bidding standards would NYRA be required to follow?

One would have thought that these matters would have been publically discussed and included in any report covering NYRA privatization. Yet, there appears to be no report whatsoever to support or explain the recommendations. These are just two barebones recommendations made by the Reorganization Board to the Governor and the Legislature. One would think that the consequences of a NYRA reprivatization bill would have been more carefully thought out and articulated. It merited careful consideration rather than summary approval.

The Gubernatorial Response to NYRA Reprivatization

Many people could have viewed the NYRA reprivatization proposal as a gift to the Governor. The State would get to declare victory and leave the field of thoroughbred racing. Based on the accomplishments of the Reorganization Board, NYRA now is profitable financially and the horses that race at the NYRA tracks are now safer. It would be an appropriate time for NYRA to return to a private status. Since the current status of horse racing in New York State is at a historical low position as measured by handle,[31] the State would also get to leave a failing industry.

Moreover, if the Governor wished to assert control over NYRA, Plan 2 effectively allowed him to do so. The Governor would have two appointees, and could name the first chairman of NYRA. Ten of the remaining members would be selected by the executive committee and the current members of the Reorganization Board. The Governor could, if so inclined, largely control the future members of the privatized NYRA through his authority to name eight appointees to the Reorganization Board.

Thus, the Governor could declare victory by authorizing a reprivatized NYRA while at the same time maintaining possible influence over the naming of the members of the future NYRA Board. The Reorganization Board had handed him a winning ticket.This was veritably a gift horse to the Governor.

Apparently, the Governor’s office did not see it in that manner. They looked the gift horse in the mouth.

Instead, the Governor’s office viewed the Reorganization Board’s proposal as an opening gambit in an ongoing contractual negotiation. Instead, the Governor’s office counteroffered.

The counteroffer from the Governor’s office apparently included the following elements:[32]

  1. The Governor would select four of the 15 voting NYRA Board members, including the first chair. Legislative leaders would pick one member each.
  2. The Freedom of Information Law and the Open Meetings Law would still apply to
  3. Video lottery moneys to NYRA would be capped and would return to what had been anticipated in 2008 by NYRA and the State. The difference between current NYRA VLT revenues and the cap would be diverted from NYRA and added to the State’s overall education budget. The original estimate of VLT revenues to NYRA had been $46 million per year. NYRA would lose upwards of $12 million per year.
  4. $16 million of the moneys would have to be spent on improvements at Saratoga. Clearly this was a move to assuage the Saratoga community. If NYRA was to receive $46 million from VLT’s, $26.2 million would be allocated to capital improvements. If Saratoga received $16 million, that track would be receiving more than 60% of the capital improvement moneys.
  5. If NYRA’s financials objectively show the corporation headed to bankruptcy, then the State would assume greater financial management of NYRA.

If the Governor’s office was expecting any public support for its proposals, it did not receive any. The program bill was not even introduced in the current legislative year.

Why the Governor’s Office Resides in Chelm

Parts of the Governor’s proposal seem reasonable. Some form of financial governance constraints on NYRA are likely necessary. The State surely has an interest in NYRA avoiding insolvency and bankruptcy. The State in the first decade of the 21st century did provide significant financial support to keep NYRA in business. It would make total sense for the State to want to repeat this scenario.

Similarly, assuring that government sunshine laws apply to NYRA is also a worthwhile goal. Nonetheless, the fact is that NYRA has largely been avoiding these laws now. NYRA committee meetings have not been open. Little public business has been transacted at the Reorganization Board meetings. Almost nobody in government has tried to open these unauthorized meetings, and this includes the representatives of the Governor on the Reorganization Board. Transparent NYRA governance is a legitimate goal but one that has been infrequently pursued.

The major concern is in the video lottery moneys. In theory, one can argue legitimately that too much video lottery moneys flow to racing and not to education. Yet, applying this to NYRA would be the worst place to test out this theory. The fact is that the franchise agreements between NYRA and the State guarantee NYRA 7% of VLT moneys at Aqueduct, 4% for capital improvements and 3% for expenses. These funds are the only VLT funds to racing that are contractually obligated. Why would this be your first line of attack?

Additionally, the 2016 State budget provided for a floor on payments from Aqueduct VLT’s to NYRA. It stated that absent a plan for sufficient alternative revenues for the forthcoming not-for-profit NYRA, any agreement on VLT’s at Aqueduct “shall require the operator of video lottery gaming at Aqueduct racetrack to maintain racing support for general thoroughbred racing operations and capital expenditures from video lottery gaming at Aqueduct racetrack, at the same  level realized in two thousand thirteen, to be adjusted by the consumer price index for all urban consumers, as published annually by the United States department of labor, bureau of  labor statistics.”[33] NYRA received $54.96 million form VLT’s in 2013.[34] The State four months ago passed legislation establishing a $54.96 floor on payments to NYRA from VLT’s. How can it come in and try to change it to a $46 million ceiling?

Moreover, in 2016 the State in two instances lowered the percentage of moneys it received from VLT’s. The 2016 budget lowered the State tax on revenues from Resorts World by allowing Resorts World to have a vendor’s capital award.[35] The 2016 budget similarly lowered the tax rate on VLT’s at Finger Lakes Racetrack.[36] Why is the State lowering taxes on some VLT operators while significantly reducing NYRA’s income from VLT’s?

The most recent Comptroller’s office report shows that, at least for the time being, the VLT revenues are needed to keep NYRA operating in the black. Since the main accomplishment of the 2012 NYRA legislation is the profitability of NYRA, why would you advocate for a position that would end your basic accomplishment?

Even if there is merit in reducing NYRA’s video lottery payments, wouldn’t you expect the Governor’s office to be more strategic about its work here? A $12 million addition to the overall State education budget is less than a drop in the budget.[37] But if you directed these moneys to the school districts in Saratoga Springs or in Elmont, where the NYRA tracks without VLT’s are located, you might have a proposal with decent local political support.

As to the Governor’s need to appoint four rather than two Board members, the general response should be “Why?” The Governor’s appointees to the Reorganization Board have voted lock, stock, and barrel with the other members of the Reorganization Board for 3 ½ years. The Governor’s representatives in April 2016 all voted unanimously for the NYRA proposal which would limit the Governor to either zero or two appointees, even knowing that the Governor’s office wanted them to vote on the continuation of the Reorganization Board. The Governor’s current appointees would likely, in large measure, be able to continue on the NYRA Board, under NYRA’s plan. The Governor gains nothing from this proposal, which only insures that the Governor’s office will share the blame for any future failings of NYRA. The notion of demanding four gubernatorial appointments on the NYRA Board is somewhat pointless.

The Saratoga Concerned Citizens Response to NYRA Reprivatization

While the NYRA Reorganization Board seemed to be negotiating in May of 2016 with the Governor’s office over NYRA privatization, a group in Saratoga Springs calling itself the Concerned Citizens for Saratoga Racing began advocating for reprivatization. This was a self-appointed group largely composed of individuals associated with the Saratoga Chamber of Commerce. The group had appeared previously in 2006, where it advocated during the fight over the racing franchise in support of maintaining Saratoga’s historic traditions.[38] It advocated for local zoning control of Saratoga’s racing facilities and maintaining the dates that the Oklahoma training track at Saratoga would be open for spring and fall training.[39] The Concerned Citizens eventually advocated for NYRA to receive the racing franchise.[40] The current version of Concerned Citizens is chaired by Maureen Lewi whose public relations firm represented NYRA for several decades.[41]

In mid-May, the Concerned Citizens began to go live with their advocacy of the NYRA Reorganization Board proposal. Maureen Lewi said, “It’s really just the governor now that’s standing in the way.”[42] While stating “We’re seeing a renaissance of racing in Saratoga and New York State,”[43] the Concerned Citizens rejected the Governor’s plan, claiming that additional gubernatorial appointees threatened reprivatization, and complained about the Governor’s appointment of the chairman of the NYRA Board. They also were critical of the diversion of the VLT funds to education and the powers given to the State in view of future potential NYRA financial difficulties.[44] Finally, the Concerned Citizens complained that that the VLT payments were part of the State’s payments to NYRA for the land in 2008 and that the move to private control was necessary in order for NYRA to do long-term planning.[45]

Subsequently, Concerned Citizens board member John Hendrickson resigned from his position as the special advisor to the Governor for Saratoga, and the Concerned Citizens has continued its advocacy of reprivatization with a “Whoa Cuomo” campaign.”[46]

Why the Concerned Citizens Reside in Chelm

If the proposals of the Governor are subject to befuddlement, so are the proposals of the Concerned Citizens of Saratoga Racing.

First of all, this critique is severely undermined by the notion of “a renaissance of racing in Saratoga and New York State.”[47] If that is the case, this renaissance clearly has some relation to the work of the Reorganization Board. Why is there an immediate need to rid horse racing of a Board that has presided over New York racing during its renaissance? If there is a renaissance, why wouldn’t we just continue the Reorganization Board? The short fact is that the Concerned Citizens make no case that the Reorganization Board has in any way harmed Saratoga or New York racing or that NYRA would operate any differently under the Reorganization Board’s reprivatization program.

If the basis for ending the Reorganization Board is the need for long-term planning, this argument avoids reality. As stated previously, the Reorganization Board has actually done more long-term planning than its predecessors. The Reorganization Board, unlike its predecessors, has a long-term planning committee. If the issue was the uncertainty of the time that the Reorganization Board was to remain in power, then perhaps the easier solution might have been to make the Reorganization Board permanent.

As to the specific criticisms of the Concerned Citizens, the fact is that the Governor’s power to appoint the first chairman of NYRA was a proposal that emanated from the NYRA Reorganization Board and not from the Governor’s office.

The fact that public officials would appoint 6 of the 15 Board members is hardly the end of the world. Under the 2008 legislation, public officials appointed 11 of the 25 NYRA Board members. Most everyone considered this legislation as establishing a private board, even with 44% government appointees. Under the Governor’s 2016 plan, 40% of the Board members would be public members. The percentages in support of private board members are actually increased over the 2008 board that was universally considered private. Again, under NYRA’s own proposal, a determined Governor could largely dictate the members of the future privatized NYRA board.

The critique of alleged additional powers given to State agencies to manage NYRA is hampered by the lack of any complaints about the specifics of these powers and why the State might want to protect itself from having to pay for NYRA’s losses. The Concerned Citizens also fail to account for the guaranteed moneys that would go to Saratoga capital improvements under the Governor’s plan.

Finally, as to the reduction of VLT payments, the idea that these payments are owed to NYRA on account of NYRA’s ownership of the track properties is subject to extraordinary doubt. The NYRA franchise extension legislation passed in 1983 was intended to give the State ownership of the properties after 2000. The legislation extended the NYRA franchise until 2000, after which “the racetracks will become the property of the state.”[48] Even NYRA chairman Tom Bancroft stated, “It is an excellent bill… and we are delighted with it. We accept the challenge of the next 17 years and want you to know that NYRA will be competitive after the year 2000 in seeking to continue our operation of the New York tracks.”[49] Even if you believe that NYRA somehow owned the racetrack properties, there was no indication in 2008 that VLT payments were designed to be some sort of mortgage payment for the property.

NYRA is entitled to VLT payments under its settlement agreement with the State, but it might be worthwhile for NYRA to amend its agreement. The payments are only due for VLT revenue. If Genting’s Resorts World Casino at Aqueduct converts into a real casino, there are no VLT payments, and NYRA will get nothing. There are surely legitimate reasons for a new NYRA to seek to renegotiate these terms and assure itself of a definite future revenue stream.

Finally, the support of the Concerned Citizens for the Reorganization Board proposals seems misplaced in light of the activities of the Reorganization Board. In 2006-2007, the Concerned Citizens seemed focused on maintaining the historical traditions and properties of Saratoga and in maintaining the dates that the Oklahoma training track remained open in Saratoga. Last fall, the Reorganization Board reduced the dates that the training track was used.[50]

In terms of historic traditions, the Reorganization Board has already initiated the largest capital improvement plan in the track’s history involving nine years’ worth of capital improvements.[51] Additionally, “Some of NYRA’s new initiatives last year, like raising prices for virtually everything, renting picnic areas and cancelling the free open house, were evidence of a tone-deafness to local concerns.”[52] The Reorganization Board has moved forward with the type of plans that the Concerned Citizens appeared to abhor a decade ago. Yet, the Concerned Citizens support the organization advancing these initiatives.

The Legislative Response to NYRA Reprivatization

Both houses of the State Legislature introduced identical NYRA reprivatization bills.[53] The justification of the bills was simply, “The time has come for the board to transition back to private control and this legislation provides for that transition.”[54]

In large measure, these bills echo NYRA’s “four public member” proposal, with certain exceptions. These exceptions are the following:

  1. The horsemen and the State breeders’ organizations are entitled to one representative voting member on the 15-member NYRA board under certain conditions.[55]
  2. NYRA must appoint a board member from each of the counties (Saratoga, Queens, and Nassau) where NYRA tracks are located.
  3. The provision which NYRA had initially sought imposing term limits on board members is not contained in the bill.

This proposal was passed by both houses on June 15, 2016.[56] Much of the debate focused on the damage to Saratoga from the Governor’s proposal.[57] Yet, there was no talk that the Governor’s proposal – as written – would actually have increased capital funds for Saratoga.

Yet, in the face of gubernatorial opposition, the Legislature reversed itself two days later passing a bill continuing the Reorganization Board for another year.[58] That bill was quickly signed by the Governor.[59]

Why the Legislature Resides in Chelm

One would have thought that with years to prepare privatization legislation for enactment that everyone would get the basics of the legislation correct. Yet there are serious technical flaws and very questionable policy decisions in the bill as drafted.

Chief of the issues is the fact that the NYRA nominees to the privatized board are to be named by the executive committee of the Reorganization Board. Yet, on the date that the law would have taken effect, October 18, 2016, the Reorganization Board is out of existence. The bill has the appointments made by a non-existent organization.

Moreover, the provision made in the bill for the non-governmental appointments to be made to the new NYRA board, are questionable. The provision reads, “A vacancy from the members appointed from the present board of the New York racing association reorganization board, shall be filled by the remaining such members.”[60] What if there is only one such remaining member or no remaining members from the Reorganization Board? Who fills the vacancy? [61] Shouldn’t the vacancies of the non-public members be filled by a vote of all the non-publically appointed members?

There is no provision made for the length of the term of the chairman of the board. There is no provision for how to determine how to replace a chairman of the board.

Questionable policy choices abound in the legislation. The horsemen and the breeders only receive a voting member on the board “provided that a current board member of the New York racing association shall serve on the board.”[62] Is there any reason for this quid pro quo to be imposed on the horsemen and the breeders? Either these groups merit a voting member or they do not. Their status is hardly changed if a current NYRA board member is also on their boards. What if there are no officers of the breeders’ association currently on the NYRA board? What if the one NYRA member who is a member of the New York breeding association dies or resigns? Can the breeders’ association retain or hold an appointment to the board?

What became of the NYRA proposal from April establishing term limits for the current board members?

Why should NYRA select the local representatives from Saratoga, Nassau and Queens counties? Shouldn’t the local officials make these appointments?

Why are there specific three-year terms for the government-appointed members and the members of the horsemen’s and breeders’ groups? Shouldn’t these appointees serve at the pleasure of their appointing authority? What if a new governor, speaker or temporary president of the Senate is elected? What if there is a change in the leadership of the breeders’ or horsemen’s associations? Shouldn’t the incoming authorities be able to determine their appointments to the NYRA board? That is the way it has been handled under the prior incarnations of NYRA.

The legislation provides the creation at NYRA of a compensation committee, an executive committee, a racing committee, an equine safety commission, and a finance committee. If the point of a new privatized NYRA was to do long-term planning, why is there not a long-term planning committee? Given NYRA’s past financial issues, why is there no specific audit committee?[63]

Finally, what happens to the ethics provisions that had been put into place during the time of the Reorganization Board? What happens to the public availability of records created during the term of the Reorganization Board? What happens to the other ethics provisions ‒ no fund raisers – no campaign contributions from NYRA officers – no campaign contributions from NYRA itself or a NYRA-created PAC – that were put into place in 2012?[64] What happens to the ability of the State Comptroller to audit NYRA?[65]

Finding a Way Out of Chelm

It is almost too easy to dismiss this reprivatization controversy as a way to blame all the parties for total dysfunction. It is easy to view this episode as a way to place a plague on all the parties involved.

The NYRA Reorganization Board has based its claims on reprivatization on its record of accomplishments. Yet, the Board itself has done little but accede to all the initiatives of NYRA management. Its plan is simply a way of extending its existence with lessened public scrutiny. The Reorganization Board also provided no report on the reasoning behind its recommendations.

The Governor was given an outright gift by the Reorganization Board. Instead of accepting the gift, the Governor offered his own proposal. That proposal ‒ other than making sure that NYRA remains subject to the State’s sunshine laws and that NYRA does not easily relapse into insolvency – is largely pointless.

The Concerned Citizens position, complaining about the continued existence of the Reorganization Board, is illogical given its praise of the alleged “renaissance” in racing happening during the reign of the Reorganization Board and the fact that the proposed new NYRA board is likely to be a less open version of the existing Reorganization Board. Its statements about long-term planning are misplaced, as are its complaint about the power of the Governor to nominate the first NYRA board chairman. Its positions on NYRA’s past ownership claims about the land are ahistorical. It appears to support privatization for the sake of privatization, without providing any substantive criticism of the work of the Reorganization Board.

The Legislature crafted a reprivatization bill with serious technical flaws. Besides these technical flaws, there are a slew of questionable policy choices in this legislation. These flaws were compounded when the Legislature did a 180, two days after passing the reprivatization bill, and voted for the continuance of the Reorganization Board.

The one good thing about Chelm is that the controversies in that town were largely of minimal significance. The differences among the parties in the Saratoga reprivatization controversy, on paper, are not overwhelming. But the people of Chelm were amiable. The parties in the Saratoga controversy are not amiable or endearing, and that is what makes leaving the world of Chelm so difficult in the NYRA reprivatization struggle. The foolish intensity of this struggle is so great – with the parties fighting so hard over so little – that maybe they (and those of us forced to watch this) would be better off residing in Chelm than remaining in Saratoga.

 

[1] This essay uses materials previously used in earlier essays on this overall topic which include “The Future of the New York Racing Association Reorganization Board,” https://saratogainstitute.wordpress.com/2016/03/30/the-future-of-the-new-york-racing-association-reorganization-board/, “The Future of the New York Racing Association Reorganization Board: Take 2,” https://saratogainstitute.wordpress.com/2016/05/04/the-future-of-the-new-york-racing-association-reorganization-board-take-2/ and “New York State and the New York Racing Association: Can’t Anyone Privatize These Racetracks?,” https://saratogainstitute.wordpress.com/2016/06/08/new-york-state-and-the-new-york-racing-association-cant-anyone-privatize-these-racetracks/.

[2] Leo Rosten, Hooray for Yiddish, Simon & Schuster 84 (1982).

[3] Leo Rosten, The Joys of Yiddish, Pocket Books 84 (1968).

[4] Id. One of Rosten’s Chelm stories involves a rabbi who visited a prison and found that all but one of the prisoners claimed to be innocent. “So he came back, held a council of wise men, and recommended that Chelm have two prisons: one for the guilty and another for the innocent.”

[5] The three racetracks currently run by NYRA are Saratoga, Aqueduct and Belmont Park. NYRA also ran Jamaica Racetrack until that track was closed in 1959. The only other thoroughbred track in New York is Finger Lakes which is privately operated by the Delaware North Companies and is located near Canandaigua, New York, approximately 25 miles southeast of Rochester.

[6] See L. 1955, Ch’s. 812-814.

[7] See Racing, Pari-Mutuel Wagering and Breeding Law (hereinafter Racing Law) § 206.

[8] Id. L. 2008, Ch. 18, § 14.

[9] L. 2012, Ch. 457, § 8.

[10] Id. § 4. On information and belief that notification was made on approximately Monday, November 5, 2012.

[11] See generally, Liebman, The Future of the New York Racing Association Reorganization Board,” supra note 1.

[12] Minutes Of The Meeting Of The Board Of Directors Of The New York Racing Association, Inc. April 12, 2016 https://www.nyra.com/belmont/assets/4/7/2016_05_25_Board_of_Directors_Meeting_Materials.pdf.

[13] The State’s sunshine laws generally involve the Freedom of Information Law, the Personal Privacy Protection Law, and the Open Meetings Law. They encompass articles 6, 6-A and 7 of the Public Officers Law.

[14] The racing oversight board, whose members are appointed by the Governor and the legislative leaders, has the power to “conduct running races or steeplechases at racing facilities and conduct pari-mutuel betting on the outcome of the same when necessary to assure the continuation of the racing and pari-mutuel betting activities at such racing facilities (A) in the event that the racing and/or pari-mutuel betting franchises of the franchised corporation authorized by this chapter then holding such franchises have either been terminated in the manner provided by law or have been relinquished by such corporation…” Racing Law § 212.8.a.x.

[15] Even the State Comptroller, who has been generally critical of NYRA operations, has opined that “NYRA’s overall financial condition (including VLT revenue subsidies) is sound.” “Financial Condition and Selected Expenses New York Racing Association, Inc.,” June 2016, http://osc.state.ny.us/audits/allaudits/093016/15s21.pdf. The State Comptroller, however, found that “during our audit period (2012 through 2014) NYRA lost $62 million, net of the VLT subsidies.” On the other hand, the audit showed that NYRA lost $18.5 million less in its operations in 2014 than it had in 2013.

[16] Id.

[17] New York State Gaming Commission, 2015 Annual Report, https://gaming.ny.gov/pdf/Annual%20Report%202015%20Final.pdf.

[18] Stephen Williams, Horse Deaths Decline at Tracks NYRA’s Rate Remains Below National Average For Third Consecutive Year,” Daily Gazette, March 25, 2016.

[19] VLT’s have increased purses by $221.8 million at NYRA from 2012 -2015. See notes 17 and15 supra.

[20] Tom Noonan Blog, https://tenoonan.com/2015/09/04/spa-attendance-in-precipitous-fall/; https://tenoonan.com/2015/07/15/nyra-falsely-inflated-2014-saratoga-attendance-by-174000/.

[21] See Mike McAdam, “NYRA to Saratoga Fans: Time To Pony Up,” Daily Gazette, June 27, 2015. A recent example of this came in NYRA’s press release after the 2016 Preakness was won by Exaggerator. NYRA’s release stated in reference to the 2015 Belmont Stakes festival that by “attracting 100,749 fans during the three-day period, the festival was the most successful event in New York’s long-storied history of thoroughbred horse racing.” It is hard to take this remark even semi-seriously. NYRA drew 90,000 on Belmont Stakes day in 2015; so the notion of drawing 5,000 a day on two other days is hardly a mark of any exultation. NYRA drew over 120,000 alone for the “Smarty Jones” Belmont in 2004. In earlier days, drawing only 100,000 attendees, including a day of racing on Saturday, would have been a major disappointment. During 1945, the attendance at Jamaica on Wednesday, May 30, Memorial Day, through Friday, June 1, 1945 (featuring two less-than-stellar weekday cards) was 116,141. For the 1964 Belmont Stakes and its preceding Thursday and Friday cards, the attendance was 115,391.

[22] http://www.timesunion.com/local/article/Betting-attendance-numbers-elusive-5670765.php. For example, as of July 26, 2016, the minutes of its May 25, 2016 meeting had not been posted. The Public Officers Law specifies that minutes of public meetings need to be available within two weeks of the date of the meeting. Public Officers Law, § 106.3.

[23] Much of this was disclosed in a PowerPoint shown at the November 2014 meeting of the Reorganization Board. https://www.nyra.com/assets/1/7/NYRA_2014_Legal_Structure__Governance_2.pdf.

[24] Teresa Genaro, “NYRA Board Preparing Privatization Plan,” Blood-Horse, March 10, 2016. In a more critical analysis of the meeting, Daily Racing Form columnist Steven Crist wrote, “More than a year after its initial deadline to present such a plan, the board once again was silent Thursday while saying that the long-awaited plan will be presented for board approval as soon as next month. What’s in it is anyone’s guess.” Steven Crist, “Big Brother Needed for NYRA Board Meetings,” Daily Racing Form, March 10, 2016.

[25] The meeting can be viewed at https://www.nyra.com/belmont/video—april-12-2016-board-meeting/.

 

[26] Riggio serves as an appointee of Governor Cuomo. Interestingly, over the years at NYRA, many government appointees to the board ended up largely in opposition to their original appointing authorities. Thus, Stuart Subotnick and Jim Heffernan, both of whom became top NYRA officers in the early 21st century, were originally appointees of Governor Pataki. The two most outspoken pro-reprivatization board members in 2016 have been Leonard Riggio and John Hendrickson. While not on the board itself, Hendrickson served until June of 2016 as a special advisor to the Governor for Saratoga. Riggio previously served as an appointee of Governor Paterson. Hendrickson had previously served as an appointee of both Republican Senate leader Dean Skelos and Senate Democratic leader Malcolm Smith.

[27] See Stephen Williams, “Citizens Group Opposes Cuomo’s NYRA Plan,” Daily Gazette, May 15, 2016. The board called in April for reprivatizing NYRA, based on the success of the reorganization launched in 2012, following years of financial losses and management scandals.”

[28] In 2013, the Reorganization Board similarly voted against the State’s contention that the process by which NYRA had voted for an online wagering operator had been flawed. David Lombardo, “NYRA Board Eyes Hiring Firm to Improve Online Wagering,” Daily Gazette, June 11, 2013.

[29] Rick Karlin, “Synthetic Track Weighed at One Of NYRA’s Race Courses,” Albany Times Union, June 1, 2016.

[30] Matter of New York Charter Schools Assn., Inc. v. DiNapoli, 13 N.Y.3d 120 (2009); Matter of Dinallo v. DiNapoli, 9 N.Y.3d 94 (2007).

[31] See Liebman, “No Dinero from American Pharoah,” https://saratogainstitute.wordpress.com/2016/07/25/no-dinero-from-american-pharoah-new-york-horse-racing-in-2015/. Inflation adjusted handle in New York racing is lower than it was at the inception of pari-mutuel wagering in 1940.

[32]  See generally Program Bill # 24 2016. https://www.governor.ny.gov/sites/governor.ny.gov/files/atoms/files/GPB24_NYRAREORGANIZATION_BILL. “Cuomo Submits NYRA Privatization Plan,” Blood-Horse, June 8, 2016.

[33] L. 2016, Ch. 60, Part SS.

[34] See note 15, supra. Given the existence of a contractual agreement guaranteeing VLT payments to NYRA, it is certainly questionable whether a statute can modify this agreement.

[35] See note 26, supra. Prior to the 2016 legislation, there was no vendor’s capital award authorized for the Resorts World at Aqueduct facility. See Tax Law § 1612.b.1.ii.(H).

[36] L. 2016, Ch. 60, Part DD. See Joseph Spector, “Finger Lakes Track Gets Better Tax Deal,” Rochester Democrat and Chronicle, April 7, 2016.

[37] The State budget for pre-secondary education is $34.36 billion dollars. See http://openbudget.ny.gov/spendingForm.html.

[38] Time Warner News 5:00 AM TW, 9 TW9N, August 30, 2006.

[39] Local News 6:30 AM CBS, 6 WRGB, August 21, 2006.

[40] Ed Fountaine, “NYRA Tabs Handel as New Messiah,” New York Post, August 24, 2007.

[41] “Concerned Citizens For Saratoga Racing Tabs Lewi As Chair, Pushes for Track Privatization,” Saratoga Business Journal, June 8, 2016. See also See Paul Grondahl, “Ed Lewi, Public Relations Legend, Dies at 81,” Albany Times Union, August 29, 2015; Kyle Adams, “Lewi Left Mark on Region,” Daily Gazette, August 30, 2015.

[42] Rick Karlin, “Group Fears State Raid on NYRA,” Albany Times Union, May 25, 2016.

[43] Press Release, Concerned Citizens for Saratoga Racing, “Concerned Citizens for Saratoga Racing Rejects Governor’s NYRA Re-privatization Plan,” May 24, 2016. Found in http://thoroughbredconfidential.com/concerned-citizens-for-saratoga-racing-rejects-governors-nyra-re-privatization-plan/. Todd Shimkus, the head of the Saratoga County Chamber of Commerce had previously stated of the reorganization board, “Management has come in and made the tough choices to make it profitable.” Stephen Williams, “Supervisors Back Returning NYRA to Private Control,” Daily Gazette, May 6, 2016.

[44] Id. The Concerned Citizens believed that the Governor’s plan called for seven public appointees. The actual plan of the governor called for six public appointees.

[45] Id. See also Stephen Williams, “Woerner, Marchione on Same Page on NYRA,” Daily Gazette, June 1, 2016.

[46] Stephen Williams, “Race Course Opens Its Gates NYRA Takes Wraps Off 148th Season at the Track,” Daily Gazette, July 22, 2016.

[47] See note 31, supra.

[48] Ed Comerford, “Cuomo Seeks OTB Reform, Simulcasting Bill,” Newsday, October 8, 1983.

[49] Joe Hirsch, “Gov. Cuomo Signs Racing Aid Bill to NYRA Tracks, Daily Racing Form, October 8, 1983. See generally Liebman, “Ownership of the NYRA Racetrack Properties: 1983 in Review,” August 24, 2015. http://dx.doi.org/10.2139/ssrn.2650038.

[50] Stephen Williams, “NYRA Anticipates $4M Profit,” Daily Gazette, November 9, 2015. See also Mike Veitch, “Moves could hurt New York racing,” Saratogian, January 26, 2016.

[51] Stephen Williams, “NYRA Eyes Annual $15M in Track Upgrades,” Daily Gazette, May 5, 2015. “If the projects go forward, it would be the largest set of improvements at the track since the 1890s, when the current grandstand was constructed.”

[52] “Time to Let NYRA Run Free,” Daily Gazette, April 14, 2016.

[53] Assembly Bill No. 10429, same as Senate Bill No. 7918.

[54] Memorandum in Support of Assembly Bill No. 10429. http://assembly.state.ny.us/leg/?default_fld=&leg_video=&bn=A10429&term=2015&Summary=Y&Memo=Y.

[55] Under these bills, they only have a voting member if a NYRA board member is serving on their respective boards.

[56] Rick Karlin, “Bill on NYRA Changes Awaits Will of Governor,” Albany Times Union, June 26, 2016.

[57] Id.

[58] Senate Bill No. 8159, Part B, same as Assembly Bill No. 10741. This bill included amendments to the State budget.

[59] L. 2016, Ch. 73.

[60] Assembly Bill No. 10429, § 1.

[61] Arguably, the terms of § 703 of the Not-for-Profit Corporation Law governing the selection of board members would apply, but would this be affected by the provisions in Assembly Bill No, 10429 which states that “All

members shall have equal voting rights?” Assembly Bill No. 10429, § 1.

[62] Assembly Bill No. 10429, § 1. Additionally, there is considerable ambiguity over the meaning of the word “current” in the legislation.

 

[63] An audit committee would not be mandated by the Not-For-Profit-Corporation Law. See § 712-a.

[64] See Minutes of NYRA Board Meeting, December 12, 2012, Minutes of NYRA Board Meeting, June 10, 2013. https://www.nyra.com/assets/4/7/2013_(June_10)_BOD_meeting_minutes_(signed).pdf.

[65] See note 30, supra.

Posted in Uncategorized | Leave a comment