ew York Governor Andrew Cuomo took over the New York Racing Association (NYRA) on May 22. Under the terms of the three-year agreement, the current 25-member NYRA board will be replaced by a 17-member board including seven members appointed by the governor, four members appointed by legislative leaders and a chairman selected by the governor. Breeders and horsemen would each have a nonvoting member on the new board. The new board would conduct a national search to replace former NYRA President Charles Hayward and General Counsel Patrick Kehoe, who were fired in the face of allegations that they knew the NYRA had shorted bettors by as much as $8.5 million. Aides of the governor who oversee racing also were furious that the NYRA had just elected new top executive officers who might have been involved in the skimming.
The move came after two weeks of contention between the NYRA and New York State Racing and Wagering Board Chairman John Sabini and Robert Megna, chairman of a NYRA oversight panel. Sabini and Megna called on NYRA Chairman Steven Duncker to “immediately [start] to act in the best interests of racing and the taxpayers of this state”, or “we will pursue a course of action to re-establish the racing franchise with a qualified, ethical, and responsible steward of horse racing”. The Cuomo administration immediately ordered Genting, which operates the Aqueduct Resort World Racino, to stop forwarding “racing support payments” to NYRA and instead put them into a state fund. Seven percent of the racino’s net winnings go to NYRA operating and capital expenses. In April, the racino generated $57.6 million, of which $4 million went to the NYRA. As of May 15, the NYRA had received about $22 million in payments from the racino.
Megna and Sabini in their letter cited a litany of violations and the “potential conflict of interests” involving NYRA board members, all horse owners and decried the naming of Ellen McClain, current NYRA executive vice president and chief operating officer, as the new president. They also contended that NYRA officials failed to produce documents related to the inspector general’s probe, failed to meet safety standards for jockeys and horses and did not provide adequate living conditions to backstretch workers at Saratoga. They also noted an “unprecedented series of breakdowns” of horses at Aqueduct. The administration also said it was exploring revoking the association’s racing franchise. The NYRA oversees racing at Aqueduct, Belmont and Opstate Saratoga.
On May 17, the NYRA reacted to Cuomo freezing its more than $3 million monthly in video lottery terminal money by saying the private not-for-profit association had made a sound business decision to appoint McClain and secretary Kenneth Handal to remain in compliance with NYRA bylaws and conform to Sabini’s wishes.
Sabini retorted that he had never told the NYRA to appoint a president and secretary, but did urge it to promptly set up interim leaders after it suspended Hayward and Kehoe. On May 22, Sabini moved to allay concerns from the New York Thoroughbred Breeders that denying NYRA its VLT money would devastate breeding and racing. He said breeders will continue to get their share of the gambling proceeds and race purses will not be impacted while NYRA’s operating capital funds are held by the state Division of the Lottery. Legislation would create the NYRA Reorganization Board to place NYRA under temporary public control with the aim of restructuring and reorganizing the troubled franchise before it reverts back to majority private control.
Sabini was confirmed by the state senate as the New York State Racing and Wagering Board chairman in August 2008. A Democrat, Sabini was elected to the state senate in 2002, representing parts of Jackson Heights, Corona, East Elmhurst, Elmhurst and Woodside. He previously represented much of this area as a Councilmember from 1992 to 2001.
—Linda J. Wilson