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NYRA overcharged by a nose
Agency told to refund bettors millions for 1 percentage point error
By JAMES M. ODATO, Capitol bureau
Updated 09:19 a.m., Thursday, December 22, 2011
SCHENECTADY -— The state Racing & Wagering Board on Wednesday directed the New York Racing Association to pay back thousands of bettors about $8.6 million and offer a discount going forward on so-called "exotic" bets.
The board said NYRA overcharged bettors the past 15 months on sums it keeps for itself from each betting dollar and that a continuing probe is underway to determine culpability.
The racing board voted to require the repayments after racing officials discovered NYRA overcharged by 1 percentage point the amount it kept from "exotic" bets. Those bets include Pick 6, Pick 3, Pick 4, Grand Slam, trifecta and superfecta wagers, according to NYRA, which called the problem an unintentional mistake.
NYRA, which runs races for the state at the Aqueduct, Belmont and Saratoga thoroughbred tracks, will be required to pay back bettors about $8.6 million, according to one state official, if it can track them down through racing accounts. It will also have to help clear up IRS issues for those people with profits to report. Further, NYRA will be required to pay a $50,000 contribution to a racing-related charity.
The overcharges occurred not just on bets from NYRA tracks, but also on those handled by remote betting agencies involving NYRA races.
The racing association was supposed to reduce the maximum sum it kept from such bets to 25 percent starting on Sept. 15, 2010, but continued to charge a 26 percent takeout, according to Racing and Wagering officials and NYRA.
NYRA which cooperated with the state on the corrective measures, will be expected to charge 24 percent for a period of time that the racing board will determine in negotiations with NYRA.
"We're taking action to protect the betting public," said Racing Board Chairman John Sabini. He said the situation could end up being a positive because the lower takeout rate may attract more wagering in New York.
NYRA announced shortly after the meeting that its exotic wagers will be lowered by two percentage points to correct an "unintentional oversight," but it did not answer messages left seeking comment.
Racing board officials said non-NYRA betting agencies will be inconvenienced by having to contact their account wagering customers and reporting to the board, as NYRA must, about who is being impacted by the snafu.
NYRA attributed the problem of overlooking the reduced rate "due to the complexity of the takeout provisions in the racing law." State officials just learned of the mistake in the past few days. NYRA is under investigation by the Office of the State Comptroller and the state Inspector General's Office.
"I don't expect this will ever happen again," Racing Board Commissioner Charles Diamond said.
The board said NYRA overcharged bettors the past 15 months on sums it keeps for itself from each betting dollar and that a continuing probe is underway to determine culpability.
The racing board voted to require the repayments after racing officials discovered NYRA overcharged by 1 percentage point the amount it kept from "exotic" bets. Those bets include Pick 6, Pick 3, Pick 4, Grand Slam, trifecta and superfecta wagers, according to NYRA, which called the problem an unintentional mistake.
NYRA, which runs races for the state at the Aqueduct, Belmont and Saratoga thoroughbred tracks, will be required to pay back bettors about $8.6 million, according to one state official, if it can track them down through racing accounts. It will also have to help clear up IRS issues for those people with profits to report. Further, NYRA will be required to pay a $50,000 contribution to a racing-related charity.
The overcharges occurred not just on bets from NYRA tracks, but also on those handled by remote betting agencies involving NYRA races.
The racing association was supposed to reduce the maximum sum it kept from such bets to 25 percent starting on Sept. 15, 2010, but continued to charge a 26 percent takeout, according to Racing and Wagering officials and NYRA.
NYRA which cooperated with the state on the corrective measures, will be expected to charge 24 percent for a period of time that the racing board will determine in negotiations with NYRA.
"We're taking action to protect the betting public," said Racing Board Chairman John Sabini. He said the situation could end up being a positive because the lower takeout rate may attract more wagering in New York.
NYRA announced shortly after the meeting that its exotic wagers will be lowered by two percentage points to correct an "unintentional oversight," but it did not answer messages left seeking comment.
Racing board officials said non-NYRA betting agencies will be inconvenienced by having to contact their account wagering customers and reporting to the board, as NYRA must, about who is being impacted by the snafu.
NYRA attributed the problem of overlooking the reduced rate "due to the complexity of the takeout provisions in the racing law." State officials just learned of the mistake in the past few days. NYRA is under investigation by the Office of the State Comptroller and the state Inspector General's Office.
"I don't expect this will ever happen again," Racing Board Commissioner Charles Diamond said.
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