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Belmont Stakes Overshadowed By Money Woes

RICHARD ROSENBLATT   05/31/10 02:13 PM ET   AP

Belmont Stakes

NEW YORK — The most intriguing five weeks of the thoroughbred racing season come to a close with Saturday's 142nd running of the Belmont Stakes, the final leg of the Triple Crown and New York's premier horse race.

While there's not much buzz surrounding the lackluster field lining up for the 1 1/2-mile trip around Belmont Park this year – no Triple Crown on the line and neither Kentucky Derby winner Super Saver nor Preakness winner Lookin At Lucky are running – there's plenty humming when it comes to the frazzled financial state of racing in New York.

Sure, the entire industry is far from flourishing, but in New York some would argue it's simply floundering.

Consider a one-week span late last month:

_On a Monday, the association that operates New York's three major tracks – Aqueduct, Belmont and Saratoga – said it was running out of money and hinted of an unprecedented shutdown unless the state came through with a loan.

_By Friday, the 1,400 employees of the New York Racing Association had been warned that racing could cease June 9, four days after the Belmont, and the lucrative Saratoga summer meet could be in jeopardy.

_After a weekend of negotiations, state lawmakers approved a $25 million loan on May 24 that should keep NYRA in business into next year.

The Belmont Stakes is a go, so is the rest of the meet, and Saratoga – the jewel of New York racing – is set for its run beginning July 23.

"I think that's a step in the right direction," says top trainer Todd Pletcher, who won his first Derby with Super Saver and runs one of the nation's largest stables. "Everyone takes a sigh of relief and we continue with business as usual."

All is not well, though. This kind of stuff has been going in New York racing for decades. A loan here, a deal there. A temporary fix, followed by another plea for state money.

The current problems are not a secret, starting with the failure of New York Gov. David Paterson and the legislature to approve a group to operate video lottery games at Aqueduct. The 4,500 machines, which were approved by the state in 2001, could generate hundreds of millions in revenue for the state and the racing industry.

The New York City Off-Track Betting Corporation owes NYRA $17 million, was recently taken over by the state and is currently in bankruptcy. It has been losing money for decades.

The state, meanwhile, is working on solving its own $9.2 billion budget deficit.

There are six regional off-track betting outfits in New York that take in about $2 billion annually, and they all act independently, not only competing against each other for customers, but with NYRA as well.

"There's nothing wrong with New York that (a repair to) a broken OTB model and a partisan political arena couldn't fix," David Willmott, the CEO of Woodbine Entertainment Group, which operates Woodbine Racetrack, told The Toronto Globe and Mail recently. "The biggest thing is that Albany has been fooling around for so many years on the naming of a slot operator, which in that market, would be highly profitable."

Charles Hayward, NYRA's president and CEO since 2005, says he's hopeful the recent series of events may jump-start long overdo changes.

"I don't know why I should be, but I think some things will fall into place by the end of the year," Hayward said. "If tracks and OTBs were working together, we would have the best racing in the country."

One reason Hayward is optimistic: After two previous deals fell through with a casino operator due to either political squabbles or financial issues, the New York Lottery now is handling a new bidding process and plans to announce its recommendation by Aug. 3. Paterson says he will he accept the choice, leaving final approval to the legislature. Previously, political leaders were in charge from the start.

"The Lottery making the selection for an operator and then making the recommendation to the political leaders is huge," Hayward said. "I think it was critical to get this money, it's critical to get the (casino) operator's name, and I think we're so much farther along then we were only a month ago."

The relationship with NYCOTB is a more complex problem.

NYCOTB was taken over by the state in 2008, and filed for Chapter 9 bankruptcy protection last year to reorganize an operation that takes in about $1 billion in revenue annually, but was reportedly losing between $600,000 and $800,000 per month.

"You can't pay what you don't have," NYCOTB chairman Meyer "Sandy" Frucher said, adding he was handed a flawed operation when he was appointed by Paterson in June 2009. "The NYCOTB business model is horribly out of date so that when you put it together it forces the dysfunctionality of the industry, particularly given that it is a major revenue raiser."

While NYRA turns its attention to staging the $1 million Belmont, it also is keeping tabs on Monmouth Park's new initiative of cutting racing dates to three days a week – with $1 million in purses daily for a 50-day meet from April to September. The purse structure is the highest in the nation.

Pletcher is among many horsemen watching what unfolds at Monmouth.

"It's premature to say now, but it looks like it could be a success," Pletcher said. "If so, then I think a lot of other tracks will take that into consideration and maybe change what they are doing."

For now, NYRA is mandated to run year-round racing, which totals about 250 racing days.

At the Preakness in Baltimore, Hall of Fame trainer D. Wayne Lukas made his annual call for a racing commissioner, and used New York racing as an example of what one strong voice might accomplish.

"Look at the New York Racing Association. I bet you can't name three executives and if one of them called a congressman he wouldn't get a call back because the guy wouldn't even know who he was," Lukas said.

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Filed by Priyanka Boghani  |