New York Racing Association

Audit of the Annual Franchise Fee for Calendar Years 2004 and 2005

The New York Racing Association, Inc. (NYRA) is a not-for-profit organization franchised by New York State to conduct racing and pari-mutuel wagering at the State’s three major thoroughbred racetracks: Aqueduct, Belmont Park and Saratoga. NYRA is required to pay the State an annual franchise fee, which is to be calculated in a manner prescribed by the State Racing Law. We audited NYRA’s calculation of this fee for 2004 and 2005, and determined that the fees were understated by a combined total of $10.9 million. The fees were understated because they were not calculated in the manner prescribed by law. We recommended that NYRA correct the errors that caused its franchise fees to be understated. We also noted that NYRA’s financial condition continued to deteriorate, as its accumulated deficit increased from $102.2 million in 2004 to $135.0 million in 2006, and in November 2006, NYRA formally entered bankruptcy proceedings.

For a complete copy of Report 2006-S-111 click here.