NYRA Declares Bankruptcy, NYC Casino at Risk

NYRA is also charged with running Belmont Park, also in New York and Saratoga Race Course in upstate New York.

The private, non-profit racing association established in 1955 filed a voluntary petition under Chapter 11 of United States Bankruptcy Code with the U.S. Bankruptcy Court for the Southern District of New York.

“We always viewed filing for Chapter 11 bankruptcy protection as a last option, and regrettably, NYRA’s Board of Trustees felt that we were required to take this action to protect New York’s Thoroughbred racing industry,” Charles Hayward, President and CEO of NYRA said in a statement. “The goal of the filing is to maintain the current schedule of racing dates, purse structure, stakes program and all other racing operations.

“Chapter 11 bankruptcy does not mean going out of business,” added Hayward. “In fact, it is a constructive process that allows NYRA the opportunity to achieve financial reorganization while continuing to conduct world-class Thoroughbred racing without interruption.”

A spokesman for New York Gov. George Pataki told the AP that New York State has been a ready source of financial bailouts over the years for NYRA. "We are concerned that by filing for bankruptcy that NYRA has endangered uninterrupted racing in New York State. It goes without saying that the state did everything possible to assist NYRA in overcoming their ongoing fiscal challenges, including providing them with nearly $300 million in grants, loans, subsidies and access to private sector capital. In the end, NYRA refused to help itself,'' said Scott Reif, a spokesman in the governor's budget division.

The state provided NYRA with an $8 million loan last Friday in order to continue operations for the time being.

NYRA has been threatening to declare this bankruptcy for months, saying the state has been unwilling to approve the VLT deal necessary to have MGM- Mirage bring in the slots and save the organization from financial disaster.


Onlinecasinocrawler.com reported last month that a new $180 million casino to built by MGM-MIRAGE at the Aqueduct racetrack in Queens as well as hundreds of millions in tax revenues would be at risk if the VLT program was not approved. The state wants the project to move forward as it stands to gain an estimated $300 million during the first full year of operation and up to $600 million in revenue once all slot machines are installed.

According to New York State Comptroller Alan Hevesi an approval for the installation of Video Lottery Terminals (VLTs) has been held up for months. VLTs are similar in appearance to slot machines, but rather than a win or loss being determined by a random number generator within the machine itself, a signal is sent to the lottery offices in Albany where the result is selected.

Late last year, as a result of these improvements as verified by a Federal monitor, the State Legislature worked out a $30 million dollar loan to allow NYRA to meet its obligations until a new revenue stream could be put into place—the introduction of 4,500 Video Lottery Terminals (VLTs) at Aqueduct Race Track. Despite state legislation authorizing gaming at selected racetracks and NYRA’s dire financial situation, the VLTs have never been approved at Aqueduct, and the State failed to fund $19 million of the loan that was appropriated for NYRA’s use. Aqueduct is the only NYRA track included in the VLT legislation.

Last week the Non-Profit Racing Association Oversight Board approved a new resolution that applied further restrictions and conditions on NYRA’s ability to receive the $19 million balance of the previously approved loan.

“It is unfortunate, and frankly, inexplicable, why the State Lottery Division could not work out the details necessary to get the VLT construction underway at Aqueduct;” said C. Steven Duncker, Chairman of the NYRA Board of Trustees, in a statement. “It is all the more mystifying given the fact that VLTs have been put in operation at eight non-NYRA tracks around the state,” he added. “VLTs at Aqueduct represent cash flow to our industry, the continuation of New York Racing—the premier brand in North America—and over $400 million per year for the State’s budget for education, $60 million for the Lottery, and $50 million for purses and breeders awards.”

NYRA provides 17,000 jobs and $1.4 billion in annual impact on the State’s economy, according to a 2005 Deloitte Consulting study. NYRA employs 1,170 workers and there are approximately 1,800 backstretch workers living in 900 NYRA dormitory rooms. More than 2,000 horses are currently stabled at Aqueduct Racetrack and Belmont Park.

Last year, NYRA’s Belmont Park and Saratoga Race Course were ranked first and second, respectively, among all North American racetracks in average daily purse distribution. The recently-concluded Belmont Park fall meeting finished up 6.7 percent in wagering, while Saratoga Race Course posted a 4.9 percent wagering increase.

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