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N.Y. budget guarantees NYRA will maintain level of casino revenue
Matt HegartyApr 11, 2022
A budget for New York approved on Saturday by state legislators includes language that guarantees that the New York Racing Association will continue to receive significant payments from the state’s casinos, a significant victory for NYRA, which runs Aqueduct, Belmont, and Saratoga Race Course.
In fast-tracking the approval process for three new downstate casinos, the budget changed the definitions for terms used in previous language protecting the payments, leading to the need for a clarification. The new language requires the payments to equal the size of the allotment in 2019 and indexes the total to the national consumer price index.
NYRA receives the payments from a casino located adjacent to Aqueduct and from casinos operated by several OTB companies on Long Island. The payments support purses at NYRA’s tracks and the association’s business operations, as well as providing funding for the association’s capital projects.
Last year, animal-rights groups began lobbying state legislators to strip the payments from NYRA, leveraging the negative publicity surrounding the racing industry due to the positive medication test by Medina Spirit after the 2021 Kentucky Derby. Racing enjoys strong support in upstate New York, where the state’s breeding farms and Saratoga are located, but support for animal industries has been waning in downstate urban areas.
NYRA responded with its own lobbying campaign to protect the payments, and in the fall it joined with other racing constituencies and business groups to counter the animal-rights’ groups claims. The campaign included television commercials touting racing’s economic impact.
“The budget clearly recognizes the importance of horse racing to the New York State economy,” said Patrick McKenna, a spokesman for NYRA, on Monday. “Overall fan interest and engagement with New York racing has never been stronger, and the consistent support expressed by lawmakers in Albany will only further the sport’s role as an engine for economic opportunity that creates jobs in every corner of the state.”
The support payments totaled $120.7 million in 2019, the high-water mark (casino revenues in 2020 and 2021 were heavily impacted by the coronavirus pandemic). Of that total, $60.4 million went to purses at New York tracks, with the rest going to capital-improvement projects and to NYRA’s operating budget.
Separately, NYRA has been seeking approval from the legislature to float $450 million in bonds to help finance the redevelopment of Belmont Park, which hosts the third leg of the Triple Crown, the Belmont Stakes. The redevelopment includes plans to construct a new grandstand as well as renovations to the main track and its two turf courses, plus the installation of a synthetic surface.
NYRA is a not-for-profit company, and its franchise agreement to operate the tracks is dependent on state support. As part of a bankruptcy reorganization in 2008, the state took title to the properties operated by the association. Losing the payments from the casino would significantly diminish the size of the cash flows underlying the bonds.
NYRA has already started a project at Belmont to construct a retaining wall and access tunnel from a location on the backstretch to the infield, which would be necessary to complete renovations to the track’s racing surfaces.
NYRA officials have emphasized that the association will make all the debt and principal payments to pay off the bonds, and they have said that they continue to work closely with legislators and the governor’s office to gain support for the proposal to issue state-backed bonds.
Dave O’Rourke, NYRA’s president and CEO, said Saturday he is hopeful a bill could get passed by the end of the state’s legislative session in June.
“This will give us a little more time to talk to some of the legislators up there [in Albany] and answer questions,” O’Rourke said. “There’s a lot going on in a good way, whether it’s gaming-related or the [new stadium for the Buffalo Bills] and these are all great projects. Our turn will come. I’m encouraged from the dialogue. The dialogue has been very healthy. It’s a big project. The idea isn’t new and I think it’s very logical and straightforward.”
--additional reporting by David Grening
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