New York Comptroller Thomas DiNapoli subpoenaed financial records Monday from the New York Racing Association, saying NYRA is trying to shortchange the taxpayers by claiming it may need another state bailout to save the Triple Crown's Belmont Stakes.
The association, which has held the franchise to run the state's three thoroughbred tracks for decades, got $105 million from the state and forgiveness of millions more in state debt in 2008. It is refusing to open its books to DiNapoli's auditors, saying a recent court ruling limits the comptroller's authority to examine its finances.
NYRA President Charles Hayward said last week that unless New York lawmakers agree to get video lottery terminals up and running soon at the Aqueduct track in Queens, NYRA may need another $30 million from the state to save the racing season at Long Island's Belmont Park, which includes the storied final leg of the Triple Crown.
"Less than six months ago, NYRA said it was financially stable," DiNapoli said Monday. "Now NYRA says without VLT money it may not be able to stay in operation until the Belmont Stakes. In the meantime, it's been trying to hide its books from my auditors. It's the same old NYRA in new sheep's clothing, trying to shortchange taxpayers again."
The association issued a statement later Monday saying it operates without taxpayer subsidy, and the state money last year was in exchange for more than $1 billion in real estate that includes the three tracks. The need for more funds without the VLTs was "no surprise," and NYRA is already subject to close scrutiny by the State Racing and Wagering Board and tax officials, both with auditing authority, it said.
Jennifer Freeman, a spokeswoman for DiNapoli, said the comptroller's office issued subpoenas calling for the association to make records available within two weeks and its officials available within four weeks. "We're expecting compliance," she said, though the association could challenge the subpoenas in court.
DiNapoli said NYRA operates for the benefit of New York taxpayers, who have a right to know what it's doing. Following legislation enacted in 2008, NYRA became a not-for-profit corporation to get a new 25-year franchise to operate the state's three thoroughbred racetracks, including Saratoga Race Course.
Prior audits found NYRA failed to pay the state nearly $54 million in franchise fees from 2000 to 2005, according to the comptroller's office.
The Court of Appeals ruled in June that charter schools are not political subdivisions subject to comptroller audits. NYRA said that as a nonprofit group, it is likewise exempt and, if they can't reach agreement with the comptroller about the top court's ruling, they should submit the issue immediately to court to resolve it.
DiNapoli said NYRA's franchise agreement, state statutes and language in the state constitution give him the auditing authority.
Last week, Hayward said NYRA was down to about $11 million in cash, $4 million short of projections, because of a debt owed by the New York City Off-Track Betting Corp., which also has been perennially troubled.
Two Assembly committees have scheduled a hearing Jan. 8 on the future of the city OTB.
"There's a Gordian Knot here that's got to be cut through," said Assemblyman Richard Brodsky, noting the various problems are interrelated. "The fiscal health of racing in New York is precarious."