An open letter to Christopher Kay

June 19, 2013

Dear Mr. Kay:

Congratulations on your appointment as President and CEO of NYRA.  I wish you the best as you face the daunting challenges ahead.

Like most horse racing fans, I have been disappointed with the direction in which NYRA has been heading in recent years.  While NYRA implicitly acknowledges the importance of the owners, trainers, jockeys and others who “put on the show,” those of us who finance the show feel we have been neglected and at times — such as when NYRA illegally overcharged us on certain bets, to name but one — abused.  While VLT revenues have been used to inflate purses to wholly unrealistic levels, especially for low level claiming races and races restricted to New York breds, I am not aware of any meaningful portion of that money being directed to fans and bettors in the form of decreased takeout or reducing the costs of admission, programs, food or other fan amenities.  I also am not aware of any meaningful expenditures to retain the existing (and declining) fan base, or to develop the new fans needed to sustain racing in the future.  One need only to look at your closest competitors, the casinos, to see why customers have fled racing in droves:  those establishments excel at customer service,  make their customers feel valued by not nickeling and diming them with admission and other charges, and by rebating meaningful amounts of money wagered to  even low rollers in the form of free meals and other comps.

You may think it unimportant to cultivate fans as long as you are receiving a portion of VLT revenues; I submit such a view would be short sighted.  First, casino gambling revenues are declining in most jurisdictions, due to saturation of the market.  If the constitutional amendment allowing “real” casino gambling in New York passes, VLT revenues will be, to say the least, negatively affected. In the shorter run, there already have been suggestions that the State will wake up and take the VLT monies used to subsidize racing to use for other purposes, especially if it perceives — correctly, in my view — that these monies are not being used to assure the long term self sufficiency of the sport.

If you decide, as I strongly suggest you should, to make one of the major goals of your tenure the retention of existing fans and the cultivation of new fans, you then have another major decision to make — whether your future fans will attend the races live, or watch and wager off site.  Other than on Belmont day and at Saratoga, I might suggest that the fans already have decided to stay away in droves.  Twice in the last year or so, I have been to Belmont on a Saturday, and I was joined by far fewer than 10,000 others.  Vast expanses of the facility were closed, and it resembled a ghost town.  If the future of horse racing is off-track, it might make sense to begin an ordered shrinking or decommissioning of the little-used facilities at Belmont and, certainly, Aqueduct.  Year round racing may serve the needs of horsemen, but does it serve the needs of NYRA?

Off track or on, the most significant thing you can do to retain existing, regular bettors is to work to reduce the takeout which, along with  breakage, has made it virtually impossible for regular players to afford to stay in the game.  Do not buy the plea of  the politicians that “no one will notice another one per cent.”  That thinking has brought racing, and, in the context of taxation of businesses and individuals, New York, to its knees.  And please don’t tell me that the NYRA One rebates to large players reduce the effective take out.  While that program is a start, most of us cannot afford to bet anywhere near enough to qualify for those rebates.  If you can’t reduce the take out, throw players a bone or two:  how about free admission upon presentation of a NYRA One card, or the elimination of breakage on payouts into the NYRA one account.  Bettors who wager a certain amount over a year would be delighted to receive tickets to a pair of club house seats at Belmont or Saratoga.  I know that race books in Las Vegas provide significant comps to horse bettors; you could creatively offer a small portion of what they do.

The quality of racing also needs to be addressed.  Racing in New York has been dominated by races for New York bred horses, who race in a parallel universe where the purses are the same for comparable races for open company, but the quality is many, many levels lower — so much lower, significantly, that the horses do not run true to form and the races, therefore, often are unplayable.  One potential source of funds for reducing the take out is the bloated purses for such races.  If you are able, you should restrict use of New York Bred funds to pay bonuses to New York breds that win in open company, as many other states do.

Attracting new fans requires outreach.  Racing can be attractive on many levels – as a sport, as a gambling opportunity, and as an intellectual exercise in handicapping.  Appropriate marketing materials can be tailored to appeal to people with each of those interests, and free admission days, with free programs and handicapping seminars, could take some of the mystery out of the game for new fans.

If racing is to have a future, the interests of fans (i.e., bettors) need to be served much better than they are now.  Unfortunately, fans do not have an effective organized voice, as do the horsemen and their industry; however, the lack of such voice does not diminish the importance of fans to the survival of racing.  Throw the fans a bone or two and you will do a lot to get racing heading in the right direction again and to fix the terrible public image of NYRA.

A bit of history

June 3, 2012

I was not aware of the controversy surrounding the 1968 Kentucky Derby, recounted in this fascinating NY Times obituary about the owner of the horse that was disqualified.

New, new NYRA

May 22, 2012

After he was able to cut off the VLT money, apparently Gov. Cuomo got the upper hand over NYRA, as this article suggests.  Let’s hope the new, new NYRA (we now have the new NYRA, which hasn’t turned out so great) is a real, substantial improvement, and that at least one of the board members is a representative of the fan base, rather than the other already over-represented interests.

What’s wrong with this picture?

May 20, 2012

Yesterday, a friend and I attended the horse races at Belmont Park, one of two major thoroughbred tracks in the New York City area (the other is Aqueduct, and they do not compete with each other – when one is open the other is not).  Although it was an absolutely beautiful Saturday, and Preakness day, which one would think would cause more folks than usual to think of horse racing, paid attendance (at a venue capable of holding over 100,000, with 33,000 reserved seats, according to Wikipedia), was just a shade over 8,000.  The place looked almost abandoned, with whole sections of the stands and betting windows closed off, and many of the food and beverage outlets also closed.  It evoked a trip I made to Ellis Island before it became a slick museum, when you could see it literally just as it was when the government closed up shop in the 1950s.  Of course, Belmont was still running, but it was a ghost of its former self, and much different than on my last visit, on a Belmont Stakes day several years ago.

I speculated out loud how the state of racing had come to this, and asked my friend (who is for practical purposes new to the game, having attended the races for the first time in ages a few weeks ago with me in Keeneland, which presented a wholly different picture).  One problem was the quality of the card.  Without going into detail, I’ll just tell you that the feature was a $100,000 stake for State-breds, three and up, at 7 furlongs on the dirt.  The race attracted a field of only six, and the favorite — who ran true to form and won — went off at 3-4.  The rest of the card, except for one very nice maiden special weight race on the turf, and a couple of allowance races, was the usual mix of state bred and/or claiming (including conditioned claiming, and the dregs-de-la-dregs, state bred maiden claiming) races.  My friend, who liked Belmont a lot, did note one difference between it and Keeneland — at Belmont, because the track is so large, few races start in front of the stands.  He enjoys watching the starts as well as the finishes, as I’m sure many race fans do.  He also mentioned that gambling tastes have probably changed, and people don’t want to put in the work it takes to handicap races when instead they can mindlessly scratch off instant lottery tickets or press the buttons on slot machines.

Nonetheless, given that a family of four could park free, or ride the railroad from the City directly to the track, pay a total of $12 for admission, have a nice picnic in the paddock area in the presence of majestic thoroughbreds and colorfully-clad jockeys, and bet as little or as much as they wanted to and could afford, it was difficult for us to understand how so few people could have decided that an afternoon at Belmont Park would not be a bad way to spend part of a beautiful spring weekend day.

Maybe it doesn’t matter if people show up at the track or not, as long as total handle is enough to sustain the game.  People may find it easier and more convenient to bet and watch from remote locations, with the track serving as an entertainment production facility that happens to let people in to watch, like a TV show filmed before a live audience rather than a Broadway show.  But that surely wasn’t the intent of those who, some 60 years ago, enlarged the facility to accommodate 100,000 fans.

Fortunately, the possibility of this year’s Belmont Stakes  producing the first triple crown winner in several decades will guarantee a full house on June 9.  However, if Belmont needs a healthy on track handle to survive, one big day cannot make up for too many days like yesterday, not to mention the even more sparsely attended weekdays and weekend days when the weather is inclement.  Aside from inflating the purses (indiscriminately, it seems to me), I don’t see the VLT money that was long anticipated as the savior of horse racing being put to any good use to develop or sustain fan interest.  As I’ve written before, I foresee a time in the not too distant future when the State will have had enough and will take the money back to use for other purposes.

NYRA showdown

May 16, 2012

Here’s an item from the Times-Union about the latest NYRA kerfuffle.  Seems the powers that be are upset about the promotion of someone who may be implicated in the takeout scandal.  Appointing her before the controversy is resolved was a bonehead move, but arguably so was the firing of her predecessor before all the facts were out.  Although the promotion may have set in motion the process for divesting NYRA of its franchise, the more interesting and immediate effect is the sequestration of $3,000,000 per month in VLT proceeds from the Aqueduct racino that had been earmarked for NYRA.  Maybe if purses go down to pre-VLT levels, the horse breakdown problem will take care of itself.  Incidentally, I recently read that a full 1% of VLT gross revenues go to the New York Breeders’ Fund.  I have predicted that the high VLT takeouts will eventually cause the public to grow tired of this form of gambling, and I therefore believe that this 1% would better be returned to VLT patrons than given to the already over-subsidized and under-performing breeders of NY bred horses.

The value of scarcity

April 18, 2012

I recently returned from a short trip to Kentucky, where friends and I were able to attend the races at Keeneland on Friday.  Keeneland, like Saratoga, is open only for a limited time each year (there, for two three-week meets, once in the spring and once in the fall).  Despite the lack of VLT revenues, the purses were high, the quality of the racing was good, the facility was beautiful and — most important — the stands were full.

Good quality racing at a meet of limited duration seems to work at Keeneland, Saratoga, Del Mar, Monmouth, Gulfstream and other venues.  I think it’s a lesson NYRA should take to heart.

Here’s another voice

April 18, 2012

In this TU blog post, members of the Franchise Board expressed doubt and displeasure at the way NYRA has been using (or not using) the VLT money. This could increase the pressure on the Legislature to redirect this money to other uses.  If it does, NYRA will have no one to blame but itself.

How about some real outreach to new, younger customers?  How about cutting the takeout, which has crept up over the years?  How about free admission, like the casinos offer?  In other words, how about doing something for the fans, rather than just increasing purses for the horsemen, which in large part means subsidizing further already over inflated purses for lousy horses?

Whether racing can survive in the face of overwhelming competition from other sporting events and gambling opportunities is an open question; whether it needs to do more than it has been doing to have even a chance is not.