New York Lawmakers Question Cuomo's NYRA Plans

New York legislators say they plan to push back against some of the provisions proposed by Gov. Andrew Cuomo to return the New York Racing Association to private hands after nearly five years of a Cuomo-controlled board of directors running the racing corporation.

The governor backed down from a couple of key plans he proposed last year, including reducing the amount of money shared with the racing industry from proceeds from the Genting-run casino at Aqueduct Racetrack. 

Having had a few days to review elements of Cuomo's NYRA plan, lawmakers said they were pleased Cuomo retreated on a couple of the ideas he proposed last year that caused a stalemate in talks with the Legislature.

Sen. John Bonacic, chairman of the Senate racing and wagering committee, is concerned that Cuomo is still maintaining a possible back door to exert influence over NYRA's future even with a proposed change in the board's composition that would give Cuomo a minority of direct picks of its 15-member panel. At issue is the Franchise Oversight Board, a vehicle created by former Gov. Eliot Spitzer as a way to monitor, and in the case of capital expenditures, approve or reject some NYRA funding plans.

Under Cuomo's new plan, the panel would be given new powers to impound money from NYRA and force it to take "corrective action" if, in the opinion of the oversight board, there are "significant" risks to NYRA's financial health. Bonacic said the language of the oversight board's proposed new powers provide no specific benchmarks for determining if NYRA is under-performing.

"Here is where the language gets vague: if they feel that NYRA is incompetent or there's fraud or inefficiencies they could step in and grab the VLT monies that would go to NYRA and put them into escrow,'' Bonacic said.

As troubling, he said, is that Cuomo now picks a majority of people serving on the five-member oversight board.

"If he has a political purpose or he has an ultimate agenda that doesn't favor NYRA, then he can use his three agents on the oversight board to start chopping NYRA's legs off,'' Bonacic said.

Since the oversight board was created in 2008 as part of a deal to extend NYRA's franchise to operate Aqueduct, Belmont Park and Saratoga Race Course, New York governors have had three of the five seats on the panel. Cuomo is not proposing to expand the number of appointments he gets to the oversight board.

Bonacic, however, believes that any expanded powers for that board, such as the ability to impound NYRA revenues from VLT operations, should have to be approved by all five members of that panel and not, as currently is the law, a simple majority of its members.

One main push by industry stakeholders is that NYRA remain as a not-for-profit entity and not be opened up for purchase by a for-profit company. The legislation appears silent on that matter, though the NYRA debate will rage on for at least the next three months.

Cuomo proposes dealing with the NYRA issue as part of the state budget talks, which are scheduled to conclude by the end of March. The state's NYRA takeover period, begun in 2012 and with two additional one-year extensions, is due to expire near the end of this year.

In his state budget plan this week, Cuomo proposed a privatized NYRA board with 15 members. Of those, Cuomo would have six appointments, but two of those would be based on the recommendations of the leaders of the Senate and Assembly. Eight members would be selected by the executive committee of the current board; many of those committee members are current Cuomo board picks. The NYRA president would also get a spot on the board. The governor would also still get to appoint a board chairman for a term of three years. Groups representing breeders and horsemen would get non-voting posts on the new board.

"I'm in favor of taking it out of the governor's hands,'' said Assemblyman Gary Pretlow, chairman of the Assembly racing and wagering committee. But the Westchester County Democrat said the Assembly was still reviewing Cuomo's new proposal.

Pretlow, however, did voice an initial concern. "I do know he doesn't have representatives of the horsemen or breeders on the board. I think they should have a vote because they have a stake in it,'' he said.

Indeed, said Rick Violette, president of the New York Thoroughbred Horsemen's Association, his organization and the New York Breeders Inc. should have extra powers in board votes.

"The horsemen not having a voting right still doesn't sit well," Violette said. "If you really looked at things just because of constituents we represent, the horsemen and breeders should have a weighted vote."

Jeffrey Cannizzo, executive director of the New York Thoroughbred Breeders Inc., said his group applauds Cuomo for moving toward putting NYRA back into private control.

"We believe that a properly executive reorganization of NYRA can align the goals and aims of the racetrack operator with those of the industry stakeholders: the breeders, owners, trainers of New York state who have the most skin in the game, risking capital, time, and resources,'' Cannizzo said.

But Cannizzo said the breeders and horsemen should have seats on the board with full voting powers, as was the case prior to the state takeover in 2012. The breeders group said there is also "much need" for clarification and more specific language in Cuomo's budget plan regarding the Franchise Oversight Board and VLT revenues.

"We can't have language which creates ambiguity and uncertainty,'' Cannizzo said.