Probe of NYRA execs may be launched - NYRA may lose slots subsidies

[Track Phantom]

[QUOTE=thaskalos]I think we can all safely assume that this would clearly be the case.

Say what you will about the horse racing industry; they have been very negligent in many facets of this game.

But they have displayed remarkable consistency and effectiveness in collecting the takeout...[/QUOTE]

My point exactly. This is a very important distinction in this situation. I admit I'm very uninformed on how takeout rates are adjusted, who is responsible, etc. But I would ask the following questions if I were investigating:

1. Have takeout rates been decreased in the recent past?
2. If takeout rates have been decreased, who is responsible to implement the decrease and what is the process?
3. If takeout rates have decreased, what timeframe have they been implemented and (most importantly) is there precedent for delayed decreases?

If the answers are, YES, takeout rates have decreased recently (within the time frame that the current executive group is employed) and those decreases were handled by "X" and they were implemented in the following "X" way AND they occured on the date they were set to decrease, then why didn't the reverse take place?

[foregoforever]

Originally Posted by Valento

I'm going to ask this again but slightly differently since this wasn't exactly addressed and I'm very curious as to the answer.

• Does anyone feel that if the takeout rate was set to INCREASE as of a certain date, it would have been overlooked?

I know there is no way to know but I'm pretty sure it would have increased at 12:01 AM on the day it was set to increase.

The answer to the first question was in the background section of the interim report released earlier this week.

The law went into effect Sep 15 2008. NYRA's request for the higher rate was put in on Aug 13 and approved by the Wagering Board on Sep 12. So yes, you're correct in your assumption.

Keep in mind, though, that there were lots of eyes on this issue back then, as the law was intended to help the NYCOTB. All those eyes were shut tight in 2010, apparently.

[Track Phantom]

Originally Posted by foregoforever

The answer to the first question was in the background section of the interim report released earlier this week.

The law went into effect Sep 15 2008. NYRA's request for the higher rate was put in on Aug 13 and approved by the Wagering Board on Sep 12. So yes, you're correct in your assumption.

Keep in mind, though, that there were lots of eyes on this issue back then, as the law was intended to help the NYCOTB. All those eyes were shut tight in 2010, apparently.

I mistyped on my original question. I meant to say DECREASED, not increased. Obviously, my point was the error is in their favor.

[aaron]

Originally Posted by cj

You are probably right. Let me ask you this. If that were the case, which group that missed the lowering of the takeout would have been there to make sure it was increased? The State Comptroller, the NYSRWB, or NYRA? Or all of them?

i think all of them would have been there.
One question,we all know the Aqueduct winter meet is profitable. Saratoga is profitable.Is NYRA unprofitable because of racing at Belmont ?

[elhelmete]

Originally Posted by Valento

But I would ask the following questions if I were investigating:

1. Have takeout rates been increased in the recent past?
2. If takeout rates have been increased, who is responsible to implement the increase and what is the process?
3. If takeout rates have increased, what timeframe have they been implemented and (most importantly) is there precedent for delayed increases?

If the answers are, YES, takeout rates have increased recently (within the time frame that the current executive group is employed) and those increases were handled by "X" and they were implemented in the following "X" way AND they occured on the date they were set to increase, then why didn't the reverse take place?

I think the process works one way if the increase/decrease at hand falls within the legally proscribed range. Like as long as you're within the range, it's business as usual and any change in the rate falls 'between the sidelines' with RWB and NYRA knowing what to do.

What I'm feeling here is a failure to define execution part of the sunset provision that was attached to the hike in the trifecta takeout *outside* that range. In my experience, making things "automatic" like this is a bad idea...sounds good at the time to get people to agree to an 'emergency' hike, but the details seem to never be clarified at the time. IMHO, and in my experience with somewhat similar things, you gotta start talking about the 'sunset' a while before it happens.

[Ocala Mike]

Here is the e-mail I sent to the Saratogian and the Albany Times-Union when this story first hit:

"I don't understand why the New York State Department of Taxation and Finance is getting a pass on this. You need to talk to someone in what passes for their Pari-Mutuel Revenue Unit in Albany and ask them why they didn't catch this error for 15 months.

Prior to 1991, Pari-Mutuel Examiners of the Tax Dept. were in place at NY State tracks and off-track betting venues to check EACH AND EVERY POOL to insure the accuracy of the reported handle, commission, breakage, and payoff to the public. They also saw to the collection of franchise fees and admissions taxes. In that year, NY State decided, AS A COST-CUTTING MEASURE, to disband the entire unit, and lay off or transfer the employees.

I know this for a fact because I was one of the examiners so affected. All you have to do is check the history of NYRA's transgressions over the last two decades to realize the State Tax Dept.'s decision to leave the henhouse unguarded was actually a very costly one. Had we been in place, say, on 9/15/10, the error would have revealed itself after the running of the very first race with "exotic" betting."

Incidentally, my ex-boss who was the only representative of the Tax Dept. remaining in place at NYRA until August, 2010 (!!!) just e-mailed me to inform me that he was recently contacted by a reporter for the Albany Times-Union about this.

[classhandicapper]

Originally Posted by Grits

Maybe I'm thinking fairly simple here, but I don't believe any bank's commercial loan officers would necessarily agree with you, particularly after reviewing tax returns, quarterly summaries indicating operating expenses, FIXED assets--along with depreciation and other factors that go into determining annual profits (or losses), etc, etc.

The only way you're going to get into the further business of investing capital, is to show that you have the fixed assets that are unencumbered. To show that your business operation is profitable, year after year. Profit is success. If you don't have it at the most basic level, you're not likely to have investment capital--period.

I don't think you are understanding my point.

There isn't an informed investor on the planet that doesn't consider the amount of capital he has invested in a business when determining if it is successful. I have no idea how much the land and facilities at AQU are worth so I can't use that as an example, but here's the point.

If you have 200m of invested capital in your business and you earn 5m a year, it's time to get out of that business and do something else. You are only earning 2.5% on capital despite the incremental risk and hassle of business ownership when you could get better returns with little to no risk.

I'd turn the page on anything less than 20m (10%) except in some unusual circumstances and in most cases I'd want more than that.

[Grits]

No I understand quite well what you said, which was "profit is not success."

5 million, is nothing, one's losing their butt, by your example and anyone can realize this, myself included. Its what one would term, a miserable failure. One doesn't pull 200 million out of thin air, or walk into a bank requesting such an amount without having had success in other established business beforehand. Profit, anyway one looks at it creates success. Somewhere, one's got to prove they've got the ability to make good on this investment. It doesn't have to be 200 million. As we both know, I'm sure, this same premise applies everyday in business and in banking. It doesn't matter how large the venture, or how small.

Originally Posted by classhandicapper

I don't think you are understanding my point.

There isn't an informed investor on the planet that doesn't consider the amount of capital he has invested in a business when determining if it is successful. I have no idea how much the land and facilities at AQU are worth so I can't use that as an example, but here's the point.

If you have 200m of invested capital in your business and you earn 5m a year, it's time to get out of that business and do something else. You are only earning 2.5% on capital despite the incremental risk and hassle of business ownership when you could get better returns with little to no risk.

I'd turn the page on anything less than 20m (10%) except in some unusual circumstances and in most cases I'd want more than that.

[Tom]

Class, racing is their business.
They have had those assets for decades.

It would make no sense to get out of racing because they could make more money with condos or a strip mall. The only time the capital investment would come up is if they were looking at buying new land.

For NYRA, it is not roi on capital but operating revenue.

[Grits]

This is what I meant by FIXED ASSETS. Land, buildings, bricks, mortar, etc. When you own it--you've got much greater room for profit and for leverage, particularly when said property is debt clear and you are in possession of the deed.

In this case, NYRA no longers owns the properties, but still in business, you get my drift.

[Ocala Mike]

I was contacted earlier today by a reporter from the Albany Times-Union named Jim Odato who is covering this story. I gave him a statement regarding the fact that the NY State Tax Department should have had personnel in place at the track to "test" the tote for the change in the commission rate on 9/15/10 from 26% to 25%.

No such "test" ever took place because the Tax Dept. disbanded the Pari-Mutuel Revenue Unit years earlier and eliminated the last employee standing in August, 2010, the month before.

Jim's story is supposed to appear in the Mon., 5/7 edition of the Albany Times-Union, so I'll have to check on-line to see what he writes.

[lamboguy]

http://www.bloodhorse.com/horse-raci...#ixzz1twEXwBbc

please bring back BILL NADER

[cj]

Hmmmm....article says "MAY have known".

[betovernetcapper]

Yes, like George Costanza 'may have known' it was wrong for him to have sex with the cleaning woman on his desk.

[cj]

Originally Posted by betovernetcapper

Yes, like George Costanza 'may have known' it was wrong for him to have sex with the cleaning woman on his desk.

He may have known, I'm just saying at this point it doesn't matter, he was toast.