New York Racing Association
Financial Condition and Selected Governance Activities
The New York Racing Association (NYRA) is a not-for-profit corporation franchised by New York State to conduct racing and pari-mutuel wagering at the State’s three major thoroughbred racetracks: Aqueduct Racetrack, Belmont Park and Saratoga Race Course. In November 2006, NYRA filed for bankruptcy, and in September 2008, the State and NYRA entered into a bankruptcy settlement agreement in which NYRA conveyed all ownership rights in its racetracks to the State and the State provided NYRA with a financial assistance package that enabled it to emerge from bankruptcy. In addition, the State agreed to have video lottery terminals (VLTs) with State Lottery games installed at a new gaming facility at Aqueduct Racetrack, and to allow NYRA to receive a percentage of the revenue generated by the VLTs. However, because of ongoing delays in the creation of the gaming facility, NYRA has received none of the expected revenue. Under the bankruptcy settlement agreement, in the event of such delays, the State and NYRA were to negotiate to provide NYRA with the funds needed to support its racing operations. In early 2010, NYRA’s President warned that NYRA was in imminent danger of running out of cash. Accordingly, on May 24, 2010, the State approved a $25 million loan for NYRA.
We reviewed NYRA’s projections of its available cash, as of May 20, 2010, for the remainder of 2010, and found that the projections appeared to be reasonable in all material respects. We therefore concluded that, in all likelihood, NYRA would have run out of cash sometime in early June 2010, if it had not secured the loan from the State. We also identified a number of reasons for NYRA’s inability to remain solvent without State assistance, some of which were beyond NYRA’s control and some of which were within NYRA’s control. In addition, we identified actions that should be taken by NYRA to reduce the need for further State financial assistance in the future.
For a complete copy of Report 2009-S-89 click here.