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Beating The Odds

Despite a recent financial crisis for the New York Racing Association, Saratoga remains an example for racing success

by Ali Hibbs on August 11, 2011 · 1 comment

Martin Benjamin

There were almost no horses, no hats, no photo finishes and, certainly, no big winners. Last year the Saratoga Race Track nearly stayed dark for the summer. “When I heard that they might not open, I was devastated,” remembers Melissa Kopp-Maye, a 40-year-old LPN who has lived in the Capital Region all of her life. Looking around the track on the balmy Saturday of the Whitney Cup, she says, “I’ve been coming up here every year since I was a little girl.”

Ongoing financial difficulties at the New York Racing Association caused doubts that the track at Saratoga would be able to remain open for the entire 40-day meet, if it managed to open at all. Had this occurred, the region would have lost more than $200 million in expected revenues and a time-honored tradition would have been badly tarnished. (Since the track opened in 1864, it has closed only four times: once during a 2006 heat wave, and for three entire seasons during World War II.) At the last minute however, maneuvers by state legislators and NYRA headed off the potential catastrophe, and their continued efforts aim to ensure that Saratoga remains not just open, but a national leader in the horse-racing industry.

Horse racing in New York has been on a slow, steady decline for a number of years, according to state Sen. John Bonacic (R-Mt. Hope), chairman of the Racing, Gaming and Wagering Committee. Unsurprisingly, the state of local and federal economies has not done much to reverse the situation. “Especially at the OTBs,” he says. “I think people’s habits are also changing; they don’t necessarily go the that mortar and brick building that may be in their neighborhood anymore. You’ve got a younger generation using technology for gaming, from anything to basketball to football games to racing.”

Failing Off Track Betting corporations are a major part of the financial difficulties that threatened the Saratoga season last year. Appointed by the State of New York, the NYRA board is responsible for running the racetracks at Aqueduct and Belmont, as well as the one in Saratoga. Revenues come from the three tracks, various vendors and from OTBs. Last year, New York City Off Track Betting went bankrupt and defaulted on $20 million in payments to NYRA, causing an operational shortage that was felt across the state. Because NYRA is a state-appointed, non-profit corporation, there are limits on cost-cutting measures that may be taken and stipulations on the amount of days each track must run, all of which restricted the organization in its ability to deal with decreasing revenues. A last-minute $25 million loan from the state enabled NYRA to keep operating, but they had to find a way to overcome long-term losses. NYCOTB accounted for more than 10 percent of NYRA’s annual revenues.

‘The closure of NYCOTB could have been a fatal blow to the racing industry in New York,” says Dan Silver, director of communications and media relations for NYRA. “New York has the biggest racing industry in the country, so you’re looking at a situation where there could have been a significant blow to the entire industry.”

“That’s really the only problem Saratoga has,” says Mike Veitch, communications director and NYRA liaison for Sen. Roy McDonald (R-Saratoga), “whether or not NYRA runs into serious financial problems. It seems like things are going better now, especially with some of the things NYRA has done that are going to help out racing in general and the entire industry in the long run.”

“They’ve been nothing but positive, professional and I’d even go so far as to say entrepreneurial,” says Saratoga Chamber of Commerce President Todd Shimkus. “The loss of NYCOTB was one of their major streams of revenue, and they’ve figured out how to quickly make up that revenue by doing some things they had never done before.”

The steps that NYRA has taken are many and varied—intended to address the complexity of the financial problems afflicting the industry, from OTB closures to widespread economic uncertainty—and they seem to be having the desired effect. Revenues are down only 1.6 percent this year, just a fraction of the 11-percent losses that were expected.

“What we wanted to do was make sure that we did everything possible to capture as many [New York City] bettors as we could and retain those wagering dollars,” says Silver. A bet made at the track nets NYRA approximately four times as much as a bet made through an OTB. “That’s why, to break even, we didn’t have to capture all of the lost business from NYCOTB. We only had to capture 30 to 40 percent of it.” In an effort to do so, NYRA began providing bus transportation betweeen Aqueduct Race Track and former NYCOTB locations. Compared with last year, attendance at Aqueduct this year was up 48 percent and the total on-track handle increased by 73.6 percent. “We’re pleased at this point with how everything has gone.”

Perhaps even more significantly, telephone and online wagering—through the NYRA Rewards Advanced Deposit Wagering system—has seen a dramatic increase. Thanks to legislative support from the Racing, Gaming and Wagering Committee, the ADW system has been made more accessible and races can now be streamed on the NYRA Rewards website. “Obviously, that’s a big deal,” says Silver. “If someone can watch the races, they’re far more likely to wager. We’re really thankful to Sen. Bonacic and the committee for helping to get that approved.”

At Belmont, NYRA Rewards telephone wagering was up 146 percent and online wagering increased by 231 percent. Expanded simulcast options at both tracks have also allowed for increased betting on races that are happening at other tracks. A brand new simulcast cafe at Belmont brought in $16.4 million during the Aqueduct winter-spring meet.

“Saratoga is the top track in the country,” says NYRA’s Dan Silver. “It’s the biggest money-making track in the entire country.” Crediting a number of convergent reasons, he continues, “We get the top horses, the top trainers, the top jockeys, the top owners and the top fans. The racing model has changed in recent years, with more people doing online and phone wagering, but here in Saratoga it’s far and away the most attended track in the country. We get upwards of 23,000 people here a day. At most tracks you might get 1,000 to 2,000 people. There’s no other place where you can go during the day and then, at night, everyone is in the neighboring town talking about horse racing. It’s all horse racing all the time in Saratoga. For a fan, there’s nothing else like it.”

“The people that go to Aqueduct and Belmont,” says Shimkus. “They really go there to gamble. It’s different here in Saratoga. People come to gamble at the track, but they also come here for so much more.”

“There’s nothing else like it,” says Kopp-Maye. “The ambience, watching the horses, the women in their hats. I take my three kids there; I still go with my parents sometimes. It’s always a full day and it’s always a lot of fun.” Kopp-Maye is at the track her boyfriend celebrating a friend’s birthday. “Left the kids home today,” she smiles.

“I go to Saratoga because the horses are the best in the world,” says David Wasniski, a 32-year-old human-resources manager from Rotterdam. “As a sports fan, I have respect for that. I like to gamble, but I go to Saratoga because it’s live and has a fun atmosphere and I like watching the actual horses. It’s just not the same on a TV.” Wasniski and his wife, Beth, go to Saratoga at least three times a year, he says. “My brother Randy’s birthday is always on or very close to the Travers. Every year my mom buys tickets; we watch the race, and then go out for dinner and drinks. It’s become a kind of tradition.”

“Oh, and they lowered the price of beer by almost half this year,” adds Wasniski, mentioning that NYRA has also reduced prices on other staple items. “I like that!”

“To make it easier for people to afford to spend the whole day here,” explains Shimkus, “rather than raising prices on things like beer, lemonade and popcorn, NYRA decided to lower them so that people wouldn’t feel gouged the way they do at so many sporting facilities these days. They wanted to set themselves apart from the Yankee Stadiums and the Madison Square Gardens.”

“Believe it or not,” he adds, pointing out that the Saratoga Race Track was named the No. 10 sporting venue of the 20th century by Sports Illustrated magazine, “Saratoga is on that level.”

“Saratoga is actually really well off,” says Veitch. “From the Chamber of Commerce to the local businesses downtown to the local elected officials, everyone really works together to make it a positive meet. Part of the appeal of Saratoga is that you can go with family and friends and enjoy yourself for an entire day and then after the track closes as well.”

“Sen. McDonald has always been a champion for Saratoga racing and we always consult with him on his suggestions whenever we try to make structural changes to improve racing in the state of New York,” says Sen. Bonacic. “I think Saratoga really is a model for what racing should be. Saratoga offers a complete package. It’s not only racing, it’s recreation, family involvement, and you can go and enjoy the other amenities of Saratoga as a complement to the racing when you go to the track—the theater, the music, the restaurants, the beauty of the town in summertime. These are all very attractive sights for tourists. So, the formula works. At some of the other tracks, they go simply for gambling and I don’t believe that they have all the other amenities. Aqueduct is trying to develop a gaming resort where you have more broad gambling choices, but for a family that’s looking for something in addition to gaming, I don’t think they have what Saratoga has.”

“It all still seems the same to me as it did when I was a kid,” comments Kopp-Maye as she looks around. “I like that constancy. I don’t come for the gambling; I come for the atmosphere and for the memories. The entire culture in Saratoga is really based on the races and that history. It’s even reflected in the architecture. I can’t imagine what would happen if you took it away.”

In an effort to bolster the industry statewide and ensure continued success at Saratoga, Sen. McDonald has convened a panel of interested and informed members to determine best practices for the evolving industry. The 43rd District Racing Advisory Panel consists of former and current members of the Chamber of Commerce, horse breeders, representatives from the Saratoga Casino and Raceway, a member of the NYRA Board of Directors, concerned citizens, one racing journalist (Mike Veitch Sr.) and the mayor of Saratoga Springs. Bonancic says that he has attended a few of those meetings and intends to maintain a presence in Saratoga, “We’ve got to adjust our marketing techniques to the changing times and that’s what we’re trying to do in analyzing the racing structure. Some ideas are more attractive than others.”

“We’ve been gathering information and ideas, but we’ve certainly not put forth any recommendations yet,” says Shimkus, who is a member of the panel. “I think the goal of the panel is, by early next year, to provide to Sen. McDonald a list of recommendations on specific things the state can do to help improve thoroughbred racing throughout New York, not just here in Saratoga. Because the industry has a statewide impact—due to tracks in other communities and the breeding that takes place throughout New York—it’s important that we figure out how we can advise the new governor and his staff, the senate and the assembly on things they can do to make it more successful. New York could be positioned, if we do this right, as a genuine leader in tourism job creation as a result of the thoroughbred industry. “If,” he stresses, “we do this correctly.”

For now, hardcore horse racing fans need not worry about Saratoga. “NYRA really deserves a lot of credit,” says Shimkus. “Had they not been entrepreneurial in getting into New York City and providing those services, we would be in a really difficult position up here this summer. They made it happen and they did it quickly.”

{ 1 comment }

grinter August 11, 2011 at 12:08 pm

A little typo in the article..Should be Aqueduct, not Aquaduct :)