By MATT PEPPE*
(June 8) – American Pharoah on Saturday (June 6) cruised to a five-length victory in the Belmont Stakes and became the first thoroughbred to claim horse racing’s Triple Crown in 37 years. The publicity and excitement of having a horse become the 12th Triple Crown winner should be a much welcomed shot in the arm to a sport that long ago lost its iconic place in American sports – along with boxing and baseball. In New York State, where American Pharoah’s victory took place, the horse racing industry has been the victim of Governor Andrew Cuomo’s strong-armed tactics to keep the cash cow alive at the expense of the few diehard fans who still remain loyal to the Sport of Kings.
The New York Racing Association, a not-for-profit organization that holds the franchise rights to operate the three tracks in the state (Aqueduct, Belmont and Saratoga), was created in 1955. NYRA is regulated by the New York State Gaming Commission. In the past NYRA had been plagued by scandals and corruption, leading to its declaration of Chapter 11 bankruptcy in 2006. In a bailout organized under disgraced former Governor Eliot Spitzer, NYRA was forced to surrender its ownership of the three race tracks in return for a new 30-year lease. The organization was disbanded in all but name, as the management and board were overhauled in a clean break from the former NYRA.
The new entity was respected by the industry and the fans. They managed to stabilize NYRA’s fiscal situation, bringing them back into the black without achieving this on the backs of long-time racing fans. In fact, they even introduced price decreases at Saratoga Race Course that were as low as any sports entertainment venue in the country. By all accounts, the new management had done as well as anyone could have hoped for.
But in 2012 Cuomo essentially organized a coup in which the NYRA board agreed – likely the same way a bank cashier being held up agrees to turn over the money in her drawer – to be replaced by appointees from the Governor himself, as well as both branches of the state Legislature. This was billed as an interim arrangement, with the bill mandating a three-year term for the newly reorganized board, which would then “be returned to private control, remaining in the form of a not-for-profit corporation.”
Andrew Beyer, a columnist for the Washington Post and a legendary horse racing handicapper, wrote that an unintended error that short-changed bettors $8.5 million dollar because of the expiration of an obscure state law that reduced takeout, and went unnoticed not just by NYRA but by state oversight organizations, served as a convenient pretext.
“This was Cuomo’s opportunity to execute a coup. The governor is a staunch supporter of the casino industry, which can generate significant revenue for the state, not to mention large political contributions. Because of the law giving racetracks a subsidy from slot-machine funds, horse racing siphons away money that politicians want for their own aims,” Beyer wrote.
Another respected racing journalist, Ray Paulick, also labeled Cuomo’s takeover maneuver a coup d’ etat.
“Like any good politician, Cuomo talks a good game, and says this reorganization is being done for the benefit of the horseplayers who entrust their faith in racing, along with the taxpayers, and the horses themselves,” Paulick wrote. “More than a few people believe Cuomo is creating something akin to the New York off-track betting system that has been a model for how not to do things: a structure that allows political hacks to give jobs to friends and family and eventually create a bloated bureaucracy that is doomed to failure.”
While it would certainly be positive to subject any organization to democratizing reforms, this is far from the case. Cuomo certainly never campaigned on the NYRA issue. While he and the legislators who appointed the new board members are theoretically accountable to the public, in reality it is almost exclusively covered in the racing press, whose target audience is hardly carries any voting or fundraising clout.
If there were any illusions that bringing NYRA under the purview of elected officials would increase transparency, they quickly went out the window. Tom Noonan, a blogger on New York horse racing, questioned from the beginning why the new CEO was awarded a contract for nearly $100,000 more than the previous CEO that was summarily dismissed after Cuomo’s coup. He filed numerous requests under he Freedom of Information Law (FOIA), including CEO Christopher Kay’s contract and performance standards that would entitle him to a $250,000 bonus.
“There could not be a better example of NYRA’s blatant flouting of the public records law than their response to my request for documents from other entities concerning NYRA’s obligations to act under both the public records law and the Open Meetings Law,” Noonan wrote. “They denied any such documents existed, even though there is an opinion from the Committee on Open Government – the state agency with responsibility for overseeing both of these laws – stating that NYRA was indeed subject to them.”
The real reason for Cuomo’s sudden interest in “reforming” the New York racing industry lies in his plans to expand corporate welfare in New York City with a $4 billion convention center on the current site of Aqueduct Race Track. This ill-conceived plan was laid out in his 2012 State of the State address, in which he announced his “new economic development blueprint that invests billions of dollars in key public-private sector partnerships … a reinvention of how government operates.
With the stage set, several months later Cuomo executed his takeover of NYRA and installed his lackeys with majority voting power to sanction his ill-advised plan to collude with developers and casino moguls to create a “mega-development.” The Associated Press noted that “public opinion polls, however, didn’t share Mr. Cuomo’s enthusiasm for a 3.8 million-square-foot facility in Queens that could turn into a casino complex.”
Essentially Cuomo’s entire economic plan as governor has consisted of tax cuts for corporate business to entice them to create jobs. The optimistic talk has so far yielded laughably bad results, with a grand total of 76 jobs created in the first year of his Start-Up New York program.
There are alternatives Cuomo could be pursuing instead of wooing big business with state money. Lawrence Wittner, Professor of History at the State University of New York at Albany, writes in CounterPunch that “instead of shoveling billions of dollars into the coffers of private, profit-making companies, New York could invest its public resources in worthwhile ventures that generate large numbers of jobs – for example, in public education.”
Thankfully, Cuomo’s original plan for a mega-convention center fell apart. Devoid of its raison d’ etre, the coup-installed NYRA board has stumbled through its three year term alienating fans and instituting corporate discipline on a non-profit institution. “NYRA has become profitable by a combination of cutting workforce, raising prices as well as having a fantastic Belmont Stakes Day,” the Daily Racing Form reported last year.
Having demonstrated itself apathetic to transparency and accountability requirements of state law, Cuomo’s new NYRA board has also failed to recommend a plan to return the organization to private control by October 1, 2015. The state has allocated state control for another year. So the zombie board rolls on, serving neither the interests of the public nor the sport itself.
If there was a legitimate public interest in destroying the New York racing industry to serve some more important public good – possibly public housing or a public university – Cuomo’s coup to takeover a successful non-profit organization operating under the oversight of the State might be justifiable. But wiping out a Race Track that has served for decades as an entertainment center and a lifeblood for a moribund industry that supports not just owners, trainers and jockeys but veterinarians, stable hands, hot walkers and exercise riders.
Handing over the land to private casino moguls who will give bigger political donations hardly qualifies as such a public interest. As with groups groups seeking more charter schools have found out, Cuomo will go to bat for private interests delivering hard campaign cash. Cuomo’s aim was never to invest in public infrastructure or expand public services. He saw an opportunity with little political risk to facilitate the 1% further lining their pockets at the expense of those with less political clout.
*Source: Matt Peppe writes and publishes Just the Facts Blog