Racing Industry's Importance Emphasized in NY Hearing

Racing industry executives in New York State, where Thoroughbred racing has been under fire from animal rights activists and some state legislators, said their industry is safe, has improved the welfare of current and retired racehorses, and that lawmakers should block to steer video lottery casino proceeds away from track-related interests to education and social needs of the state.

At a hearing with a broadly stated agenda concerning the state of the horse racing industry in New York, Assembly Racing Committee Chairman Gary Pretlow, a Westchester County Democrat, invited key stakeholders to Albany to listen to various concerns less than a month before the state Legislature commences its 2022 session.

The hearing comes after legislation was introduced in the Assembly proposing to re-direct $230 million in annual payments from racetrack-based video lottery terminal casino proceeds away from the horse industry—for such things as purses—to help pay for other programs, such as public education. The legislation by Assemblywoman Linda Rosenthal, a Manhattan Democrat, was introduced on Nov. 17, but it has not yet been picked up in the state Senate.

Joe Appelbaum, president of the New York Thoroughbred Horsemen's Association, told lawmakers of the thousands of jobs across the state in the various equine industries, serving as major employers for many new immigrants.

"The economic engine of this network purse account. It is through which money is distributed throughout the system, not to horse owners, but to grooms and veterinarians, farriers and electricians, farmhands, and truck drivers. There has been an implication that our purse supplement is some sort of welfare program. Nothing could be further from the truth. It is a jobs development program,'' Appelbaum said in written testimony he provided to the committee.

"There (have) been recent public comments regarding 'racing support payments' from a member of the Assembly and those who are philosophically opposed to our sport. However, it is not reality or remotely accurate to operate under the assumption that racing support payments are some sort of direct spend by the State. It is simply earmarking a percentage of gross gaming revenue from VLT operators and dedicating the revenue stream to our industry. These payments were negotiated in exchange for land, tax revenue, and space out of our facility. New York needs to live up to its commitments and honor the original terms of the transaction,'' Appelbaum said.

The horsemen's group represents about 5,000 owners and trainers, who in turn employ about 3,000 people, he said. "These are actual jobs, tax-paying, working-class jobs, not theoretical jobs that may or may not appear in the future,'' the NYTHA president told lawmakers.

Asked by a lawmaker of the impact on backstretch workers if VLT proceeds are eliminated, Appelbaum said during his oral presentation: "They would be out of work, number one."

For horsemen, the purse accounts—fed in a sizeable way by VLT payments—"is the big engine" that has helped the NYTHA to be able to afford to enact changes such as lower-cost health insurance offerings for employees of smaller-sized training operations.

Appelbaum and Jeffrey Cannizzo, senior director of government affairs at NYRA, both sought to characterize their industry to state lawmakers as proactive on equine drug and safety measures.

Cannizzo noted NYRA capital expenditures to improve such things as the track surface at the Saratoga Race Course and the Oklahoma training facility there, which began after training for 2021 was recently completed. The work includes new rider safety rails and in the case of the Oklahoma training facility a widening by up to 12 feet in some areas to accommodate more horses that have been using the track for seven months a year.

"The health and welfare of horses and jockeys competing at NYRA tracks is our highest priority and one that stands above all other considerations,'' Cannizzo said in his written testimony.

Cannizzo and Appelbaum noted their organizations' strong support for the federal Horseracing Integrity and Safety Act. 

"The industry supports a standardized and accredited testing program that will not only hold all of our racetracks to a higher standard, but if implemented correctly with education and shared resources, will make our smaller racetracks more efficient and aspirational in safety matters,'' Appelbaum said.

But groups that support the Rosenthal bill to end annual state payments to the racing industry used the hearing's timing to both press for its cause and to dismiss as overstated employment numbers claimed by the racing sector. 

The coalition includes groups representing education interests, human service providers, and animal rights organizations, including People for the Ethical Treatment of Animals. The bill calls for splitting up racing subsidies in different ways, including 40% for schools and 30% for agricultural grants, after-care programs for retired racehorses, and economic development programs in communities with tracks.

"Black, brown, and low-income students across New York State attend public schools that have been underfunded for too long. Ending subsidies that benefit millionaire and billionaire horse owners and redirecting the funds to education is part of righting this injustice and creating an equitable future for all New York's children," Jasmine Gripper, executive director of the Alliance for Quality Education, said in a written statement shortly before the hearing's start.

Not on Wednesday's Assembly hearing witness list: any of the groups that have been pressing to end the VLT subsidies to the horse racing industries.

Lawmakers heard from the head of the Saratoga Chamber of Commerce, horse breeders, a University of Kentucky professor and expert on racing surfaces, the head of the Finger Lakes Horsemen's Benevolent and Protective Association, and trainer James Bond and Tina Marie Bond, owners of a Saratoga Springs Thoroughbred operation.

The wide-ranging hearing touched on everything from state licensing issues and equine drug matters to the intricacies of horse breeding to how much hay is grown in New York to feed horses. In the face of growing opposition to racing from animal rights groups, equine safety steps, too, were a major topic for presenters at the hearing.

But the most common theme—that the horse industry brings jobs and economic development—came against the backdrop of lobbying moves to reduce or eliminate state annual payments from VLT casino proceeds to tracks, purses, and breeding operations.

Tom Grossman, principal of Blue Chip Farms, a Hudson Valley Standardbred horse breeding farm, talked of the growth of his operation, and a double to 30 people he employs, since the industry began sharing in VLT proceeds more than a decade ago.

If that money is taken away, "every one of the gains that I just shared with you would disappear in the blink of an eye. I fear that our 700 acres would be largely or completely destroyed,'' Grossman told lawmakers.

The Bonds and others sought to highlight the economic benefits that come with the annual summer meet at Saratoga Race Course, which racing executives say would be severely dented if VLT subsidies to the industry are taken away.

"I'm proud to be a horse owner,'' Bond said.

NYRA officials focused on how much money the not-for-profit corporation invests in its properties, which are all state-owned.

A major renovation of Belmont Park, including the construction of a tunnel to open the infield, could commence, depending on resolution of financing issues, sometime next year.

NYRA officials—without any specifics or timetable—said the "long-term idea" would be to consolidate year-round racing in the New York City area at Belmont, permitting the state to re-develop a lucrative piece of land in Queens now home to Aqueduct Racetrack. Such plans have long been talked about

"It's a fundamental aspect of our growth,'' Cannizzo said of a major rehabilitation of Belmont. "A new Belmont Park racing facility would mean a world-class sports and entertainment destination without equal in the country,'' he added.

David O'Rourke, NYRA's president and CEO who attended the hearing remote, talked of one day being able to attract large crowds to a smaller Belmont Park, and new racing fans who could be lured to the track to take in several races before major concerts are held during the summer on a re-opened infield area. The property is home to the New York Islanders arena.