N.Y. / Region
ALBANY STUDYING PROPOSALS TO AID RACING INDUSTRY
By LENA WILLIAMS, Special to the New York Times
Published: March 14, 1981
ALBANY, March 13—
New York State officials, troubled by a decade of
financial losses in the state's racing industry, are considering several
proposals to reverse the trend and increase the state's diminishing
share of racing revenues -including the possible abolition of the New
York Racing Association.
They are concerned about the erosion on several
fronts of New York State's position as the nation's leader in horse
racing: the arrival of casino gambling in New Jersey, the increasing
possibility of legalized sports betting, the popularity of offtrack
betting and the failure of state government to help, a situation that
some racing experts say has limited the industry's ability to remain
competitive.
Innovative and aggressive action by other racing
states, mainly New Jersey, Florida and California, has begun to siphon a
greater share of racing dollars and racing jobs away from New York. For
example, California tracks have introduced million-dollar purses to
attract bettors, while New York has yet to do so. Nevertheless, more of
what the racing industry considers its most prestigious thoroughbred
races are held in New York than anywhere else.
Projections Pessimistic
The Racing Association and its operations have
generated $50 million annually in direct revenues to the state and
produced more than $1.5 billion in state parimutuel revenue since 1955,
when it began operating the Aqueduct, Belmont and Saratoga tracks
By the Racing Association's own estimate,
thoroughbred racing at the three tracks provides more than 10,000 jobs.
The industry has contributed about $1 billion a year to the state's
economy, both directly and indirectly, according to the association's
tallies.
But state officials have long felt that New York was
not making as much money as it could under the Racing Association. In
addition, the association's recurrent indebtedness and inability to
raise sufficient funds to cover capital construction costs have resulted
in pessismistic projections that New York might soon derive no revenues
at all from the association's tracks. Its debt increased from $29.4
million in 1979 to $32 million in 1980. 10-Year, $47 Million Loan
In the fall of 1955, the New York Racing
Association, a group of horse owners and breeders, took a 10-year, $47
million loan from a consortium of banks to purchase four tracks,
including the nowdefunct Jamaica Racetrack in Queens.
But because of the Racing Association's inability to
pay its debts, the state has had to supplement the initial borrowing by
providing temporary tax relief and allowing the association to permit
races on any day except Christmas Day, Palm Sunday and Easter Sunday.
While some in the racing industry insist the outlook
is not as bleak as many have forecast, the state's growing displeasure
with the association has led some officials to consider a possible
takeover of the Racing Association or a consolidation of all racing
operations - on-track, off-track, and harness track.
Officials of the Racing Association insist that they
are more competent than the state to run the tracks and need only state
help. They want New York to issue $70 million in long-term, tax exempt
bonds to help the association repay its current debt and make capital
improvements at the tracks.
Legislative leaders have expressed concern about the
soundness of floating $70 million in tax exempt bonds. Under the
association's plan, the state would purchase the association's
properties with the proceeds from the sale of the bonds and then lease
the facilities back to N.Y.R.A. At the conclusion of the lease, the
association would have the option of purchasing the facilities from the
state for a nominal price.
''I detect no groundswell of enthusiasm for the
state to shoulder the responsibility and risk of a substantial bond
issue without the title to those properties reverting permanently to the
people of the state,'' said Assemblyman William B. Finneran, Democrat
of White Plains and co-chairman of the joint legislative task force
studying the racing and breeding industry in the state. ''Support just
isn't there for us to shoulder the risk, then for a nominal fee, return
three modernized facilities to an association which is, for all
purposes, like a private corporation.''
Mr. Finneran was appointed to the task force by
Assembly Speaker Stanley Fink, Democrat of Brooklyn. Mr. Fink, who has
taken a particular interst in the issue, has scheduled to hold a press
conference tomorrow to present his own plan to resolve the state's
racing problems.
The state could, for example, form a public benefit
corporation, similar to that of the New Jersey Sports Authority, which
operates the Meadowlands race track, a proposal which has been put forth
by the task force. Such a proposal would provide the state with the
option of either operating the facilities itself or leasing them to
another operator. Doubts About State Takeover
But that, too, could have problems gaining support
in Albany. Anthony Chetko, an aide to Governor Carey, expressed
''grevious doubt'' that the government was capable of running racing
better that a private corporation.
And a spokesman for the Senate majority leader,
Warren M. Anderson, Republican of Binghamton, said that Mr. Anderson
had not tended to lean in the direction'' of a takeover, but quickly
added that ''we can't rule it out.'' The spokesman, Richard Roth, noted
that if there were a restructuring of the racing industry, the New York
Racing Association ''may be taken out'' of the picture.
James P. Heffernan, president of the Racing
Association, insists there is no risk to the state. He argues that the
association is ''a solid company'' with considerable real estate to back
any bonds floated in its behalf.
The association wants other help, such as a reduced
state takeout - a move that encourages more business by giving more to
the bettors. The takeout - the amount the state takes from bets - was
reduced experimentally from 17 percent to 14 percent in 1978, with the
state absorbing the loss. The results were good for the industry, but in
a budget fight between Governor Carey and the Republican-controlled
Senate, the 14 percent experiment failed to be extended the next year.
Cuts in Attendance
Other plans to stimulate racing in New York have
brought mixed results. Offtrack betting attracts new fans, but the
association's members have long contended that off-track betting cuts
into track attendance. While the association receives a share of the
revenues from off-track betting, it gets a larger amount from track
bets.
Bernard Rome, former chairman of the Offtrack
Betting Corporation and one of the Racing Association's toughest
critics, accused the association of holding back'' the growth of
off-track betting even though the profits are returned to state and
local governments.
''If it wasn't for off-track betting, N.Y.R.A. would
be out of business,'' Mr. Rome said. ''But they are more concerned with
preserving the tradition of racing at the track.''
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